ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 07-CV-39927
DATE: 20140123
BETWEEN:
Richard Warman
Plaintiff
– and –
Constance Wilkins Fournier, Mark Fournier, Andrew Spencer (aka Droid 1963), Roger Smith (aka Peter O’Donnell), Jason Bertucci (aka Faramir), Dan Lepage (aka SaskBigPicture), Daniel Martin (aka Padraigh), Jon F. Klaus (aka Klinxx) and John Does 1-2 (aka conscience and HR-101)
Defendants
James O. Katz, for the Plaintiff
Barbara Kulaszka, for the Defendants
HEARD: By written submissions
DECISION on COSTS
R. Smith J.
Overview
[1] Legal costs were incurred in a three-week defamation trial before a jury against a number of different defendants. The defendants asserted their right to freedom of expression on a conservative website entitled www.freedominion.ca (“free dominion”). Two of the defendants, Constance and Mark Fournier, were the operators of the website and they, along with other defendants, wrote postings to the political message board disparaging the plaintiff on many occasions. The defendants maintained their defence of justification, namely that statements made about Mr. Warman in their posts were true, until the trial ended. They also relied on the defence of fair comment. The jury found that the defendants had acted with malice towards Mr. Warman and, as a result, awarded aggravated damages in the amount of $9,000.00 and also awarded $18,000.00 in punitive damages, from which I conclude that the jury found that the defendants acted in a manner that was highhanded and oppressive towards the plaintiff.
[2] The trial dealt with over 40 libellous postings about Mr. Warman. Almost all of the statements complained of were found to be defamatory of Mr. Warman. The plaintiff was completely successful in his defamation action against the defendants. The litigation was complex as it lasted over approximately six years, involved postings on a website and, as such, involved issues of internet libel, including the responsibility of the operators of the website for publications made by other individuals to their website.
Positions of the Parties
[3] The plaintiff submits that he was completely successful as all of the defendants were found liable for aggravated damages including punitive damages for defaming Mr. Warman in their writings on the free dominion website. The plaintiff seeks costs in the amount of $94,992.47 inclusive of disbursements and HST on a substantial indemnity basis as he submits that he exceeded the terms of his Offer to Settle and because the defendants acted maliciously and in a highhanded manner. The plaintiff proposes to apportion the costs of $94,992.47 based on the damages awarded, namely 45%, being $42,746.61, to Connie Fournier; 29%, being $27,547.82, to Mark Fournier; 14% being, $13,298.95, to Roger Smith; and 12%, being $14,399.10, to Jason Bertucci (plus $3,000.00 for motion costs awarded against him).
[4] The defendants ask me to set aside the jury’s verdict on the award of aggravated and punitive damages. I have no jurisdiction to set aside the jury award for aggravated and punitive damages as there was ample of evidence on which the jury could have reached the conclusions they did.
[5] The defendants also submit that nominal costs should be awarded to the plaintiff because the plaintiff offered to settle for $5,000.00 plus substantial indemnity costs against each of the defendants, which is within the jurisdiction of the Small Claims Court. The jury awarded total damages of $42,000.00 plus the costs and pre-judgment interest, and therefore I find that amount recovered exceeded the limits of the Small Claims Court. As a result, I do not agree with the defendants’ submission in this regard that nominal costs be awarded.
[6] The defendants further submit that they are individuals of limited means and therefore nominal costs should be awarded. This issue was not raised at trial and there is no evidence before me of the actual assets and incomes of the defendants. In any event, the means of the unsuccessful party when awarding costs is not a factor to be given great weight.
[7] The plaintiff submits that his claim for relief included granting an injunction restraining the defendants from further publication of the libels and seeking the publication of a retraction, which are remedies that are not available in the Small Claims Court.
