Court File and Parties

COURT FILE NO.: CV-12-452342

DATE: 20140428

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MOTORETTA INC., Plaintiff

AND:

TWIST & GO POWER SPORTS INC. c.o.b. VESPA BURLINGTON c.o.b. VESPA TORONTO c.o.b. VESPA TORONTO WEST and LUIGI a.k.a. LOU DI BIASE, Defendants

BEFORE: D.L. Corbett J.

COUNSEL: A.B. Schwisberg, for the Plaintiff

Andrew Burns and Donald Park, for the Defendants

HEARD: December 9, 2013

JUDGMENT

[1] The corporate parties are retail vendors of motor scooters in the Greater Toronto Area. The defendant Lou DiBiase is the principal of the corporate defendant, Twist & Go.[^1]

[2] The plaintiff, Motoretta, sues in defamation. It seeks general damages of $10,000, and a permanent injunction prohibiting further defamatory statements by the defendants.

[3] Both sides ask that this case be decided by summary judgment and I am satisfied that it is appropriate to do so.[^2]

Summary and Disposition

[4] The defendants have slandered Motoretta. The $10,000 general damages requested are reasonable and are granted. There shall be judgment for Motoretta for $10,000 plus costs to be fixed as described at the end of this judgment.

[5] The more difficult issue is the request for a permanent injunction. Such an order is not granted as a matter of course and is only available in exceptional cases. This is not such a case: the effect of this judgment, combined with my costs award and the costs the defendants incurred to defend this matter, should deter the defendants from further defamatory statements. The request for a permanent injunction is dismissed.

Background

(a) Toronto Scooter Wars – The Main Theatre of Conflict

[6] Piaggio manufactures Vespa scooters.

[7] Piaggio distributes its Vespa scooters in the USA through a subsidiary (“Piaggio US”).

[8] From 2004 to 2009, Piaggio US contracted with Canadian Scooter Corp. (“CSC”) to distribute Vespa scooters in Canada.

[9] Motoretta and Twist & Go were both Canadian Vespa dealers under contracts with CSC.

[10] Piaggio US and CSC had a dispute. CSC ceased being the Canadian Vespa distributor in October 2009. Piaggio US then assumed the contracts with Canadian Vespa dealers.

[11] Motoretta and CSC are affiliated: they have overlapping (not identical) shareholders and directors. Morey Chaplick is President of both.

[12] After CSC ceased being the Canadian Vespa distributor, Motoretta’s Vespa dealership was terminated by Piaggio US, and Twist & Go became the Toronto dealer for Vespa.

[13] Piaggio’s dispute with CSC and termination of Motoretta’s dealership have led to litigation among Piaggio and CSC and others. Twist & Go is not a party to any of this litigation.[^3]

[14] In the Piaggio litigation, Piaggio alleges (among other things) that CSC took delivery of Vespa scooters and has not paid for them.

[15] Piaggio alleges that at least some of these scooters found their way from CSC to Motoretta, which has continued selling new Vespa scooters after its Vespa dealership was terminated.

[16] This has displeased Piaggio’s Toronto dealer, Twist & Go, which competes with Motoretta in the Toronto retail scooter market. Mr DiBiase expressed Twist & Go’s concerns in a letter in February 2011 as follows:

CSC/Motoretta continue to liquidate their inventory to rates that are well below dealer cost making it difficult for any existing authorized PGA-Vespa dealer to compete and survive;

In addition, CSC/Motoretta are purchasing vehicles from previous dealers at a reduced rate to simply I) be seen as a Vespa dealer; and II) continue to effect the Ontario scooter-market for any future potential sales-growth for PGA and its authorized dealers.

[17] Mr DiBiase’s concerns are understandable. He does not want Motoretta to hold itself out as a Vespa dealer. He does not want Motoretta to sell new Vespa scooters in the Toronto market. He believes that Motoretta sells new Vespa scooters at prices below his own dealer cost. He believes that Motoretta can do this because it obtained scooters from CSC, and from other Vespa dealers, for prices below dealer cost. He believes that CSC sold scooters to Motoretta on this basis because it did not pay Piaggio for the scooters.

[18] Mr DiBiase’s frustration has led him to make various comments about Motoretta, CSC and their principals. Some of these comments have been intemperate. Motoretta seeks to put an end to these intemperate comments in this litigation.

(b) Toronto Scooter Wars – The Secondary Battle

[19] Motoretta believes that Twist & Go has bad-mouthed it to scooter customers on an ongoing basis. It claims to have heard reports from potential customers to this effect for years. Motoretta believes that the frequency and intensity of these comments increased after Twist & Go became the authorized Vespa dealer for Toronto in late 2009.

[20] Motoretta retained private investigators to gather evidence of the defendants’ behaviour. Two investigators, posing as spouses, went to Twist & Go’s Toronto store on April 3, 16 and 21, 2012. They spoke with Mr DiBiase and audio-recorded the conversations. On the strength of these recordings Motoretta commenced these proceedings on April 27, 2012.

[21] A third Motoretta investigator went to Twist & Go on May 2, 2012, to speak to Mr DiBiase while posing as a potential customer. This was after the statement of claim had been served and after Twist & Go had retained counsel.

[22] As noted above, Motoretta believes that the defendants made defamatory statements prior to the investigation. Those statements form part of the narrative to explain why Motoretta retained investigators and then pursued this claim. Motoretta relies on the earlier statements in support of an injunction remedy, but not in respect to its claim for damages.

