Court File and Parties

Date: 2018-12-18 Ontario Superior Court of Justice

Between: Sustainable Development Technology Canada, Leah Lawrence and Jane Pagel, Plaintiffs (Moving Party) And: Kim Sigurdson, Defendant (Responding Party)

Counsel: Kevin O’Brien and Swetha Popuri, for the Plaintiff No counsel for the Defendant

Heard: Motion heard October 10, 2018

Decision on Motion for Summary Judgment

R. Smith J

Overview

[1] The plaintiffs Sustainable Development Technology Canada, Leah Lawrence and Jane Pagel (hereinafter referred to collectively as “SDTC”) have brought a motion for summary judgment seeking a finding that the defendant, Kim Sigurdson made many defamatory statements against them over approximately two years including the following:

(a) They were guilty of illegal acts and unethical conduct;

(b) They were racist and prejudiced against Indigenous persons; and

[2] In addition, the plaintiffs also seek an injunction to restrain the defendant from continuing to make defamatory statements about them in the future.

[3] The defendant did not file any written materials in response to the summary judgment motion even though he was granted a lengthy adjournment to file responding material. However at the hearing Mr. Sigurdson was sworn and was allowed to give oral evidence and make submissions. The defendant did not argue that the statements he made were not defamatory. Sigurdson essentially argued that the defence of justification applied as he alleged that the defamatory statements he made about the plaintiffs were true. However he has failed to provide any evidence to support the truth of his allegations.

[4] Sigurdson sent invoices to SDTC for consulting fees of $130,413.14 on November 6, 2014 and for $213,445 on November 23, 2014. However SDTC has refused to pay these invoices because it denies ever entering into any consulting agreement with the defendant other than a written agreement for $25,000 which has been paid. Sigurdson acknowledged at the hearing that after SDTC refused to meet with him to discuss settlement of his claim for consulting fees, he embarked on a public campaign of making derogatory statements about the plaintiffs in an effort to force them to settle his claims for over $300,000.00 which he claimed were owing to him for consulting fees.

Facts

[5] SDTC is an Ottawa-based not-for-profit foundation established by the Government of Canada. Its mandate includes supporting projects and companies that develop new technologies, at the pre-commercial phase, and to address issues related to climate change, air quality, clean water and clean soil.

[6] Leah Lawrence is the President and CEO of SDTC. She was appointed to both positions in June 2015. Jane Pagel is a former member of SDTC’s Board of Directors. She was the Acting President and CEO of SDTC from June 2014 until June 2015.

[7] The defendant Sigurdson in an individual who resides in Winnipeg, Manitoba. He was also at one point the President and principal of a company called Indigenous Energy Solutions Corporation (“IESC”).

[8] In 2013, SDTC (along with four companies to whom SDTC had previously provided funding) established the Awareness Community Solutions Program (“ACS”) to assist and foster the development of energy, waste management and clean water technologies that could be used in Canada’s remote, northern Indigenous communities. SDTC incorporated a company called ACS Inc. for the limited purpose of running ACS. Sigurdson was named as the first director in the application for incorporation. SDTC’s affidavit stated that this was done with Mr. Sigurdson’s agreement, but in oral submissions Sigurdson denied that he ever agreed to be the incorporating director of ACS Inc. and claims that this is evidence of fraud by the plaintiffs.

[9] The four companies involved in ACS were Terragon Environmental Technologies Inc., Shipstone Corporation, eTalim Inc., and Enermotion (collectively referred to as, the “Portfolio Companies”). Each of these companies was developing novel clean technologies that had the potential to advance ACS’s mandate.

[10] SDTC approached Sigurdson to participate in ACS through his company, IESC. Sigurdson was approached because he had a relationship with several northern Indigenous communities and could facilitate marketing the Portfolio Companies’ technologies in these communities.

[11] The defendant’s company, IESC and SDTC signed a written retainer, for an agreed fee of $25,000.00 for IESC to perform an inventory of basic infrastructure in remote communities to help determine how the four Portfolio Companies’ technologies could meet the needs of these communities.

