Sagman et al. v. Bell Telephone Company of Canada et al.
[Indexed as: Sagman v. Bell Telephone Co. of Canada]
Ontario Reports
Ontario Superior Court of Justice,
E.M. Morgan J.
July 10, 2014
121 O.R. (3d) 607 | 2014 ONSC 4183
Case Summary
Torts — Defamation — Damages — Defendant threatening to "crush" plaintiff doctors after losing Quebec lawsuit — Defendant creating websites in plaintiffs' names and posting false statements that plaintiffs had committed criminal offences and could not be trusted as doctors — Statements causing damage to plaintiffs' professional reputations — Each plaintiff awarded general damages in amount of $150,000 — Defendant ordered to pay punitive damages in amount of $50,000.
The plaintiffs were successful medical doctors. One plaintiff was also a medical technology entrepreneur, and the other was a vice-president of a major pharmaceutical company. After losing a lawsuit brought against him by the plaintiffs in Quebec, the defendant threatened to "crush" the plaintiffs. He created two websites in the plaintiffs' names and posted false statements that the plaintiffs had committed various criminal offences and that they could not be trusted as doctors. The plaintiffs sued the defendant for defamation. After the websites were removed pursuant to a consent order, the defendant stopped participating in the action and his statement of defence was struck out. The plaintiffs sought default judgment and claimed both compensatory and punitive damages.
Held, the action should be allowed.
The false statements caused damage to the plaintiffs' personal and professional reputations. The websites were live for approximately three months, during which time the media were advised of their existence. Their only discernible purpose was to harm the plaintiffs. The defendant had never apologized. Each plaintiff was awarded general damages in the amount of $150,000. The defendant was also ordered to pay punitive damages in the amount of $50,000. Finally, the defendant was ordered to pay the plaintiffs' costs in the amount of $39,500.
Barrick Gold Corp. v. Lopehandia (2004), 71 O.R. (3d) 416, [2004] O.J. No. 2329, 239 D.L.R. (4th) 577, 187 O.A.C. 238, 23 C.C.L.T. (3d) 273, 49 C.P.C. (5th) 1, 31 C.P.R. (4th) 401, 2004 12938, 131 A.C.W.S. (3d) 655 (C.A.); Hill v. Church of Scientology of Toronto (1995), 1995 59 (SCC), 24 O.R. (3d) 865, [1995] 2 S.C.R. 1130, [1995] S.C.J. No. 64, 126 D.L.R. (4th) 129, 184 N.R. 1, J.E. 95-1495, 84 O.A.C. 1, 25 C.C.L.T. (2d) 89, 30 C.R.R. (2d) 189, REJB 1995-68609, 56 A.C.W.S. (3d) 495, consd
Other cases referred to
Bains v. 1420546 Ontario Inc. (c.o.b. Niagara Weekly), [2011] O.J. No. 2912, 2011 ONSC 3686 (S.C.J.); Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 132 A.C.W.S. (3d) 15 (C.A.); Color Your World Corp. v. Canadian Broadcasting Corp. (1998), 1998 1983 (ON CA), 38 O.R. (3d) 97, [1998] O.J. No. 510, 156 D.L.R. (4th) 27, 41 C.C.L.T. (2d) 11, 106 O.A.C. 279, 77 A.C.W.S. (3d) 676 (C.A.); Farrell v. St. John's Publishing Co., 1986 2436 (NL CA), [1986] N.J. No. 19, 58 Nfld. & P.E.I.R. 66, 1985 CarswellNfld 113, 38 A.C.W.S. (2d) 379 (C.A.); Hodgson v. Canadian Newspapers Co. (2000), 2000 14715 (ON CA), 49 O.R. (3d) 161, [2000] O.J. No. 2293, 189 D.L.R. (4th) 241, 133 O.A.C. 174, 98 A.C.W.S. (3d) 103 (C.A.); McElroy v. Cowper-Smith, 1967 70 (SCC), [1967] S.C.R. 425, [1967] S.C.J. No. 28, 62 D.L.R. (2d) 65, 60 W.W.R. 85; Mudford v. Smith, [2010] O.J. No. 2297, 2010 ONCA 395, affg 2009 55718 (ON SC), [2009] O.J. No. 4317, 2009 CarswellOnt 6326 (S.C.J.); Royal Bank of Canada v. Battistella, [1994] O.J. No. 1717, 49 A.C.W.S. (3d) 708 (C.A.); Sagman v. Politi, [2011] Q.J. No. 18525, 2011 QCCS 6699, EYB 2011-199720, 2012EXP-378, J.E. 2012-211, 2011 CarswellQue 13770; Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, [2002] S.C.J. No. 19, 2002 SCC 18, 209 D.L.R. (4th) 257, 283 N.R. 1, J.E. 2002-405, 156 O.A.C. 201, 20 B.L.R. (3d) 165, 35 C.C.L.I. (3d) 1, [2002] I.L.R. I-4048, REJB 2002-28036, 111 A.C.W.S. (3d) 935
Statutes referred to
Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 57.01
Authorities referred to
Lidsky, Lyrissa Barnett, "Silencing John Doe: Defamation and Discourse in Cyberspace" (2000), 49 Duke L.J. 855
ACTION for damages for defamation.