The Issues

[23] The following issues remain:

(a) Are the impugned words defamatory?

(b) Were the impugned words “published”?

(c) Were the impugned words spoken “of or about” Motoretta?

(d) Were the impugned words justified?

(e) Qualified privilege.

(f) General damages.

(g) Special damages.

(h) Should a permanent injunction be granted?

(i) Costs.

1. Are the Words Defamatory?

[24] A statement will have a defamatory meaning where it 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 the society generally and in particular to cause him [or her] to be regarded with feelings of hatred, contempt, ridicule, fear, dislike or disesteem.[^4]

[25] Defamatory statements may be actionable by a business where the statements are made about that business, or are made about an individual in circumstances where they have the effect of casting aspersions on the business’s reputation.[^5]

[26] The conversations between Motoretta’s investigators and Twist & Go were audio-recorded and took place on April 3, 16 and 21, and May 2, 2012. I accept that the transcripts of those recordings accurately capture what was said.[^6] All of the statements were made by Mr DiBiase at Twist & Go’s Toronto store. Mr DiBiase believed the investigators to be potential customers who were asking about the relationship between the Twist & Go and Motoretta.

[27] Particulars of the allegedly defamatory statements are pleaded in paragraphs 5-11 and 13[^7] of the statement of claim, and are summarized in paragraph 1 of the notice of motion.

[28] Claim, para. 5: alleges that Mr DiBiase said that Motoretta’s owners “have gone to jail” and that Motoretta has not “paid its bills”:

I: You got another shop here, on College Street or something?[^8]

A: No, we’re not affiliated with them. They are not an authorized dealer.

I: Ok. What do you mean by that?

A: They haven’t been an authorized dealer since 2009. If you google Piaggio versus Canadian Scooter Corp., you’ll see online.

I: Ok.

A: Big lawsuit against the parent company and the guys on College Street.

I: And the guys on College Street.

A: We’re talking millions of dollars. Back in 2009 they got a shipment of [Vespa scooters]. [They] never paid the bill. They refused to pay. You get caught and go to jail; when one business steals from another business, the police don’t care…. That’s what the courts are there for. So there’s you know a big lawsuit against them right now.

I: I haven’t been to, I don’t know, I haven’t been to that one. He just mentioned that one to my boyfriend.

A: You’re not going to find a Vespa. They don’t sell Vespas there as much as they advertise Vespas online cause they’re still trying to make themselves look like an authorized dealer.

I: Ok.

A: Yeah, so yeah apparently Piaggio sent them out a cease and desist letter as well. Cause if you got, if you Google “Vespa” or Kijiji “Vespa”[^9] ah, you’ll see that Motoretta comes up as new and used Vespas. Well they can advertise they sell used Vespas and they service used Vespas: there’s nothing wrong with that. You know it’s like a corner garage doing the same thing, ya know, in the open market.

I: Ummm.

A: But when they say they sell new Vespas, that implies that they’re an authorized dealer and they’re selling current 2012 model years. Well they haven’t had Vespas since 2009, anyways 2010 model year, that they have.

I: Yeah so,

A: So do you really want to do business with that kind of people?

[29] Motoretta says these words are defamatory because in their plain and ordinary meaning, in the context in which they were said, the words mean (among other things):

(a) Motoretta’s owners have been arrested, convicted and gone to jail; and

(b) Motoretta has not paid its bills.

[30] I do not agree that these words mean that “Motoretta’s owners have been arrested, convicted and gone to jail”. Rather, what is being said in the impugned passage is: Motoretta took delivery of scooters and did not pay for them. If an ordinary person took goods without paying for them, they would be treated as a criminal and sent to jail. But where a business does that sort of thing, the police view it as a civil matter to be sorted out in a private lawsuit. So that is why there is a “big lawsuit” between Piaggio and Motoretta.

[31] I agree with Motoretta that the words do mean that Motoretta received delivery of scooters, did not pay for them, and now sells or has sold these scooters to retail customers. The words convey Mr DiBiase’s opinion that this conduct is unethical.

[32] Claim, para. 6: alleges that Mr DiBiase said that Motoretta sells the “Stella” brand of scooter, which is “second-grade” and a “copy” of the superior “Vespa” brand:

A: Well there, you’re going to find the brands they carry are Stella which is an Indian copy of the Vespa, and it’s none of these. It’s the old style Vespa with the shifting gears. Ok. The old look uh and [inaudible] motorcycles again another Indian made product. It’s just ah, they’re more or less the second grade market so…

I: So ok so you’d say stay away from that?

A: Well ah, you know what, I would, hmmm, ah like you know. We’re authorized dealers. You go on Piaggio Canada and/or Vespa Canada .com or .ca.

A: Well they ah, umm oh let me show you the Stella which was an Indian made copy of a Vespa. Or were they trying to show you like a Royal Enfield which I don’t think they’re a Royal Enfield dealer.

[33] In my view, the substance of these remarks is that Vespa is the “original” modern scooter, and Stella is an inferior version of the Vespa. By “copy” the plain meaning is not that Stella is an illegal duplication of Vespa’s product, but an attempt to produce a similar competing product, much in the same way that one car might be compared to a competing model of that car. These statements are made by a seller of Vespa products to a customer who is comparing the Vespa product to other similar products. In my view this would be understood as trade rhetoric, a vendor “vaunting its goods” by negative comparison with the goods of its competitors.

