ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-458554

COURT FILE NO.: CV-12-458556

DATE: 20130620

BETWEEN:

373041 Ontario Limited

Plaintiff

– and –

King Reed & Associates Inc., King Reed & Associates LP, King Reed & Associates, Granite Global Solutions Inc., Shaw Satellite G.P., c.o.b. as Shaw Direct, and Bell ExpressVu Limited Partnership

Defendants

AND BETWEEN:

Kurt Pieckenhagen, Julia Pieckenhagen,

Julita-Luise Pieckenhagen, Nicole

Pieckenhagen, and Vera Pieckenhagen

Plaintiffs

– and –

King Reed & Associates Inc., King Reed & Associates LP, King Reed & Associates, Granite Global Solutions Inc., Shaw Satellite G.P., c.o.b. as Shaw Direct, and Bell ExpressVu Limited Partnership

Defendants

Melvyn Solmon, for the Plaintiff

Christopher Bredt and Denies Bambrough, for the Defendants, Shaw Satellite G.P., c.o.b. as Shaw Direct, and Bell ExpressVu Limited Partnership

Elizabeth Bowker, for the Defendants, King Reed & Associates Inc., King Reed & Associates LP, King Reed & Associates, Granite Global Solutions Inc.

Melvyn Solmon, for the Plaintiffs

Christopher Bredt and Denies Bambrough, for the Defendants, Shaw Satellite G.P., c.o.b. as Shaw Direct, and Bell ExpressVu Limited Partnership

Elizabeth Bowker, for the Defendants, King Reed & Associates Inc., King Reed & Associates LP, King Reed & Associates, Granite Global Solutions Inc.

HEARD: May 16, 2013

Morgan J.

[1] The within actions both entail a defamation claim that, properly understood, is a small battle within a larger war being waged between the parties.

[2] The two summary judgment motions argued before me raise identical issues and will be treated as one for the purposes of these reasons. The defamation alleged in both actions is the same, and while the Plaintiffs are different the Defendants against whom these allegations are made are the same. For convenience of expression in this endorsement, the Plaintiffs will all be referred to collectively.

[3] Try as they might, the Plaintiffs have come up with no evidence to support their claims. For the reasons that follow, summary judgment should be granted and the actions dismissed as against the two moving parties.

I. The overall dispute

[4] The Defendants, Shaw Satellite G.P., c.o.b. as Shaw Direct, and Bell ExpressVu Limited Partnership (respectively “Shaw” and “ExpressVu”), move to dismiss the actions on the grounds that, as against them, they amount to nothing more than a collateral effort to obtain further discovery related to the larger dispute between the parties that forms the basis of an altogether different action. I agree with them, and for the reasons that follow would dismiss the actions as against Shaw and ExpressVu.

[5] The Defendants, King Reed & Associates Inc., King Reed & Associates LP, King Reed & Associates, and Granite Global Solutions Inc. (collectively “King Reed”), have brought no motion and filed no materials, although their representative provided an affidavit in support of the motion by Shaw and ExpressVu. King Reed’s counsel appeared at the hearing in order to confirm that it is her client’s support for the motion, but otherwise she did not participate in the substantive argument. The actions will therefore remain alive as against King Reed.

[6] Shaw and ExpressVu are unrelated to each other, but are both well-known companies in Canada. They provide satellite-based subscription television programming and hundreds of TV channels to several million homes and businesses. They are both licensed by the CRTC under the Broadcasting Act, SC 1991, c 11, and are “lawful distributors” of their programming within the meaning of section 2 of the Radiocommunication Act, RSC 1985, c R-2.

[7] The corporate Plaintiff in Court File No. CV-12-458554 is the registered owner of three residential apartment buildings located at 50, 100, and 150 Graydon Hall Drive, Toronto (the “Graydon Hall Apartments”). The individual Plaintiffs in Court File No. CV-12-458556 are an officer and director of the corporate Plaintiff, together with his family members.

[8] In September 2009, ExpressVu received information which suggested that its programming was being decoded and re-transmitted to tenants of the Graydon Hall Apartments without ExpressVu’s knowledge or authorization. ExpressVu suspected that the owners of the Graydon Hall Apartments were using technology that allowed for installation of a master antenna or satellite dish on site and then the conversion of the satellite signals into an integrated cable signal which is distributed to individual units within the three buildings.