Milton Davis and Samantha Green, for plaintiffs.
[1] E.M. MORGAN J.: — The plaintiffs, Uri Sagman ("Uri") and Doron Sagman ("Doron"), and the defendant Paul Politi, also known as Saul Sagman ("Politi"), are all brothers.
[2] Both of the plaintiffs are successful medical doctors. One of them, Uri, is also a medical technology entrepreneur, who has founded or co-founded a number of well-recognized companies developing advanced nanomedicine and biotechnology innovations. The other, Doron, is also a vice-president of a major pharmaceutical company, Eli Lilly Canada Inc. ("Eli Lilly").
[3] The plaintiffs have been the subject of libelous Internet postings written by Politi and published in 2010. These defamatory publications appeared on websites owed by the defendants, Tucows International Corp., Tucows Inc., Tucows.com.co, Belleville Trust, 2183592 Ontario Inc. operating as Uxbridge Solar Farm (the "Politi companies"), which are ultimately owned and controlled by Politi (Politi and the Politi companies are hereinafter referred to collectively as the "Politi defendants").
[4] The offending websites have now been removed. At an earlier stage of the within action, the plaintiffs moved for an injunction requiring the removal of the Politi defendants' websites; ultimately, the Politi defendants agreed to their removal, resulting in a consent order to this effect dated November 30, 2010. Following the injunction motion, the Politi defendants ceased participating in the action or communicating with the plaintiffs and their counsel. On June 25, 2013, the court struck out their statement of defence for failure to deliver an affidavit of documents and attend examinations for discovery.
[5] Politi was adjudged bankrupt on July 10, 2012. An order to continue the present action against him was granted on December 12, 2012.
[6] The plaintiffs seek default judgment against the Politi defendants, and claim both compensatory and punitive damages. Although the websites have been removed from the Internet, the plaintiffs submit that the damage to their respective reputations that these websites were designed to cause has been done.
[7] The defamatory statements authored by Politi, and posted on the Internet by the Politi defendants, are closely linked to litigation commenced in 2008 in the Quebec Superior Court by the plaintiffs. In that action, the plaintiffs sued Politi over his failure to complete a condominium purchase. That action was tried in Montreal before Zerbisias J., whose findings against Politi were damning, to say the least: Sagman v. Politi, 2011 QCCS 6699, [2011] Q.J. No. 18525, 2011 CarswellQue 13770 (S.C.).
[8] In the first place, Justice Zerbisias noted, at para. 93 of her judgment, that Politi had threatened to "crush" Uri for failing to assist him in acquiring an interest in a certain property. Indeed, she found "proof of threats, by Politi against Uri and his family in the event Uri failed to cooperate". Then, at para. 114, Her Honour observed, in a moment of admirable understatement, that Politi has "an elastic notion of the truth". She then went on to find that, in fact, Politi "lacks credibility, integrity, lies with impunity and without any conscience".
[9] The plaintiffs contend, accurately in my view, that the defamatory websites were created by Politi in order to intentionally damage their professional reputations, and as part of his efforts to carry through on his threat to "crush" them. Indeed, at para. 115 of her judgment, Zerbisias J. herself suggested as much:
For example, notwithstanding his evidence before the Court on at least two occasions that he did not think his brother Uri capable of participating in the alleged forgery of documents which divested Belleville Trust of its assets, he did register and create two websites, in September 2010, one in the name of Uri and the other in the name of his younger brother Doron under the names of www.urisagman.com and www.doronsagman.com, sites which would be easily discovered if anybody "googled" their names. In these sites he accuses his brothers of having forged a document and using it to transfer all of the assets of Belleville Trust, as well as attacking their professional reputations, ethics and actions in general.