[12] IESC also entered into a 5 year written agreement whereby it would receive 5% of the net sale price received by ASC Inc. from the sale of technologies developed by the Portfolio Companies.

[13] The defendant chose not to commence legal action against SDTC for his consulting fees, but rather chose to make public derogatory accusations against the plaintiffs in order to force them to settle his claim. Mr. Sigurdson’s conduct demonstrates that he made the defamatory comments about the plaintiffs for an improper purpose, which makes his conduct malicious.

Issue #1

Should Counsel for the SDTC be Removed?

[14] Before the summary motion was heard, Sigurdson asked me to first hear his motion to have counsel for the plaintiffs’ removed from the record. The plaintiffs did not object to having the defendant’s motion heard before its motion and stated that its summary motion material was sufficient to respond to the defendant’s motion. The court office had received the defendant’s motion, and after it was retrieved, I read it and then heard the defendant’s removal motion first. I dismissed the defendant’s motion to remove the plaintiffs’ counsel for reasons given orally and I am not prepared to reconsider my decision on this motion as requested by Mr. Sigurdson.

Issue #2

Should the summary motion be granted?

Test

[15] In Hryniak v. Mauldin, 2014 SCC 7 [2014], SCR 87 at paragraph 49 the Supreme Court stated that a summary judgment is appropriate where the material presented:

(i) Allows the judge to make the necessary findings of fact, and

(ii) Allows the judge to apply the law to the facts; and

(iii) Is a proportionate more expeditions, and less expensive means to achieve a just result.

[16] I find that additional oral testimony or documentary expert evidence are not needed to allow me to decide the issues raised. I am also satisfied that the criteria set out in Hryniak have been met to allow this matter to be heard on a summary motion. The defendant was granted a lengthy extension to file responding material and has failed to do so. The date for the motion was set on a peremptory basis and the defendant has not sought a further adjournment.

[17] I am satisfied that I am able to apply the law to the largely uncontested facts to decide if the defendant’s communications were defamatory and whether Sigurdson has raised any defence.

[18] I also find that there is no genuine issue requiring a trial because the defendant has not filed any responding material other than his oral submissions, and has not identified any issue that requires a trial. The alleged defamatory material is contained in the many emails sent by the defendant to third parties. There is no dispute that the defendant sent the emails, nor is there any dispute about their content and no other issue was identified which would require a trial.

Were Sigurdson’s Communications Defamatory?

[19] In Grant v Torstar Corp, 2009 SCC 61, [2009] 3 SCR 640 at para 28 the Supreme Court stated that to prove that a communication was defamatory, a plaintiff must demonstrate that:

(i) the impugned words were defamatory, in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person;

(ii) the words in fact referred to the plaintiff; and

(iii) the words were published, meaning that they were communicated to at least one person other than the plaintiff.

[20] The tort of defamation is one of strict liability. Accordingly, if all three elements above are established on a balance of probabilities, falsity and damage are presumed. The plaintiff does not need not show that the defendant intended to do harm, or even that the defendant was careless.

[21] Sigurdson’s communications as set forth in the plaintiffs’ motion materials and summarized at Tab C of their factum are defamatory as they accuse SDTC, Lawrence and Pagel of criminal and unethical conduct, racism and prejudice against indigenous persons. He also accused SDTC and its agents of fraud and criminal activity.

[22] These statements were sent to many different individuals, refer directly the plaintiffs, and I find that these statements would tend to lower the plaintiffs’ reputation in the eyes of a reasonable person. As such I find that the test for defamation has been met by the plaintiffs.

Does the Defence of Justification Apply?

Complaint to Information Commissioner

[23] Sigurdson first complained that the plaintiffs’ law firm were “hacking” his emails. He complained to the Information and Privacy Commission about SDTC’s practice of auto forwarding any of the defendant’s emails sent it to its legal counsel. SDTC hired legal counsel to deal with the many emails received from the defendant after he had submitted his invoices for consulting fees of over $300,000 and SDTC had refused to pay him, because never agreed to pay the defendant any amount for consulting fees greater than the written agreement for $25,000.00.