[9] As a result of its suspicions about the impermissible distribution of its signals, Mr. Wayne Gow, the senior investigator employed by ExpressVu, commenced an investigation of the Plaintiffs and the Graydon Hall Apartments. Acting on behalf of ExpressVu, Mr. Gow, in turn, retained an outside private investigations firm, King-Reed, to provide certain specific investigation services to ExpressVu.

[10] King-Reed is a licensed investigations firm. Its employees rented furnished units in the three Graydon hall Apartments in order to conduct tests designed to determine the nature of the television programming that was being distributed to tenants of the buildings. As a result, ExpressVu learned that 42 channels of ExpressVu programming were being decoded and re-transmitted to tenants of the Graydon Hall Apartments without authorization. It also learned that there were numerous other channels being distributed to the tenants that were not ExpressVu programming, some of which appeared to be Shaw programming.

[11] In April 2010, Mr. Gow contacted Michael Ervin, a senior person at Shaw, and filled him in on the investigation that ExpressVu was conducting at the Graydon Hall Apartments. As a result of the information provided by ExpressVu about the results of its investigation, Shaw commenced its own investigation to determine whether Shaw programming was being decoded and re-transmitted to tenants of the three buildings.

[12] Shaw did not retain King-Reed to conduct its investigation. Rather, Shaw’s investigation was conducted in-house by its own Installation and Service Superviser, Keven Webb, who attended himself at one of the Graydon Hall Apartment suites rented by ExpressVu. In this way, Mr. Webb collected evidence of the programming being transmitted within the buildings, and learned that 67 channels of Shaw programming were being re-transmitted to tenants without Shaw’s authorization.

[13] On January 24, 2011, ExpressVu and Shaw both commenced actions against the Plaintiffs herein and several other parties, claiming damages for breach of the Radiocommunication Act, fraud, fraudulent misrepresentation, conspiracy, conversion, unlawful interference with economic relations, and unjust enrichment arising out of the satellite TV re-transmission operation at the Graydon Hall Apartments (the “Graydon Hall actions”). On January 28, 2011, Cumming J. granted interim injunctions and Anton Piller orders in the Graydon Hall actions.

[14] A number of King-Reed investigators swore affidavits in support of the Anton Piller motions. Those affidavits described the nature of King-Reed’s investigations, including the renting of the furnished suites, some surveillance activities, and various corporate and real estate searches that King-Reed conduced at the request of ExpressVu and its counsel.

[15] On February 1 and 2, 2011, the Anton Piller orders obtained by ExpressVu and Shaw were executed. With this, King-Reed’s involvement with the matter ended. The evidence is that King –Reed had no further dealings with anyone at ExpressVu (or, for that matter, Shaw, with whom they had never dealt in the first place) following execution of the Anton Piller orders.

[16] The Graydon Hall actions have been hard fought, lengthy, and expensive. In the one commenced by Shaw, the Plaintiffs herein brought an unsuccessful motion to stay the proceedings and unsuccessfully appealed it all the way to a motion for leave to the Supreme Court of Canada. In the one brought by ExpressVu, the Plaintiffs herein brought unsuccessful motions to set aside the Anton Piller order and for summary judgment and unsuccessfully sought to appeal the dismissal of their summary judgment motion. A large amount of costs have been awarded against the Plaintiffs as a result of all of those proceedings.

II. The defamation actions

[17] The within actions were commenced by the Plaintiffs in July 2012, when the parties were in the thick of the interlocutory proceedings in the Graydon Hall actions. The central allegation contained in the claims is that an article that appeared in a King-Reed corporate newsletter entitled “WOW Unforgettable Service” that recounted the investigation and the Anton Piller motion, was defamatory of the Plaintiffs. The article was very close in content to an article that appeared in the Toronto Star covering the same dispute and Anton Piller proceedings.

[18] The newsletter in which the article appeared was published for and intended to be circulated to King-Reed employees only. It was printed and circulated in April 2011. Sometime thereafter, it was posted on a website by a subsidiary of one of the King-Reed limited partners. This internet posting was brought to the attention of King-Reed management relatively quickly, who had it removed from the website. In all, the impugned article was posted on the internet for 16 days.