[10] The publication of the two websites referenced by Zerbisias J. and at issue here followed a false complaint lodged by Politi against Uri with the College of Physicians and Surgeons, in which he requested the revocation of Uri's licence to practice medicine in Ontario. After investigating the matter, the college determined that Politi's complaint did not warrant further investigation or action.
[11] The two impugned websites appear to have been designed by Politi with the specific intent of harming his two brothers. As set out, at para. 13 of the within statement of claim and summarized at para. 16 of plaintiffs' counsel's factum, the websites stated
(a) that Uri falsified documents in order to gain admission to the University of Alberta and to pay lower tuitions fees for himself, and "others", including Doron;
(b) Uri and Doron have been convicted for fraud and theft of natural gas;
(c) Uri and Doron broke gas meters in order to save money on gas bills;
(d) Uri and Doron broke the measuring system inside the gas meters to eight apartment buildings in order to lower gas bills;
(e) Uri and Doron were sued by the gas company and found to have defrauded the gas company resulting in Uri and Doron having to pay heavy fines to the gas company;
(f) Uri and Doron defrauded the gas company on three separate occasions and were convicted in three separate proceedings;
(g) Uri and Doron defrauded the purchaser of a 220 apartment rental building in LaSalle, Quebec by falsifying the rent rolls and misrepresenting the rental income from the property;
(h) Uri and Doron stole $30,000,000 from Belleville Trust by falsifying documents to fraudulently effect the transfer of assets;
(i) Uri ad Doron were sued by Belleville Trust;
(j) Belleville Trust lost in excess of $10,000,000 as a result of Uri's and Doron's theft of $30,000,000 in assets from Belleville Trust;
(k) Uri and Doron stole rental income from properties in the amount of $500,000;
(l) Uri and Doron distorted property and took income from the properties without paying expenses;
(m) Uri and Doron cannot be trusted as doctors;
(n) a publication by Doron and his associates at Eli Lilly Canada Inc. is falsely characterized by Politi as "The Product of Destruction" (sic);
(o) Uri lied in order to obtain grants from the government.
[12] The plaintiffs have pleaded, and all of the evidence in the record confirms, that the above statements made by the Politi defendants are entirely false. The evidence also establishes that the false statements published by the Politi defendants caused damage to the plaintiffs' personal and professional reputations.
[13] Doron practises psychiatry at Toronto East General Hospital and, as indicated at the outset, is an officer of the pharmaceutical company Eli Lilly. He reported the existence of Politi's website "www.doronsagman.com" to Eli Lilly and to his superiors at the hospital. Both were predictably concerned about the impact that the falsehoods published on the website would have on their institutional reputations as well as on Doron's reputation.
[14] Moreover, a link to the website created by Politi was posted on Doron's profile on another website that ranks doctors. In addition to this link connecting the medical website to Politi's defamatory one, a comment was made that Doron cannot be trusted as a doctor, and his ranking on the medical website was downgraded to "Very Bad".
[15] Uri was also obliged to disclose the existence of Politi's website "www.urisagman.com" and its falsehoods to the physicians in the hospital department at which he works. Moreover, he has observed a discernable reduction in the number of requests he receives from government for consultations in respect of his expertise in nanomedicine and other newly developed medical technologies. It is not difficult to conclude that this reduction is a result of the degrading of his professional reputation caused by the falsehoods published by the Politi defendants.
[16] While the two websites have been removed from the Internet, it is impossible to erase the damage that they caused when they were published. The false statements contained in those websites tended to "lower [the plaintiffs] in the estimation of right-thinking members of society generally and in particular to cause [them] to be regarded with feelings of hatred, contempt, ridicule, fear, dislike, or disesteem": Color Your World Corp. v. Canadian Broadcasting Corp. (1998), 1998 1983 (ON CA), 38 O.R. (3d) 97, [1998] O.J. No. 510 (C.A.), paras. 14-15.