[34] One of the investigators, Peter Grace, in his affidavit, includes his opinion that “unless a consumer knew better, the likelihood was that no consumer would do business with Motoretta after hearing Mr DiBiase talk about them….”[^10] I do not agree with this conclusion. A general assertion that the Stella is not as good as the Vespa is not a claim on which a reasonable customer would place weight when coming from a vendor of Vespas trying to persuade the customer to prefer Vespas to Stellas.

[35] Further, this aspect of the claim is really a claim in injurious falsehood rather than slander. The disparaging comments are made about the product. It is an essential element of a claim in injurious falsehood to show that the plaintiff has suffered special damages as a result of the impugned words.[^11] No special damages have been proven here.

[36] In his factum, counsel for Motoretta argues that Mr DiBiase implied that Motoretta is not authorized as a dealer for any brand.[^12] I do not agree. From the context of this and other statements made by Mr DiBiase, it is clear that he tells the investigators that Motoretta is not an authorized Vespa dealer, but is an authorized dealer of some other brands, including Stella.

[37] Claim, para. 7: Motoretta alleges that Mr DiBiase asked the investigator to phone OMVIC[^13] and complain because there appears to be a pattern of regulatory violation by Motoretta:

A: We, we’ve seen it on this end not, not so common but um and I’d really appreciate it if you guys would phone OMVIC and complain because we’ve had a few people come in over the weekend and said they came from there. They asked to buy a Vespa.

[38] The context of this statement is as follows. The defendants were concerned that Motoretta, not an authorized Vespa dealer, was advertising new Vespas to the public. When potential customers arrived at Motoretta’s store, Motoretta would not have new Vespas available and would instead try to sell some other kind of scooter. The impugned comment is based on Mr DiBiase’s inferred understanding that this had happened to the investigator. On this understanding, Mr DiBiase asked the investigator to make a complaint to OMVIC.

[39] The defendants argue that this statement is not defamatory. I agree. It is based on a factual basis the truth of which would have been known by the investigator. If the investigator had not experienced “bait and switch” at Motoretta, then there would be nothing to report to OMVIC. On the other hand, if the investigator had experienced “bait and switch” dealing with Motoretta, this would be a basis for such a report.

[40] Claim, para. 8: Motoretta alleges that Mr DiBiase told the investigator that he had “called CTV about” Motoretta, implying that there was something newsworthy about Motoretta’s conduct:

I: He’s [the second investigator] really busy all the time all of a sudden, that’s the problem. He dropped into that other store on College.

A: I ah just called CTV about them.

[41] The defendants argue that the impugned words are not defamatory. I do not agree. In the overall context of the impugned statements, Mr DiBiase was arguing that Motoretta conducts its business unethically, and its misconduct is so serious as to be newsworthy.

[42] Claim, para. 9: Motoretta alleges that Mr DiBiase said that Motoretta uses illegal “bait and switch” tactics:

A: Um, because they assumed they were a dealer and the reason why they would assume that they’re a dealer is when you type in “Vespa Toronto” – have a look at this [shows the Google search for “Vespa Toronto” on his computer screen]. Well that’s us. We’re paying for that ad.

I: Yeah ok, yeah.

A: They’re paying for this ad and, there, look at the wording on here. Now they say they sell and service used Vespas. There’s nothing wrong with that.

I: Okay.

A: They have new and used. So when you click on there, you see new scooters.

I: What are all these makes anyway? Oh I think I saw those.

A: So here’s a Vespa. So when you go, you go there, they’re listing brand new vehicles. When you go there, they don’t have them. They’re going to give an excuse: “Oh we’re sold out” or that “they’re back-ordered” and they’re going to try to sell you what they do have. They “bait and switch”. This is illegal. We’ve complained to these guys and you know what they’ve done?

I: What?

A: Wanna know? Nothing. And they’re supposed to be protecting you guys.

I: So what happened to your client from the weekend?

A: Well you know, obviously we, we asked them to do the same thing. We, we’ve been complaining as dealers, but, they look at us as, you know, we’re not playing in the sandbox nice, you know.

I: Ok I got it.

A: We’re the “bad kids”. Ah.

I: Yeah, I don’t think he saw any Vespas when he was there.

A: Soooo they’re on their website. Isn’t that illegal?

I: Wow. Well what’s your opinion of the whole situation? I guess you’re kind of…

A: Well our head office is sending a cease and desist letter out to them which they’ll have in two weeks to comply to they they’ll only have get well go to court. But ah at the end of the day you know, we have without having to do that when we came to these organizations that are government-run, to protect the consumer, and they’re not protecting you, then what’s the point of having these people here?

[43] The plain and ordinary meaning of these words is that Motoretta engages in “bait and switch” tactics, claiming to sell new Vespas when it does not do so. It lures consumers into its store with false advertising of selling new Vespas, makes false excuses for having no new Vespas, and then tries to sell alternative products. The defendants have complained to regulatory authorities without satisfaction. Soon, Piaggio will take some kind of legal action about the situation.

[44] The defendants argue that these words are not defamatory. I disagree. The conduct described is both illegal and unethical: luring customers to the store with a false representation about selling Vespas to try to sell them something else.

[45] Claim, para. 10: Motoretta alleges that Mr DiBiase said that Motoretta cheats its customers:

A: We’re re-servicing; we’re fixing up what they claimed to be doing. But they did not… so many occasions we’ve go, we’ve had invoices to provide it so our clients have walked, um, our PC guy that does our uh does our Mac upgrades ended up becoming a client as well…

I: Ok that was cool.

A: He became a client of his and it all turned out to him going private… 2 years ago driving on the QEW.