[24] Sigurdson complained to the Information Commissioner of Canada about SDTC automatically forwarding his emails to their legal counsel. The Information Commission found that the defendant’s complaint was well founded and had been resolved because SDTC had ceased to automatically forward Sigurdson’s emails to its legal counsel. SDTC had agreed to decide if a request for information from the defendant needed to be disclosed to outside counsel on a case by case basis.

[25] The defendant incorrectly stated in several communications that the plaintiffs’ law firm was “hacking” his emails. This was not an accurate description of what had happened.

[26] While the defendant’s complaint about the auto forwarding of his emails to outside counsel was well founded, this finding is not evidence of the truth of his defamatory statements alleging fraud and criminal activity by the plaintiffs. As such, the defence of justification does not apply to these communications.

The Incorporation of ACS Inc.

[27] The defendant alleges that he never agreed to be the incorporating director of ASC Inc. which contradicts the affidavit evidence of the plaintiffs which stated that Sigurdson had agreed to be the first director. The defendant did not find any contradictory material. Whether the defendant agreed to be the first director of ASC Inc. or not, Mr. Sigurdson was aware of and agreed that SDTC would establish ASC Inc., because he agreed with ASC Inc. to receive 5% of the value of the sales made by ASC Inc. of technologies developed by the portfolio companies.

[28] Even if SDTC incorporated ACS Inc. and used the defendant’s name without his consent, it has remained an inactive company, and this does not establish the truth of his defamatory allegations.

[29] The fact that the technologies developed by the portfolio companies for ASC Inc. did not work in the northern communities may have given rise to a claim for misrepresentation, but this does not prove the truth of the defamatory allegations made against the plaintiffs. As a result the defence of justification does not apply to these communications.

Relationship Deteriorated and Defendant Commences Defamatory Campaign

[30] Between November 2014 and June of 2015 over 50 communications were exchanged between SDTC and the defendant but they were unable to resolve the defendant’s claim for consulting fees, which SDTC believed were excessive and unreasonable because it had already paid the defendant the amount that had been agreed upon. The defendant disputes this and stated that a former employee of SDTC had verbally agreed to pay him the consulting fees he claimed were owing of over $300,000.00. However Sigurdson decided not to institute any legal action against SDTC to recover the amount he claimed was owing to him for consulting fees.

[31] The defendant alleges that the technologies developed by the portfolio companies did not work in northern communities and as a result he was unable to make any sales and did not receive any commissions. The defendant became quite upset at the whole situation after he submitted invoices for consulting fees and SDTC refused to pay them. After the plaintiffs refused to meet with him to negotiate payment he decided to commence a defamatory campaign against the plaintiffs to force them to negotiate payment of his consulting invoices of over $300,000.00.

[32] The tone of email communications with the defendant deteriorated progressively and in mid to late 2015 SDTC retained external legal counsel to deal with the defendant’s communications.

[33] On October 1, 2015, Sigurdson wrote to Lawrence, among others, threatening as follows: “I will assume [SDTC does] not wish to seek an amicable solution. With this behind us I will now do what I have to do to remedy this situation.”

[34] On October 25, 2015, Sigurdson again wrote to Lawrence, Pagel, and others. He alleged that SDTC had made “lies to native people, businesses and governments” about the Portfolio Companies’ technologies. He further stated that he would initiate “action” against SDTC, Lawrence, and Pagel by bringing his issues “forth in the public domain”:

Since I have heard nothing back from you I will now start initiating action against you at SDTC by first contacting the attached entities and others stating what you have done with emails, voice records and presentations and provide them will all and any information revolving around this issue. Your lies about the technologies in conversations and presentations to native people, businesses and governments and the total indifference Jim Balsillie, Jane Pagel, Leah Lawrence and of course Rick Whittaker has demonstrated towards Aboriginal people. There is no plausible deniability as you are aware of what your servant did and chose to do nothing.

Beyond that the next steps will be to bring this forth in the public domain and then I will seek a legal remedy […]

If there was ever a time to reach out to me it is now. When you had everything to lose you dumped [ACS] on a native person who because of that has now nothing to lose [emphasis added].