[8] The plaintiff further submits that the defendants forced him to go through a lengthy complex defamation jury trial involving 41 separate libellous publications and that the Fournier defendants demanded that Examinations for Discovery be conducted, whereas the plaintiff had proposed to proceed under the simplified procedure as set out in Rule 76 (“the Simplified Procedure”) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. One of the defendants brought a motion to compel a jury trial which would not have been available in the Small Claims Court, and this added to the complexity and time spent on the trial.
[9] The plaintiff submits that none of the defendants made a reasonable settlement offer to the plaintiff even in the face of clear libels against him. The plaintiff also withdrew many of the alleged libels before the commencement of trial and submits that he acted reasonably. The plaintiff further submits that the inability to collect on an award of damages, which is raised in the defendants’ submissions, is one of the main considerations when assessing whether or not to grant a permanent injunction in a defamation case.
Factors
[10] The factors to be considered when fixing costs are set out in Rule 57 and include, in addition to success, the amount claimed and recovered, the complexity and importance of the matter, unreasonable conduct of any party which unduly lengthened the proceeding, the scale of costs and any Offer to Settle, the principle of indemnity, the hourly rate claimed, the time spent, the principle of proportionality, and the amount that a losing party would reasonably expect to pay.
Success
[11] In this case, the plaintiff was successful against all defendants as the jury awarded general damages, aggravated damages and punitive damages against all defendants and found that their conduct was malicious, highhanded and oppressive.
Amount Claimed and Recovered
[12] The plaintiff initially brought his claim under the Simplified Procedure and increased the claims to $100,000.00 when the limits for simplified trials were increased. The plaintiff recovered a total amount of $42,000.00 plus the pre-judgment interest and costs.
Complexity and Importance and Proportionality
[13] The case involved 41 libels published on the internet website operated by the Fourniers and on which postings were made by various individuals which were found to be defamatory to the plaintiff. As a result, it was a complex trial. The defendants brought a motion to have the matter tried by a jury, which required additional time and added complexity to the matter. The issues were of high importance to the parties.
Unreasonable Conduct of Any Party
[14] The jury found that all the defendants had acted maliciously in publishing their defamatory statements about the plaintiff on the website. The jury also found that the defendants acted in an oppressive and highhanded manner, and as a result awarded punitive damages against all the defendants. Therefore, I conclude that the conduct of the defendants in making their publications was unreasonable, given the harsh words used in describing the plaintiff in the published statements. I find the defendants did not act reasonably when they failed to accept the plaintiff’s very reasonable Offer to Settle of $5,000.00 per defendant.
Scale of Costs and Offers to Settle
[15] The plaintiff submitted a Rule 49 Offer to the Fourniers dated November 19, 2007 which he offered to settle for the sum of $10,000.00 plus removal of the defamatory statements from the website, as well as the publication of a retraction. The total award against the Fourniers of the trial was $31,000.00, which exceeded the amount of the plaintiff’s Offer to Settle. A further Offer to Settle dated August 1, 2013 was made to Jason Bertucci. In that Offer, the plaintiff offered to settle for $5,000.00 plus $6,600.00 in costs incurred to that date and proposed a retraction and an apology or, in the alternative, a further additional $1,000.00 for damages and interest.
[16] The defendants also served an Offer to Settle immediately before trial wherein they demanded that Mr. Warman pay their legal costs in the total amount of $55,000.00. The Offer was open for acceptance up to August 16, 2013 and did not include costs of the trial itself. The defendant’s Offer is evidence that the defendants had a reasonable expectation that Mr. Warman’s legal costs would equal and probably exceed this amount as of August 16, 2013.
[17] I find that costs should be awarded on a substantial indemnity scale as the plaintiff exceeded his Offer to Settle made to the defendants, Constance and Mark Fournier, and Mr. Bertucci. The jury also found that all of the defendants, including Roger Smith, acted with malice and highhanded egregious conduct which merited an award of punitive damages and as a result also merits an award of substantial indemnity costs.