I: Ok.

A: Okay so his bike broke down. And this is 2000 km after he had just had a service done at… at the other place. Along with an invoice and, you know, the motor would start to rev up, but nothing would happen. So obviously the transmission belt was broken. So, we opened up the transmission, well yeah, we want you to stay here while we do this.

I: Ok.

A: Just in case, so no one can say that oh, I cracked another belt and that’s, you know, took a different one out and show the broken one. I mean, doing my own bait and switch. So photographed, he was right there. So he saw everything we were doing and the belt that we had pulled out that he was expecting that he had paid to have replaced… was not replaced. You can measure it with a tape measure.

I: Ok.

A: And it wasn’t replaced 2000 kms ago and not only was it not done there; we feel it was done 12000 km when he paid for it the last time. It had 36000 kms on his vehicle and every 12 they were replacing the belt. That’s how old the belt was. The spark plug was old. It was old, obviously worn beyond 2000 kms and warranted beyond 1200 km. Like there’s so much wear and tear that we, these parts, that we can tell it’s older, much older, than the used parts, that it’s got – supposedly got – so meanwhile he had a bill for repairs. While I paid for that, I paid for that….

I: So what did he do about it? Did he?

A: What can he do about it? One could go to court over something like that? For an $800 repair service? Most people are just so upset they just, they can’t be bothered going back. But we have definitely stopped these guys from to from doing it to other people.

[46] The plain and ordinary meaning of these words is (a) in respect to the incident described, that Motoretta charged for repair work it had not performed, or it installed badly used parts during servicing where they charged for new parts; and (b) that this incident was part of a pattern of conduct.

[47] The defendants argue that these words are not defamatory. That argument is absurd. Of course they are defamatory.

[48] Claim, para. 11: Motoretta alleges Mr DiBiase said that Motoretta “sold bikes out the back door” and sold bikes that it had not paid for:

I: Oh ok. Yeah cause I was at the other store ah on College.

A: Yeah, they’re not an authorized dealer and they haven’t been for over two years.

I: Oh ok.

A: Yeah.

I: So you’re authorized, so any warranty stuff can be done and they can’t. Do you know?

A: Yeah.

I: Oh ok. Ok.

A: The owners of Motoretta were also of Vespa Canada – Canadian Scooter Corporation. They were given the right between 2004 til 2009 to import and distribute. They lost the rights to import and distribute and lost the rights to be a dealer as a result of getting 4 million dollars worth of vehicles and not being billed.

I: Oh.

A: So there’s recalls out there. There’s, umm, you know people, we don’t know how to reach these people, because they never reported those vehicles, ah vehicle sales, to Piaggio. They did a whole slew of bad stuff that happened in the marketplace.

I: Oh I see.

A: People that had a warranty that was supposed to have replacement motors out of a recall, never had those motors put in. They sold out the back door.

I: And they have been there for a while though, right, like there?

A: Yeah, yup.

I: So you were two companies part of one company at one time then? As being Vespas or no? You were like separate um, what do you call it, like dealerships or was it all one company? That was bringing or representing Piaggio?

A: Well, you see, there were two separate companies, like obviously they have their, dealerships, and then they had their import company to bring the Vespas.

I: Oh ok I see.

A: So because they were the same men, while the same group of owners.

I: Right.

A: The, you know, the bikes that were not paid for were sold through the Motoretta stores.

I: Oh ok.

A: So obviously there was a big conflict of interest with the whole.

[49] The plain meaning of these words is that (a) Motoretta was selling Vespas after it ceased to be an authorized dealer, but not reporting the sales to Vespa. As a consequence, there was no way to track the owners of the Vespas to send them recall or service notices. So people who bought their scooters from Motoretta did not receive important follow-up communications from the manufacturer; (b) Motoretta was “selling out the back door”, which implies some sort of irregularity in the manner of selling; and (c) Motoretta was selling scooters for which it, itself, had not paid, and thus is unethical and/or dishonest and/or acting in a “big conflict of interest”.

[50] The defendants argue that these statements were true. I address this argument below. The defendants do not seriously contest whether these words are defamatory. I agree with Motoretta that it is clear on the face of these words that they are defamatory.

[51] Claim, para. 13: Motoretta claims that Mr DiBiase said that Motoretta has offered for sale and sold products “without warranty:

A: Yeah again there, you can buy a Vespa from them, if it’s used, there’s nothing wrong with that, it’s just like buying a Ford at a used Ford dealer. Um but they’re not, what I’m getting at, they are not an authorized legitimate dealer. Like a…

I: So they shouldn’t be selling the new ones then.

A: If they have new ones to sell, there’s no warranty on it. Because it’s not… it’s kinda like stealing a car and ah it’s ah it wasn’t paid for and the car’s never registered. So how is there any warranty if the car’s never registered? So in order to get a warranty, an authorized dealership has to re-do the PDI, which there will be a bill for.

A: Ok.

I: And then we have to submit paperwork to Piaggio to say, hey, this vehicle was put in for service. We need a bill of sale, and then they’ll honour the warranty based on when you purchased it. Providing this; we need to them feedback.

[52] The defendants argue that these words are true. I address this argument below. They also argue that the words, properly understood, are not defamatory. In my view the words carry the imputation that Motoretta is not “legitimate” and its conduct is “kinda like stealing”. This imputation is clearly defamatory.