[17] The Supreme Court of Canada pointed out in Hill v. Church of Scientology of Toronto (1995), 1995 59 (SCC), 24 O.R. (3d) 865, [1995] 2 S.C.R. 1130, [1995] S.C.J. No. 64, at para. 118, that a lawyer's professional success is "founded and maintained upon the basis of a good reputation for professional integrity and trustworthiness". Counsel for the plaintiffs submits that physicians likewise rely on their reputation with patients and other doctors for their professional advancement. In this context, "general damages in defamation cases are presumed from the very publication of the false statement and are awarded at large": Hill, at para. 164.
[18] The Supreme Court has noted [at para. 2] that the defaming of a "professional man is a very serious matter and ordinarily would be visited with an award of substantial damages, including punitive or exemplary damages if the circumstances so warrant": McElroy v. Cowper-Smith, 1967 70 (SCC), [1967] S.C.R. 425, [1967] S.C.J. No. 28. The purpose of general damages in defamation actions is to console the victim, as well as to vindicate and repair the victim's reputation: Mudford v. Smith, 2009 55718 (ON SC), [2009] O.J. No. 4317, 2009 CarswellOnt 6326 (S.C.J.), at para. 56, affd [2010] O.J. No. 2297, 2010 ONCA 395.
[19] As the Court of Appeal has noted, "[i]n the Internet context, these factors must be examined in the light of what one judge has characterized as the 'ubiquity, universality and utility' of that medium": Barrick Gold Corp. v. Lopehandia (2004), 2004 12938 (ON CA), 71 O.R. (3d) 416, [2004] O.J. No. 2329 (C.A.), at para. 30. Moreover, as the court said, at para. 31 of Barrick, "the anonymous nature of such communications may itself create a greater risk that the defamatory remarks are believed" (citations omitted). Politi's use of the names "www.doronsagman.com" and "www.urisagman.com" were designed to foster the illusion that the plaintiffs themselves had created the sites, which in turn was intended to augment the believability of what Politi knew to be the false statements contained in those sites.
[20] Politi has never apologized for the creation and publishing of the defamatory websites. The sites were live for approximately three months, during which time the media was advised about their existence. Their only discernable purpose was to harm the plaintiffs and to make good on the threats to which Zerbisias J. alluded in the Quebec judgment. The plaintiffs therefore deserve to be awarded general damages in an amount that is substantial enough to reflect the serious damage done to them.
[21] As the Newfoundland Court of Appeal observed in Farrell v. St. John's Publishing Co., 1986 2436 (NL CA), [1986] N.J. No. 19, 1985 CarswellNfld 113 (C.A.), at 13 (QL), "[i]n assessing damages in a libel action a judge, sitting without a jury, has a great deal of latitude". The Ontario case law reveals a wide range of general damages in libel cases where the defamatory words were directly aimed at a plaintiff's professional reputation: from a jury award of $300,000 in Hill, supra, to an award of $25,000 after a judge-alone trial in Bains v. 1420546 Ontario Inc. (c.o.b. Niagara Weekly), [2011] O.J. No. 2912, 2011 ONSC 3686 (S.C.J.).
[22] In a case like the present one, it is important to note that not only economic loss, but personal feelings of injury and hurt are to be taken into account: Royal Bank of Canada v. Battistella, [1994] O.J. No. 1717, 49 A.C.W.S. (3d) 708 (C.A.). Furthermore, in Hodgson v. Canadian Newspapers Co. (2000), 2000 14715 (ON CA), 49 O.R. (3d) 161, [2000] O.J. No. 2293 (C.A.), at para. 60, the Court of Appeal made it clear that aggravating factors such as malice and the devastating effect on the victim may be considered in assessing general damages.
[23] The defamatory statements in the instant case were published in a medium notorious for its ability to spread falsehoods far and wide. Scholars and courts alike have noted that not only are web postings "communicated through a medium more pervasive than print, and for this reason they have tremendous power to harm reputation . . . [but] [t]he extraordinary capacity of the Internet to replicate almost endlessly any defamatory message lends credence to the notion that 'the truth rarely catches up with a lie'": Lyrissa Barnett Lidsky, "Silencing John Doe: Defamation and Discourse in Cyberspace" (2000), 49 Duke L.J. 855, at 862-865, quoted in Barrick, supra, at para. 32.
[24] In Barrick, the court awarded $75,000 in a motion for default judgment in respect of a malicious Internet posting aimed at harming the plaintiff's business. As in that case, Politi's "refusal to retract his statements, or to apologize for them -- indeed, his dogged pursuit of the libelous campaign even after commencement of the proceedings -- is an aggravating factor in this case": Barrick, at para. 51.