[35] The defendant’s defamatory communications have continued for three years, a summary of which are attached at Schedule C to the plaintiffs’ factum. I find that the defendant has not presented any evidence to support the truth of his allegations and as a result the defence of justification does not apply to any of the defamatory communications.

Does the Defence of Fair Comment Apply?

[36] The defence of fair comment may be raised in respect of statements of opinion that are found to be defamatory. As held by the Supreme Court in Simpson v. Mair, a defendant claiming fair comment must satisfy the following test:

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

(b) The comment must be based on fact;

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

[37] If the impugned words are comment, the comment must explicitly or implicitly indicate, at least in general terms, the facts upon which the comment is being made. If the factual foundation is unstated or unknown, or turns out to be false, the defence is not available. A bold comment asserted such that it cannot be understood as an inference is likely to be treated as fact.

[38] The allegation that “one has committed or participated in fraud is an allegation of fact”, not comment.

[39] The defence of fair comment, even if successful, is defeated if the plaintiffs prove express malice. Malice is commonly understood as spite or ill-will, and also includes any indirect motive or ulterior purpose. It may also be established by showing that the defendant spoke dishonestly, or in knowing or reckless disregard for the truth.

[40] Express malice may be proved through extrinsic or intrinsic evidence. Intrinsic evidence is evidence that the words themselves provide. Extrinsic evidence is evidence apart from the words themselves that tends to show that in publishing the statement the defendant was motivated by personal ill-will or some other improper motive, in contrast to a motive inspired by a sense of duty or the mutual interest that the occasion created.

[41] In this case the defendant has alleged that the plaintiffs have committed fraud and criminal acts. These are allegations of fact and not comment and as such the defence of fair comment does not apply to Sigurdson’s defamatory communications.

[42] The evidence also supports a finding that the defendant acted maliciously because he was angry of SDTC and its directors for discontinuing the ACS program and for failing to pay him a fair amount for his efforts to unsuccessfully market the technologies developed by the Portfolio companies. The defendant commenced his public defamatory campaign against the plaintiffs for the improper purpose of forcing the plaintiffs to pay him several hundred thousand dollars of consulting fees which makes his actions malicious.

[43] In addition, based on the evidence before me no person could honestly hold his opinions based on the proved facts before me.

[44] As a result, I conclude that the defence of fair comment does not apply to Sigurdson’s defamatory communications in these circumstances.

Does the Defence of Qualified Privilege Apply?

[45] In Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, 126 DLR (4th) 129 at para 146 the Supreme Court stated:

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

[46] In RTC Engineering Consultants Ltd. v Ontario (Ministry of Solicitor General & Correctional Services – Office of Fire Marshall), 58 OR (3d) 726 (CA), 112 ACWS (3d) 596 at para 14, the Court of Appeal held that qualified privilege attaches only to the extent that the communication was reasonably appropriate in the context of the circumstances at the time the information was given and attaches to the occasion when the defamatory statement is made, not to the statement of itself.

[47] The test is whether persons of ordinary intelligence and moral principle, or the great majority of right-minded persons, would have considered it a duty to communicate the information to those to whom it was published. The onus is on the defendant to prove all of the facts and circumstances necessary to bring the impugned words within the scope of the privilege.

[48] The defendant has failed to prove any facts or circumstances that would bring his statements within the scope of qualified privilege and this defence is defeated by malice as I have found that Sigurdson’s defamatory communications were motivated by malice.

Damages

[49] In MacRae v Santa, [2006] OJ No 3852 (Ont SCJ), 151 ACWS (3d) 1169 at para 34, the court held that in an action for defamation damages are presumed, as harm to reputation is presumed from the mere publication of the defamatory words.

[50] In Barrick Gold Corp v Lopehandia, 71 OR (3d) 416 (CA), 239 DLR (4th) 577 at para 30 (“Barrick”), the Court of Appeal held that the factors to consider in determining the quantum of damages for defamation include the following:

(i) The plaintiffs’ position and standing,

(ii) The nature and seriousness of the defamatory statements,

(iii) The mode and extent of publication,

(iv) The absence or refusal of any retraction or apology,

(v) The whole conduct and motive of the defendant from publication through judgment, and

(vi) Any evidence of aggravating or mitigating circumstances.