Conclusion

[53] The defendants argued that oral argument that “this case is about trade discussion in the marketplace.” They argue that the court should exercise a “gatekeeper function” and conclude that the impugned words “do not rise to defamatory”. I cannot agree. Trade banter does not extend to accusing a competitor of illegal and unethical behaviour. The impugned words cross the line and “rise to defamatory”.

2. Were the Words Published?[^14]

[54] Motoretta bears the onus to show that the impugned words “were published, meaning that they were communicated to at least one person other than the plaintiff”.[^15]

[55] The defamatory words were spoken to Motoretta’s private investigators.[^16] Is this “publication” of the defamatory words?

[56] I adopt this analysis from Brown on Defamation:

Where the person to whom the words are communicated is the agent of the person defamed, there is a difference of opinion among authorities whether this is or is not a legal publication; however there is no reason not to treat it as a publication unless it can be shown in the circumstances that the agent would not be viewed as a third person but merely as the alter ego of the plaintiff for the purpose of receiving the communication.[^17]

[57] The distinction between the category “agent” and the subcategory “alter ego” is a little muddy in the case law. It has long been the case that publication brought about by the contrivance of a plaintiff, with a view to the foundation of an action, is actionable publication.[^18] On the other hand, the legal system cannot function if every libelous statement made to one’s own lawyer, or to an opposing lawyer, becomes a basis for a new cause of action in defamation.[^19]

[58] The courts have come up with several theories to draw the distinction between publication to an agent and non-publication to an alter ego:

(a) There will be no publication where the plaintiff knew or reasonably believed that the defamatory words would be communicated – in this circumstance the plaintiff is deemed to have “consented” to communication of the defamatory words to his agent.[^20]

(b) There will be no publication where the defamatory words are communicated in confidence.[^21]

(c) Solicitors are alter egos of their clients for the purpose of sending and receiving communications.[^22]

[59] The defendant relies upon the small claims court decision in Vallieres v. Samson[^23]and the decision of Dawson J. of this court in Ferenczy v. MCI Medical Clinics.[^24] In Vallieres, the court concluded that the spouse and friend of the plaintiff were “agents” of the plaintiff, and thus that statements made to them were not “publications”. I do not agree with this conclusion. The better analysis, keeping with the general approach of the cases and that advocated by Professor Brown, is to conclude that there may be no damages where a statement is made to a close ally of the plaintiff who does not think worse of him for what she has been told. Otherwise, it would seem that one could defame someone with impunity to her spouse or close friends, and that cannot be the law.

[60] In Ferenczy, Dawson J. concluded that a private investigator was an “agent” of the party who hired him for the purposes of the new Personal Information Protection and Electronic Documents Act[^25] (commonly known as “PIPEDA”). The context of that decision is very different than the one before me. In Firenczy, the plaintiff was suing for medical malpractice, claiming serious injury from the alleged negligence of one of her doctors. The defendant retained a private investigator to observe and record the plaintiff’s activities, to challenge the plaintiff’s assertions respecting the gravity of her injuries. But this has nothing to do with the law of defamation. A private investigator may be a party’s “agent” for the purposes of PIPEDA without being that party’s “alter ego” for the purpose of publication in a defamation action.

[61] I conclude that an “agent” will be an “alter ego” of a plaintiff, for the purposes of publication of a defamatory statement, only in a narrow range of circumstances, where there is a mutual intent that the statement be communicated to the plaintiff through the agent. As reflcted in the cases discussed above, a person’s solicitor will usually be her alter ego under this analysis; her executive assistant may be so as well, depending on the context.

[62] Private investigators are not generally “alter egos” under this analysis. They do not present themselves as agents of the plaintiff, and, to the knowledge of the defendant, are not receiving communications on behalf of the plaintiff. Thus communications made to them cannot be said to be communications intended to be made to, or made to, their principal. This analysis is consistent with the longstanding principle that publication brought about by the contrivance of the plaintiff, with a view to the foundation of an action, is actionable publication.[^26]

[63] On the basis of this analysis, I am satisfied that the impugned words were “published” when they were spoken by Mr DiBiase to Motoretta’s private investigators.

3. Are the Words About Motoretta?

[64] For the impugned words to be actionable by Motoretta, they must be “of and concerning” Motoretta.[^27] The test is whether the reasonable person to whom the words were published would understand them to refer to the plaintiff.[^28] The impugned statements do not all mention Motoretta by name, but all are clearly about Motoretta, the “store on College”.

[65] The defendants argue that some of the impugned statements are “of and concerning” CSC, not Motoretta. I do not agree that the statements distinguish among Motoretta, CSC and their principals. These were informal conversations, and the reasonable listener would have understood from Mr DiBiase that Motoretta and CSC were affiliates run by the same people. The statements were “of and concerning” all of them, all being referred to as “the guys on College Street”. It is true that CSC and Motoretta are distinct companies with some different shareholders. But that would not have been apparent from the impugned statements.

[66] The defendants also argue that comments maligning the “Stella” brand, or other scooters that compete with Vespa, are not comments “of and concerning” Motoretta. I do not have to decide this issue since I have determined that these comments are trade puffery rather than statements of fact capable of being defamatory. However, I note that, while in general the defendants’ argument on this point has some merit, in the overall context, comments maligning the products carried by Motoretta could be taken as a pattern of remarks having as their central thrust that Motoretta takes advantage of its customers and is not a reputable business.