Hourly Rates, Time Spent and Proportionality
[18] The defendants do not dispute the hourly rates claimed by counsel for the plaintiff or take issue with the amount of time spent. This was a complex internet defamation trial involving 41 alleged libellous statements published on an internet website, a jury trial that lasted three weeks, numerous pre-trial motions and discoveries, the defendants’ requesting a jury trial, and the entire proceeding lasting over six years.
[19] The issues were strongly contested and the defendants, Constance and Mark Fournier, refused to cooperate by providing the relevant information and giving the true identities of the John Doe defendants, which required five motions, two of which occurred after the successful appeal of the first disclosure Order of Kershman J.
[20] I agree with the statement in 163972 Canada Inc (c.o.b. Teenflo) v. Isacco, 1997 CarswellOnt 636 (Gen. Div.), where the judge stated that the legal fees expended during the course of successfully restoring one’s reputation may be very much higher than the actual award of damages. At para. 3 he stated as follows:
… That the costs significantly exceed the amounts at stake in the litigation is regrettable, but it is a common experience and well known to counsel as one of the risks involved in pursuing or defending a case such as this to the bitter end rather than finding a compromise solution. To reduce the plaintiff’s otherwise reasonable costs on this basis would simply encourage the kind of intransigence displayed by the defendants in this case.
[21] The above comments apply to this case as the defendants maintained the defence of justification until the end of the trial, they requested a jury trial, they requested discoveries, they failed to make any reasonable Offer to Settle, and they failed to accept the reasonable proposals of the plaintiff.
[22] I find that the defendants’ intransigence caused the plaintiff to spend a substantial amount of time and incur substantial legal costs to clear his reputation.
[23] In Moberg v. Patafie, 2012 ONSC 902, at para. 36, Roccamo J. stated as follows:
… Her reasoning is supported by the case law on defamation claims where cost awards can legitimately exceed the value of the claim: see Cusson v. Quan, [2006] O.J. No. 3186, where costs of $246,000.00 were awarded despite the Plaintiff’s recovery of only $125,000.00. This costs award was subsequently upheld on appeal to the Supreme Court of Canada.
[24] As a result, I find that in a complex defamation case such as this one, it would not be unreasonable to award an amount for costs in excess of the amount awarded for damages, and that the time spent and hourly rates were reasonable and proportionate to the very important objective of preserving the plaintiff’s reputation.
Amount the Unsuccessful Party Would Reasonably Expect to Pay
[25] The defendants have not argued that they did not reasonably expect to pay substantial legal costs if they were not successful because, in their own Offer to Settle, they required Mr. Warman to pay them costs of $55,000.00 as of August 16, 2013. The Offer did not specify if it was on a partial, substantial or full indemnity basis. Based on the defendants’ Offer to Settle, I find that they had incurred costs of at least $55,000.00 to August 13, 2013, and conducted their defence in a three-week jury trial and were aware that additional costs would be incurred.
[26] As a result I infer that the defendants would have expected to have incurred another $50,000.00 to conduct a three-week complex jury trial involving over 40 allegedly defamatory publications. I therefore find that if the defendants were unsuccessful, they would reasonably have expected to pay costs in the approximate amount of at least $100,000.00.
Disposition on Costs
[27] Having considered all of the above factors, the defendants are ordered to pay costs to the plaintiff in the amount of $85,000.00 all inclusive, which is to be portioned 45% to Connie Fournier in the amount of $38,250.00; 29% to Mark Fournier in the amount of $24,650.00; 14% to Roger Smith in the amount of $11,900.00; and 12% to Jason Bertucci in the amount of $10,200.00, plus $3,000.00 of costs previously awarded.
Request for an Injunction
[28] The plaintiff requests an injunction restraining the defendants from publishing, in any form whatsoever, any of the statements found to be defamatory of Mr. Warman in this action, as set out in the jury Exhibit J. The plaintiff submits that the evidence at trial rationally supports an inference that the defendants will continue to publish the same defamatory statements on their website. The Fourniers refused to remove the defamatory statements from their website until approximately seven months after being served with the plaintiff’s Statement of Claim and nine months after being served with the plaintiff’s first Notice of Libel.