[25] Barrick, of course, was a corporate case in which the false and malicious statements had the intended effect of reducing the plaintiff's share price; the present case, by contrast, involves an instance of malice against individuals rather than a corporation, in which the false and malicious statements had the intended effect of destroying not just the profitability of the plaintiffs' medical practices and businesses, but their entire professional stature. In this respect, the defamation here is even more egregious than in Barrick. It aptly illustrates the Supreme Court's observation in Hill, at para. 166, that "[a] defamatory statement can seep into the crevasses of the subconscious and lurk there ever ready to spring forth and spread its cancerous evil".
[26] Another distinguishing feature of the present case is that Politi's defamation was, effectively, a double defamation. He published two different websites, one under Uri's name and one under Doron's name, and crafted his lies about them in a way that was tailored to each of their professional reputations.
[27] In considering the principles established by the Supreme Court of Canada in Hill, and in comparing the conduct of Politi and the impact of his malicious lies on the plaintiffs with that in Barrick and other similar cases, and in further considering the ubiquitous medium used by Politi to defame his two brothers, I would award $150,000 in general damages in respect of each the plaintiffs -- i.e., half the amount that the jury awarded in Hill, and double the amount that the judge awarded in Barrick. The plaintiffs together shall therefore have an award of $300,000.
[28] Plaintiffs' counsel submits that this case is also an appropriate one for punitive damages. He relies on Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, [2002] S.C.J. No. 19, at para. 36, for the proposition that "[p]unitive damages are awarded against a defendant in exceptional cases for 'malicious, oppressive and high-handed' misconduct that 'offends the court's sense of decency'" (citation omitted). I agree with that characterization.
[29] In Barrick, the Court of Appeal noted, at para. 61, that "various individuals and organizations, and at least one regulatory agency, were taking [the defendant's] libellous campaign seriously". The same may be said of Politi's libelous campaigns against the plaintiffs, which were paid attention to by their patients, hospitals, businesses and the College of Physicians and Surgeons. The professional context at which Politi's lies about the plaintiffs were directed, and the high-handed and oppressive results that he aimed to achieve, call for punitive damages as a "means by which the jury or judge expresses its outrage at the egregious conduct of the defendant": Hill, at para. 196.
[30] Punitive damages must be calculated so that they "act as a deterrent to the defendant and to others from acting in this manner": Hill, at para. 196. Counsel for the plaintiff submits in his factum that the present case "is strikingly similar to the Barrick case in that the publication and promotion of the Websites had a long reach and caused the patients and colleagues of the plaintiffs to question them about the statements made on the websites". I agree that this, indeed, was the specific aim of the publications.
[31] Having lost the lawsuit in Quebec over the condominium purchase, Politi went out of his way to fulfill his threat to "crush" the plaintiffs. It is incumbent on a court to express its disapproval of this type of conduct in a most strenuous way. As in Barrick, I would award $50,000 in punitive damages.
[32] As this is a final judgment, plaintiffs' counsel has requested costs of the entire action. That is appropriate under the circumstances. The bill of costs indicates that the plaintiffs seek a total of $39,524.01 on a partial indemnity basis.
[33] The fixing of costs is a discretionary matter for the motions or trial judge under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. That discretion is to be exercised in accordance with the factors listed in rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. These include, inter alia, the principle of indemnity for the successful party (rule 57.01(1)(0.a)) and the complexity of the issues (rule 57.01(1)(c)). Overall, the court is required to consider what is "fair and reasonable" in fixing costs: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.), at para. 26.
[34] Counsel engaged in substantial research in presenting the plaintiffs' respective arguments; the factum and authorities were quite thorough. Given that the costs at issue here are for the entire action to date, including the motion, the request of just under $40,000 is in my view a reasonable one. While the Politi defendants are in default and therefore did not defend the motion, it was incumbent on the plaintiffs to prove their damages and to establish an appropriate quantum of damages. As this matter involved intentional, malicious defamation on the part of Politi and the companies he controls, the reasonable amount of costs sought by the plaintiffs should not have been beyond his expectations.
[35] In the result, the Politi defendants shall pay the plaintiffs $350,000 (comprised of $300,000 in general damages and $50,000 in punitive damages), plus costs in the amount of $39,500, inclusive of all disbursements and HST.
Action allowed.
End of Document