4. Are the Words True?

[67] The substance of Mr DiBiase’s statements is that Motoretta and/or CSC have taken delivery of scooters for which they have not paid. They are selling those scooters to consumers even though they have not paid for them themselves. They are selling them as new products even though they are not authorized Vespa dealers. They “bait and switch”, claiming to sell new Vespas when they do not. Their conduct has negative consequences for consumers: warranties are not automatic. Important manufacturer information may not be directed to consumers, because the sales are not registered with Vespa. Warranties may not be available, or may require extra effort and cost to initiate. And Motoretta charges customers for repair and maintenance that has not been carried out properly or, perhaps, at all. And all of this arises because of unethical conduct by Motoretta – conduct that is “kinda like stealing”.

[68] Having asserted a defence of justification, it is for the defendants to show that these statements are true. The defendants have not done this. Instead they have filed pleadings and other documents filed in other litigation.[^29] Some of these materials contain allegations that are consistent with some of the defamatory statements: for example, Piaggio alleges that it delivered scooters to CSC for which CSC had not paid.

[69] These statements are not proven true by showing that these facts are alleged to be true in another proceeding. It would have been open to the defendants to elicit evidence from Piaggio, or others with knowledge of these matters, to show the truth of the allegations. The defendants did not put such evidence before the court. Thus there is no basis for the court to conclude that any of the allegations are true. And so the general defence of justification must fail.

5. Qualified Privilege?

[70] The defendants did not plead the defence of qualified privilege. Thus I do not decide whether this defence could succeed in respect to some of the statements made by Mr DiBiase. I do note, however, that even if it might be concluded that the statements concerning non-payment of scooters by CSC could be justified by qualified privilege, no basis has been provided in the evidence to establish such a defence for some of the statements, for example: that Motoretta uses “bait and switch” tactics and charges customers for work that is not performed properly or, perhaps, at all.

[71] Motoretta adduced some evidence of malice. Malice is not relevant except (a) to rebut a defence of qualified privilege; or (b) to demonstrate a level of intransigence that could move the court to grant a permanent injunction. There is no defence asserted of qualified privilege, and I address the issue of malice solely under my consideration of the claim for a permanent injunction.

6. General Damages

[72] The quantum of general damages claimed, $10,000, is reasonable. I accept it.

7. Special Damages

[73] Motoretta has not established any specific damage as a result of the defamatory words, and rightly has confined itself to general damages.

8. Permanent Injunctive Relief[^30]

[74] When a defendant is found liable for battery because she failed to obtain informed consent before operating on a patient, the court does not, as a matter of course, issue an injunction restraining the defendant from future batteries. When an employer is found liable for wrongful dismissal, the court does not, as a matter of course, issue an injunction restraining future wrongful dismissals by that employer. No less, where a court finds a defendant liable for defamation, the court does not, as a matter of course, issue an injunction to restrain future defamatory words.

[75] Chapnick J. has described the test as follows:

It is well-settled law that, in appropriate circumstances, a court may grant an injunction to prevent a defendant from continuing to disseminate defamatory material that affects a plaintiff’s reputation….[^31]

Permanent injunctions have consistently been ordered after findings of defamation where either (1) there is a likelihood that the defendant will continue to publish defamatory statements despite the finding that he is liable to the plaintiff for defamation; or (2) there is a real possibility that the plaintiff will not receive any compensation, given that enforcement against the defendant of any damage award may not be possible….[^32]

[76] On my review of the cases, it seems that the two factors listed by Chapnick J. are usually conjunctive. That is, these injunctions are ordered “consistently” when it is likely the defendant will continue on with her defamation, and she will not pay damages awarded against her.[^33] This is a matter of common sense: few defendants of means would continue to publish defamatory words if the consequence would be a series of escalating damages and costs awards against her. It also seems that these orders are now made more “consistently” where publication is via the internet, where defendants of little or no means, and who may be difficult to identify and serve, have a broad ability to publish seriously damaging untruths about others.[^34]

[77] In Newman v. Halstead, the defendant parent used the internet (among other means) to claim that the plaintiff educators associated with pedophiles and were violent towards students (among other things). In granting the permanent injunction, the trial court framed the test conjunctively:

Injunctive relief is an exceptional remedy which will only be imposed by the courts in the clearest of cases. In my view, a case such as this, where there is a likelihood that the publishing of defamatory statements will continue and where there is a real possibility that the plaintiffs will not actually be compensated by the payment of damages, injunctive relief must be carefully considered as a possible remedy.[^35]

[78] As I have explained above, the defendants did cross the line in statements about Motoretta. From the conversations recorded by the private investigators, it seems clear that the defendants understand that there is a line between that which can be said, and that which cannot be said. But there is no reason to believe that the defendants will flout the court’s determination and carry on making defamatory untrue statements about Motoretta, now that there has been a judicial determination of these issues. I realize that Mr DiBiase is alleged to have said that he would “get back at” Motoretta for this litigation in some “creative” way. If the defendants do so, the defendants can be expect Motoretta and the court to use comparable creativity in response.

[79] There is no reason to believe that Motoretta would be unable to enforce a judgment against the defendants. It is axiomatic that injunctions will not lie where damages are an adequate remedy.[^36]

[80] I conclude this is not one of those exceptional cases where a permanent injunction ought to be granted. Of course, if the defendants persist making defamatory statements, this decision is no bar to a future request for an injunction.[^37]

Costs

[81] Success has been divided. Motoretta has established liability. And it has obtained the vindication of its reputation that comes with a judicial determination of the claim. The general damages are $10,000, as sought. However the defendants have prevailed on the issue of a permanent injunction. And the damages awarded are within the monetary jurisdiction of the small claims court.