[51] In the Internet context, these factors must be examined in the light of the ubiquity, universality and utility of that medium.

[52] SDTC is a public institution that relies on public trust to fulfill its core mandate of promoting the development and adoption of clean technologies. Defamatory allegations against SDTC and its management suggesting illegal, fraudulent conduct or racial bias undermines SDTC’s mandate and the public confidence in the institution. Such communications are also disruptive to SDTC’s workplace. The court in Brent v. Nishikawa quoting the court in Mack v Northhill News Ltd. which stated as follows:

The publication of defamatory words against people in public life undermines and weakens the fabric of our democratic process. By imputing improper motives, lack of good faith, or acting for a pecuniary interest, such libels discourage Canadians from entering public service. Damages serve as a deterrent to this practice and offer a measure of protection to those serving their communities.

Sigurdson’s defamatory communications, while serious in and of themselves, are more damaging given that the plaintiffs’ are part of a public institution.

[53] Sigurdson’s defamatory communications were published through numerous emails and letters addressed to dozens of prominent individuals in both the public and private sectors. The elected mode of Sigurdson’s communications, together with their nature and content, clearly demonstrate that he intended to disseminate his damaging messages both selectively and widely.

[54] To date, Sigurdson has not apologized or even acknowledged his defamatory conduct. No retractions have been made. In contrast, the whole of Sigurdson’s conduct demonstrates an escalating indifference to publicly disparaging the plaintiffs regardless of what damage he may cause.

[55] The plaintiffs seek general damages of $50,000 and punitive damages of $50,000. I find that the defendant has acted in a misguided manner by using the media to harass and make false defamatory allegations against the plaintiffs rather than simply making a claim for the consulting fees he believes he is owed. The plaintiff has not retracted any of his defamatory statements and in fact continues to allege that they are true, without any supporting evidence.

[56] In these circumstances the plaintiffs are each awarded damages of $15,000 for a total of $45,000. I am not awarding punitive damages as I am satisfied that this award of damages plus an injunction will be sufficient to deter the defendant from making further defamatory comments about the plaintiffs.

Should an Injunction be Granted?

[57] In Barrick Gold Corp v Lopehandia at para 78 and in Astley v Verdun at para 68 the court held that while an extraordinary remedy, permanent injunctions have been ordered in defamation actions where:

(i) There is a likelihood that the defendant will continue to publish defamatory statements despite the finding that he is liable to the plaintiffs for defamation; or

(ii) There is a real possibility that the plaintiffs will not receive any compensation, given that enforcement against the defendant of any damage award may not be possible.

[58] The defendant’s campaign of harassing the plaintiffs by defamatory communications has continued for 3 years and did not abate even after this action was commenced and therefore I find that there is a strong likelihood that he will continue to publish defamatory communications about the plaintiffs. While I did not receive evidence of the plaintiffs’ financial situation he has stated that the he had nothing to lose and he was not represented in the hearing. In these circumstances I find that there is also a strong possibility that he will be unable to pay the judgment. For these reasons a permanent injunction is granted enjoining Kim Sigurdson, directly or indirectly, from publishing and/or broadcasting, or encouraging or assisting others to publish or broadcast any statements, in any manner whatsoever, which in their plain and ordinary meaning or by innuendo suggest that:

(a) The plaintiffs were involved in any criminal or improper activity with respect to the ACS program;

(b) The plaintiffs are racist and or prejudiced against Indigenous persons; and

Costs

[59] The plaintiffs seek costs of $84,875 on a substantial indemnity basis or alternatively of $56,583 on a partial indemnity basis.

[60] The plaintiffs were completely successful. The matter was complex, the amount of time spent was reasonable due to the extensive amount of defamatory statements, and the complexity of the defamatory proceeding However the defendant appears to be of limited means and the technologies that he attempted to market did not work. In the circumstance, the defendant is ordered to pay costs on a partial indemnity basis of $35,000.00 inclusive of disbursements plus HST.

R. Smith J.

Sustainable Development Technology Canada v. Sigurdson, 2018 ONSC 7320

Case Summary