[19] No claim has been brought against the Toronto Star, on whose article the WOW Unforgettable Service article was based, or the freelance author of the WOW article itself. While it is, of course, the Plaintiffs’ right to pick and choose who they want to sue, it is more than curious that only the parties who have played central roles in the Graydon Hall actions have been named as Defendants in the within actions. It is certainly interesting to note that as between the Toronto Star, with its massive circulation, and the King-Reed employee newsletter, with its very limited readership even with a short-term posting on the internet, only the King-Reed newsletter has been made the subject of a defamation action.

III. The lack of evidence

[20] There is no evidence in the record indicating that either ExpressVu or Shaw had anything to do with the writing or the publication of King-Reed’s employee newsletter or the allegedly defamatory article. Frankly, it would be surprising if they did. All evidence indicates that King-Reed was retained by ExpressVu as an arm’s length firm to accomplish a discreet task, and that King-Reed was never retained by Shaw at all.

[21] There is not even a hint that either of those companies exercised any direction or control over King-Reed, except in ExpressVu’s case to the extent that any consulting firm’s client might give direction to them in relation to the task for which it has been retained. Neither ExpressVu nor Shaw have nothing to do with King-Reed’s internal employee relations.

[22] The Plaintiffs contend that ExpressVu and Shaw conspired with King-Reed to defame them in the newsletter by supplying information to the freelance writer. They have no evidence to that effect, but they argue that some of the information in the article could have come from nowhere else (e.g. the amounts claimed in the Graydon Hall actions and the amount of time those actions were estimated to take before going to trial).

[23] In answer to these allegations, ExpressVu and Shaw point out that the Toronto Star article specifically indicates that representatives of those companies would not speak to the reporter as the dispute was still before the courts. ExpressVu and Shaw submit that it strains all credulity to argue that they conspired to defame the Plaintiffs by supplying information to the King-Reed employee newsletter but refused to supply the same information to the Toronto Star.

[24] Furthermore, ExpressVu and Shaw point out that the information that the Plaintiffs contend could only have come from them, in fact, was contained in the materials filed in the Anton Piller motion. A routine court search by the Toronto Star reporter would have supplied all of the information that appeared in the article; and that article, in turn, contained all of the information that appeared in the WOW article.

IV. The refusals at cross-examinations

[25] The Plaintiffs’ most serious point is that they were unable to fully explore the issues at stake in this summary judgment motion due to a number of refusals given at the cross-examinations of the affiants put forward by ExpressVu and Shaw. They concede that every party in a summary judgment motion must put its best foot forward, but submit that often a responding party will need evidence in the possession of the moving party in order to make its case. Citing Indcondo Building Corp. v Steeles-Jane Properties Inc., [2001] OJ No 3316, at para 7 (SCJ), they submit that an adverse inference must be drawn from the refusal to answer questions whose answers might support the Plaintiffs’ allegations.

[26] I agree with the Plaintiffs in the abstract, as have a number of my colleagues on this court. Cumming J. made a similar point in the course of a motion for better production in Cole v Hamilton, 1999 14820, at para 3, where he stated that, “a party will often require production of documents by the opposition to prove the party’s case.” Likewise, Wilcox J. stated in McLelland v Farquhar Plymouth Chrysler Ltd., 2013 ONSC 1216, at para 28, that, “disclosure may be necessary for the Plaintiff to properly deal with a motion for summary judgment”.

[27] As with so many other matters, however, context is everything.

[28] Plaintiffs’ counsel details in their factum the several refusals given on cross-examination. In the first place, the Plaintiffs argue that the Defendants have refused to explain the “gag order” referenced in the internal King-Reed email dated March 10, 2011 from its lead investigator, Jason Dumbreck, which initiated the writing of the WOW article. Dumbreck’s email, which is appended to his affidavit in the record on this motion, linked the freelance writer hired to write article the recently published Toronto Star article on the same topic. In it, Mr. Dumbreck stated:

Here is a link to a recent investigation we did that resulted in execution of an APO at the Graydon Hall properties. This Article would be suitable for WOW or the internal publication. I ran the investigation and Chad Winslade gets the photo credit. Here is the link – http://www.thestar.com/news/article/951531-apartment-building-owners-sued-over-priated-tv-signals?bn+1. There was a gag order on this originally however, it has since been lifted.