[82] I am concerned about several aspects of this case. The dispute arises in the context of the larger disputes among Motoretta, CSC, Piaggio and others. However, the defendants did not plead that dispute and assert qualified privilege. Instead they alleged justification.

[83] These protracted and expensive proceedings could have been avoided if both sides had taken a moderate and reasonable approach to this conflict. If Motoretta had offered an early apology and promised to desist, that would have helped. If the plaintiff had sent a “cease and desist” letter before pulling the litigation trigger, that could have helped. If the defendants had not pleaded justification, or if they had adduced some evidence to support that defence, that might have helped focus the case. There was a genuine conflict here, and a real set of issues, but I cannot escape the feeling that both sides have taken steps to wring the maximum amount of misery and financial pain out of the case, unfortunate given the nominal nature of the actual damages.

[84] As is often the way in defamation cases, costs are disproportionate to the general damages. Motoretta calculates its partial indemnity costs at about $110,000. The defendants calculate their partial indemnity costs at about $106,000.

[85] On balance, subject to any material offers to settle, I consider that Motoretta ought to have three-quarters of its partial indemnity costs. If the parties cannot settle the quantum or the effect of any offer to settle, Motoretta shall provide me with written costs submissions by May 16, 2014, and Twist & Go shall provide responding written submissions by May 30, 2014. There shall be no reply or oral costs submissions unless I direct otherwise.

D.L. Corbett J.

Date: April 28, 2014

[^1]: I use (a) “Vespa” for the product, a brand of motorized scooter; (b) “Piaggio” for the manufacturer of Vespa scooters; (c) “Motoretta” for the plaintiff, formerly an authorized Vespa dealer in Toronto; and (d) “Twist & Go” for the corporate defendant, the current authorized Toronto Vespa dealer.

[^2]: See Rule 20.04(2)(b).

[^3]: CSC sued Piaggio in August 2009 (Action CV-09-8342-00CL). Piaggio and Piaggio US sued CSC in November 2009 (Action CV-09-391117). The two actions were subsequently consolidated (Action CV-09-8342-00CL). Piaggio claimed $2.6 million for unpaid Piaggio product against CSC, Motoretta, and related companies and individuals. In November 2010, CSC sued its banker, Bank of Nova Scotia, in connection with letters of credit issued by the Bank in favour of Piaggio; BNS counterclaimed respecting CSC loans from BNS (Action CV-10-413845). In December 2010, one of the shareholders in CSC brought an application against other shareholders, CSC and Motoretta and related companies (CV-10-9015-00CL).

[^4]: Colour Your World Corp. v. CBC (1988), 1998 1983 (ON CA), 38 O.R. (3d) 97 at 106, quoted with approval in Botiuk v. Toronto Free Press Publications Ltd., 1995 60 (SCC), [1995] 3 S.C.R. 3. See also Hyprescon Inc. v. Ipex Ltd., 2007 11316 (ON SC), [2007] O.J. No. 1327 (S.C.J.), paras. 27, 29, 37.

[^5]: Walker v. CFTO Ltd. (1987), 1987 126 (ON CA), 59 O.R. (2d) 104; 37 D.L.R. (4th) 224 (C.A.), per Robins J.A.

[^6]: In quoting from the transcripts, I have corrected obvious spelling errors, and applied punctuation as I think best fits the conversation.

[^7]: Paragraph 11 of the statement of claim was struck out by previous court order. Paragraph 14 alleges statements made to a third party whose evidence is not before the court directly. I decline to find that the statement to the third party was made, as alleged, without direct evidence. At a trial the affidavit evidence of Clyde Grey could not be adduced as evidence that a conversation described to him by a customer was true. Evidence may be elicited on information and belief on a motion for summary judgment, but the plaintiff still bears the burden of persuasion: controversial allegations, supported only by hearsay, will not usually be sufficient to overcome this burden. Having so concluded, I also add that the alleged statements to the third party do not add materially to the thrust of the statements that have been shown to have been made to the three investigators.

[^8]: “I” means “investigator” and “A” means “answer”, the style used in the transcript of the investigators’ recordings.

[^9]: The verb “to Google” means to look something up on the internet using the Google search engine. The verb “to Kijiji” has a similar meaning respecting the Kijiji site.

[^10]: Affidavit of Peter Grace, Motion Record tab 4, p.3.

[^11]: Lysko v. Bradley (2006), 2006 11846 (ON CA), 79 O.R. (3d) 721 (C.A.) at paras. 133-4; Hyprescon Inc. v. Ipex Inc., 2007 11316 (ON SC), [2007] O.J. No. 1327 (S.C.J.), paras. 46-7.

[^12]: Factum of the Plaintiff, p.7, n.33.

[^13]: Ontario Motor Vehicle Industry Council.

[^14]: The defendants moved previously to dismiss the claim on the basis that the words were not “published”, having been spoken to Motoretta’s private investigators. C. Campbell J. concluded that this issue was “a question of mixed fact and law and should be dealt with in the factual context of a trial”: Motoretta v. Twist & Go, 2012 ONSC 5789.

[^15]: Grant v. Torstar Corp., 2009 SCC 61, [2009] 3 S.C.R. 640, at para. 28; Gaskin v. Retail Credit Co., 1965 8 (SCC), [1965] S.C.R. 297.