[29] Both Mr. Bertucci and Mr. Smith had the ability to easily remove the defamatory postings made by them and refused to do so.
[30] The Fournier defendants also continued to post the plaintiff’s Statement of Claim and second Notice of Libel after the commencement of trial in this matter on their website.
[31] After the verdict was delivered, Connie Fournier commenced a new thread entitled “appeal or close free dominion”, and in this thread she posted a link to a copy of Mr. Warman’s Statement of Claim in this matter, which has appeared on their website since November 23, 2007.
[32] Finally, the jury has found that the defendants acted with malice and, as a result, it is reasonable to conclude that similar malicious attacks in similar postings could occur in the future.
[33] The defendants submit that the Fourniers removed the statements found to be defamatory from the posts in May of 2008 and they object to any restrictions on discussing matters of public interest related to a public figure. The defendants submit that the words used in their defamatory publication dealt with matters of public interest and were related to the protection of free speech and to Section 13 of the Canadian Human Rights Act, R.S.C., 1985, c. H-6.
[34] The continued publication of libellous material would cause irreparable harm to the plaintiff’s reputation, and prohibited material has already been found to constitute libel. I find that the balance of convenience favours the granting of an injunction because the terms of the proposed injunction would not prevent any of the defendants from engaging in political comment that was not defamatory, whereas the harm to Mr. Warman’s reputation would be substantial. Based on the fact that the jury found that the defendants made 41 statements which were defamatory of Mr. Warman, that they did so maliciously, andthat they have refused to apologize or publish a retraction, I find that the plaintiff has met his onus of showing that an injunction should issue to prevent the defendants from publishing in any manner whatsoever any statements found to be defamatory of Mr. Warman in this action as set out in jury Exhibit J.
Retraction
[35] The plaintiff requests that the defendants be ordered to publish a retraction at the top of the free dominion home page in prominent view stating as follows:
Retraction re: Richard Warman from August 2007 to May 2008. We published material on the “free dominion” website that attacked the personal and professional reputation of Mr. Richard Warman. Those allegations were false, and we therefore retract them without reservation. Connie Fournier, Mark Fournier, Jason Bertucci (aka Faramir), and Roger Smith (aka Peter O’Donnell).
[36] The defendants submit that I do not have jurisdiction to order a retraction which would in fact be in the form of a mandatory injunction. In Ottawa-Carleton District School Board v. Scharf, 2007 31571 (Ont. Sup. Ct.), G. R. Morin J. ordered a retraction at para. 30 (c) as follows:
An order in the nature of mandamus requiring the defendants to issue a public retraction of the “News Release” entitled “Teach Me I Can Learn” such retraction to be published at the defendants’ expense in the Ottawa Sun and the Ottawa Citizen newspapers within 60 days of the date of this judgment.
[37] Notwithstanding that I find that I have jurisdiction to make such an Order, I am not persuaded that the plaintiff has met his onus for granting this remedy. The fact that the defendants refused to apologize or issue a retraction was factored into the general damages. In addition, I find that the jury’s decision, finding that the 41 postings complained of by Mr. Warman were defamatory, did not meet the defence of fair comment, and were made with malice, is sufficient to vindicate the plaintiff’s reputation in this matter.
Settlement with Spencer
[38] I agree with the plaintiff’s submissions with regard to the portion of settlement funds and costs with regard to Andrew Spencer. I do not agree with the defendants’ submission that the costs should be apportioned based on the number of publications made by each defendant. I find that apportioning based on the amount of the award is appropriate, as submitted by the plaintiff.
R. Smith J.
Released: January 23, 2014
COURT FILE NO.: 07-CV-39927
DATE: 20140123
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Richard Warman
Plaintiff
– and –
Constance Fournier, Mark Fournier, Roger Smith, Jason Bertucci, Dan Lepage, Jon F. Klaus and John Does
Defendants
DECISION ON COSTS
R. Smith J.
Released: January 23, 2014