[29] In cross-examination, counsel for the Plaintiffs asked Mr. Dumbreck who made the “gag order”, who lifted it, and how he knew it was lifted. He specifically asked if it was Mr. Gow of ExpressVu that had lifted the “gag order”. Answers to all of these questions were refused.

[30] Counsel for ExpressVu and Shaw make a number of points in reply. In the first place, they point out that Mr. Dumbreck is a King-Reed employee, and it was King-Reed, through its own counsel, that refused to answer the questions. King-Reed, of course, is a Defendant in this action and is separately represented. Moreover, there has been no summary judgment motion brought by King-Reed, and so the action will continue against it regardless of the outcome of the present motion. It is obvious that while King-Reed supports the position of ExpressVu and Shaw, its counsel was anxious not to allow counsel for the Plaintiffs to turn the cross-examination of Mr. Dumbreck into a pre-discovery of King-Reed.

[31] Counsel for ExpressVu and Shaw submitted at the hearing of the motion that it was, from their point of view, unfortunate that King-Reed refused these answers. They argue, however, that no adverse inference can be drawn against their clients as the role of advising King-Reed what to answer and what not to answer did not fall to them.

[32] Perhaps most importantly, counsel for ExpressVu and Shaw have, in fact, provided the answer to the questions that Plaintiffs’ counsel posed regarding the Dumbreck email. The “gag order”, they explain, was the standard confidentiality provision included as a temporary measure in the Anton Piller order.

[33] In the context of Mr. Dumbreck’s email to the article’s writer, “gag order” was a flamboyant phrase used to describe an entirely innocuous fact. It was not a smoking gun, it was not something imposed or lifted by ExpressVu or Shaw, and it is irrelevant to the claim against them. Mr. Dumbreck’s reference to it in his email did nothing more than to indicate that the confidentiality provision, which was contained in a court order to which the Plaintiffs themselves were parties and of which they were obviously aware, had expired and it was now permissible to publish.

[34] Plaintiffs’ counsel further complains that the WOW article was circulated by email and that, “[t]he Moving Parties refuse to produce the email wherein the Pirates Article was circulated.” They further complain that, “[t]he Moving Parties have refused to provide the Responding Parties with the IP addresses of the computers that accessed the Pirates Article.” In making these submissions, the Plaintiffs conflate ExpressVu and Shaw (the Moving Parties) with King-Reed (who is not a Moving Party).

[35] It is self-evident that it was King-Reed, and not ExpressVu and Shaw, that refused to divulge the names of the King-Reed employees to which the employee newsletter was sent. It is equally self-evident that only King-Reed, the company that posted the article on the internet, would have access to the IP addresses of those that accessed it.

[36] Both of these lines of inquiry might be legitimately pursued by the Plaintiffs at discovery, as they go to the issue of damages and the breadth of circulation of the alleged defamatory words. However, it is hard to fathom how the post-publication circulation is relevant to parties such as ExpressVu and Shaw that have no obvious connection to its publication.

[37] Finally, Plaintiffs’ counsel submits that, “[t]he Moving Parties refused to advise what information Mr. Dumbreck provided to Steven Lindt the person who wrote the initial draft of the Pirates Article.” As is obvious, any such refusal would be a refusal by King-Reed, not by ExpressVu and Shaw. Furthermore, Mr. Dumbreck already stated that he provided the author with a copy of the Toronto Star article, and a perusal of the two articles makes it clear that the author of the WOW article had no significant information that was not already published in the Toronto Star.

[38] While I do not disagree that full disclosure must be made by a party moving for summary judgment in order to allow the responding party to present its best case, I can find nothing in the record to indicate that ExpressVu and Shaw have withheld anything of relevance. The relationship between ExpressVu and King-Reed was not reduced to a written agreement, but there is nothing whatsoever to suggest that it was anything but the standard retainer of an outside consulting service for a discrete task. The relationship between Shaw and King-Reed was, according to all of the evidence in the record, non-existent.