[^16]: The defendants rely upon the trial ruling of MacFarland J. (as she then was) in Cowles v. Balac, [2004] O.J. No. 4534, to argue that the court should not receive evidence of words spoken to the private investigator who went to Twist & Go on May 2, 2012, after proceedings had been launched and the defendants were represented by counsel. They argue that the investigator was the agent of Motoretta’s counsel, and therefore the investigator’s conversations with the defendants were a breach of R.6(7) of the Law Society’s Rules of Professional Conduct prohibiting solicitors from dealing directly with persons represented by counsel. This argument is disposed of against the defendant by the Court of Appeal’s decision overruling MacFarland J. on this very point: Cowles v. Balac (2006), 2006 34916 (ON CA), 83 O.R. (3d) 660, paras. 197-198 (C.A.).

[^17]: Raymond E. Brown, Brown on Defamation: Canada, United Kingdon, Australia, New Zealand, United States, 2nd ed., looseleaf (Toronto: Carswell, 1999), vol. 2 at 7-113 to 114.

[^18]: See Duke of Brunswick v. Harmer, [1849] 14 Q.B. 185; Rudd v. Cameron, 1912 498 (ON CA), [1912] 27 O.L.R. 327 (C.A.), aff’g 1912 567 (ON SCDC), 26 O.L.R. 154 (Div. Ct.).

[^19]: See Grimmer v. Carleton Road Industries Assn., 2009 NSSC 169 at paras. 37-45.

[^20]: Teichner v. Bellan, 181 N.Y.S. 2nd 842 (1959), adopted in Jones v. Brooks, 1974 942 (SK KB), [1974] 2 W.W.R. 729 (Sask. Q.B.) at 735. In Jones, the court also characterized this “consent” as a voluntary assumption of the risk that he would be defamed, or in the old Latin phrasing, volenti non fit injuria. See also Beaulieu v. Queen’s University, 2004 ABCA 393, where the publication was sought by the plaintiff’s administrative assistant on behalf of the plaintiff.

[^21]: See for example Keung v. Sheehan (2001), 2001 NSSC 59, 193 N.S.R. (2d) 237.

[^22]: See, for example, Getz v. Opseth, 2005 SKQB 69.

[^23]: (2009), 2009 92132 (ON SCDC), 97 O.R. (3d) 761 at paras. 22-23.

[^24]: (2004), 2004 12555 (ON SC), 70 O.R. (3d) 277 (S.C.J.) at para. 30.

[^25]: S.C. 2000, c.5.

[^26]: I do not address the potential defence of “entrapment”, where a defendant has been led into or induced to make a defamatory statement by an agent of the plaintiff, since that does not arise in this case. As is clear from the transcripts, the investigators were neutral in tone when they mentioned Motoretta’s business, and they did not induce the defamatory statements. Similarly, since the impugned words were not delivered in confidence, I do not consider whether confidentiality would undermine “publication” of a defamatory statement.

[^27]: R.E. Brown, The Law of Defamation in Canada (2nd ed, 1995), paras. 6.2, 6.3, 6.9(2).

[^28]: S.G. v. J.C. and P.C. (2001), 2001 3041 (ON CA), 56 O.R. (3d) 215 (C.A.), per Borins J.A., paras. 18-25.

[^29]: The litigation listed above at n.3.

[^30]: Note that this case does not concern interim or interlocutory relief for prior restraint of publication. Different considerations may apply in such cases: The Honourable Justice Robert J. Sharpe, Injunctions and Specific Performance, looseleaf ed. (Toronto: Canada Law Book, 2013); Bonnard v. Perryman, [1891] 2 Ch. 269 at 284; Canadian Metal Co. v. Canadian Broadcasting Corp. (1975), 1975 661 (ON SC), 7 O.R. (2d) 261, 55 D.L.R. (3d) 42; McLeod v. Sinclair, [2008] O.J. No. 5242; Beidas v. Pichler, 2006 26255 (Ont. Div. Ct.).

[^31]: Astley v. Verdun (2011), 2011 ONSC 3651, 106 O.R. (3d) 792, para. 20. Chapnick J. cites Barrick Gold v. Lopehandia, 2004 12938 (ON CA), [2004] O.J. No. 2329 at paras. 77-79 in support of this proposition.

[^32]: Astley v. Verdun, ibid., para. 21. Chapnick J. cites the following authorities in support of this proposition: Hunter Dickinson Inc. v. Butler, 2010 BCSC 827, paras. 119-127; Newman v. Halstead, 2006 BCSC 65, paras. 297-301; Cragg v. Stephens, 2010 BCSC 1177, paras. 34-35, 40.

[^33]: See Brown on Defamation, supra., para. 26-47: where damages are an adequate remedy, an injunction is not generally available.

[^34]: Warman v. Grosvenor, [2008] O.J. No. 4462 (S.C.J.).

[^35]: Newman v. Halstead, 2006 BCSC 65, at para.298. See also Wagner v. Lim (1994), 1994 9013 (AB KB), 158 A.R. 241 (Alta. Q.B.); Daboll v. DeMarco, 2011 ONSC 1.

[^36]: See, for example, Beidas v. Pichler, 2008 26255 (ON SCDC), [2008] O.J. No. 2135 (Div. Ct.), paras. 14-16; Rapp et al. v. McClelland & Stewart Ltd. et al. (1982), 1981 1696 (ON SC), 34 O.R. (2d) 452 (H.C.J.), paras. 3-4.

[^37]: The parties did not argue the effect of s.2(b) of the Canadian Charter of Rights and Freedoms on the issue of permanent injunctive relief in defamation cases, and so I have not considered that issue in this decision.