V. The hollow claims

[39] The evidence from Mr. Gow is that ExpressVu did not know of the WOW article until it saw the Statement of Claim. Plaintiffs’ counsel counters by stating that in cross-examination Mr. Dumbreck stated that he notified Mr. Gow of the Notice of Libel, which presumably would have been before the Statement of Claim was issued. Plaintiffs’ counsel then states that, “[t]he Moving Parties as the court to accept the general statement that Bell/Shaw did not participate in the publication of the Pirates Article.”

[40] Counsel for ExpressVu and Shaw argue in reply that the statement about their clients not know about the article until after its publication is not a general one; it is quite specific and uncontradicted. It is also highly credible. There is no logical reason for those companies to have been involved in any way with the writing of an employee newsletter put out by a consultant it retained on a one-time basis.

[41] Moreover, the fact that Mr. Gow, a non-lawyer, may have mixed up one legal document (the Notice of Libel) for another (the Statement of Claim), is not exactly a ‘gotcha’ moment. The point is that he and the company he works for were surprised when they received legal notice that they were being sued, since they had not even known about the article that spawned the suit. The record is uncontroverted that they did not participate in the article’s creation.

[42] Moreover, there is nothing in the record to suggest that the WOW article was written for King-Reed in circumstances that would give rise to vicarious liability for ExprssVu and Shaw. This might be the case where an agent, even a temporary and limited one such as King Reed, defames someone while acting within the scope of its agency. LaPoint v Summach, 2001 BC 805, at para 61 (BC SC).

[43] Here, however, all evidence points to the fact that the article was written after the termination of King-Reed’s work for ExpressVu, and that neither ExpressVu or Shaw had any interest in the allegedly defamatory article. There is no basis on which to infer that King-Reed was acting within the scope of its mandate as outside investigation firm when the article was published.

[44] The impugned statements in the WOW article were not written during the course of the investigation or in an effort to carry out further investigation of the Plaintiff, a circumstance which might make an investigation firm’s client liable for the firm’s actions. Teskey v Toronto Transit Commission, 2003 CarswellOnt 4460. Plaintiffs’ counsel tried to explore in cross-examination of Mr. Dumbreck what the instructions were from ExpressVu during the investigation stage, but this had little to do with the WOW article; I view that line of inquiry to be a strategy for probing the issues in the Graydon Hall actions rather than genuinely aimed at the within defamation actions.

[45] The WOW article was authored after the investigation terminated and the Anton Piller order had been executed – i.e. after the time when ExpressVu exercised even the kind of narrow control that a consultant’s client might have over the consultant. Nothing in the record suggests that the appearance of the article furthered ExpressVu’s cause, or that King-Reed fell vulnerable to ExpressVu’s suggestion that the article be written. Bazley v Curry, 1999 692 (SCC), [1999] 2 SCR 534, at para 41.

[46] I acknowledge, of course, that “the degree of control exercised need not be complete in order to establish vicarious liability.” Robitaille v Vancouver Hockey Club Ltd. (1981), 1981 532 (BC CA), 124 DLR (3d) 228, at 243 (BC CA). Nevertheless, there must be some hint of a controlling relationship in order to credibly put forth an argument based on vicarious liability. Here, there is simply nothing of the kind.

[47] In the present case, it is “safe to determine the matter on a motion for summary judgment because the motion record is sufficient to ensure that a just result can be achieved without the need for a full trial.” Combined Air Mechanical Services v Flesch, 2011 ONCA 764, [2011] OJ No 5431, at para 38 (Ont CA). The affidavits and transcripts of cross-examinations filed in the record have allowed me to gain a “full appreciation” of the events surrounding the allegations made in the Statement of Claim.

[48] In short, and I find the record hollow as it applies to ExpressVu and Shaw. There is really nothing in the record to support the claim against them, and, importantly given the Plaintiffs’ position, nothing that appears likely to be missing from the record.

VI. Disposition

[49] Summary judgment is therefore granted. The actions are dismissed as against ExpressVu and Shaw.

VII. Costs

[50] ExpressVu and Shaw, as the successful parties in this motion, have requested costs on either a full indemnity or a substantial indemnity basis. They submit that they deserve this extra compensation because Plaintiffs insisted on pursing the claims against them despite the obvious pa