COURT FILE NO.: CV 15-211 SR
DATE: 2019 January 29
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CABLE ASSEMBLY SYSTEMS LTD. and BRIAN MANESE
Plaintiffs
– and –
BEN BARNES and THE CORPORATION OF THE CITY OF BRANTFORD
Defendants
Dennis Touesnard, for the Plaintiffs
Peter Madorin, for the Defendants
HEARD: November 13, 2018
The Honourable r. j. harper
Issues
[1] Plaintiffs’ claims are as follows:
a. Damages for injurious falsehood;
b. Intentional interference with economic relations;
c. Special damages for loss of profit;
d. Damages for abuse of public office;
e. Aggravated damages;
f. Punitive damages;
g. Prejudgment interest; and
h. Costs on a substantial indemnity basis.
Background
[2] The Plaintiff, Brian Manese (Manese), resides in Brantford, Ontario and was an officer, director and shareholder of Cable Assembly Systems Ltd. (CAS Ltd.).
[3] The Defendant, Ben Barnes (Barnes), resides in Hamilton, Ontario. He was the Manager of Network Services for the City of Brantford, (the City).
[4] From in or about 1999, CAS Ltd. was a certified systems vendor for Belden CDT Inc. (Belden). Belden is a manufacturer of quality cable products that are sold worldwide and in Ontario. Belden Cable was referred to in Manese’s evidence as the “Cadillac” of cable. It was also described by Telus’ sales representative as the “Rolls Royce” of cable and by the City’s network engineer, John Trumbell as “Tier 1” cable.
[5] Barnes has been the City’s manager of Network Services since in or about 2010. His predecessor in that position was Tim Hunter. From the mid to late 1990s, CAS Ltd. was engaged by the City to do most, if not all, of the cabling for City projects. According to Manese, CAS Ltd. was used for these projects largely because of the quality of their work and the type of cable they used. The cable was all Belden cable. Because CAS Ltd. was a Certified Systems Vendor of Belden, the cable they installed received a 25-year warranty.
[6] Between 2011 and 2013, Barnes caused the City to engage CAS Ltd. to perform numerous cabling installations. Many of the installations did not require CAS Ltd. to provide competitive bids. The City’s purchasing policy permitted the awarding of jobs with an estimated value less than $5,000.00 without competitive bidding. Jobs above $5,000.00 but below $25,000.00 did not require publication, however, at least three potential contractors needed to be notified of the job in order for them to bid. On jobs above $25,000.00, the job had to be published and open to bidding.
[7] The last work performed by CAS Ltd., was in October 2014. Since that time, the City has not contacted CAS Ltd. with respect to any jobs requiring cable services, including:
a. Jobs not requiring competitive bidding;
b. Jobs requiring competitive quotes; and
c. Jobs requiring tendering.
The Relationship between Barnes and Manese
[8] When Barnes took over as an I.T. manager with the City of Brantford he did not make any rapid changes to how jobs were allocated. CAS Ltd. was engaged to provide cable installation services much like they had been when Tim Hunter was the manager. Over time that changed.
The Changing Interaction between the City of Brantford and CAS Ltd.
[9] Barnes came into his position as manager of the I.T. department at a time when a major project was already underway. This project was the Wayne Gretzky Sport Centre (WGSC). The general contractor for that project was Ball Construction. CAS Ltd. was the subcontractor under Ball Construction. CAS Ltd. was to install the cable for the project.
[10] By January 2012, Barnes would email Manese with any concerns or issues he may have had with CAS Ltd.’s work on this project. Manese would respond by email, addressing the issues raised, the timing of any work, and the results of any resolution of such issues.
[11] An email stream starting on March 6, 2012, sets out such an interaction, including the nature of the resolution. The March 6, 2012, email from Barnes to Manese set out five items of CAS Ltd. work that Barnes had issues with.
[12] Barnes testified in his direct examination that he was generally satisfied with the manner in which CAS Ltd. resolved the issues detailed in this email stream at that time. However, Barnes felt that he needed to continue to see that CAS Ltd.’s work was done so the City team could come in and finish what they needed to finish.
The Becket Leisure Centre Project
[13] In June 2012, CAS Ltd. was asked to submit a quote on a project at the Becket Leisure Centre. Barnes dealt with Manese with respect to this project. Manese asked Barnes if he could separate one of the items listed in the work request. He wanted to take out the installation of cabinets and just quote on the cabling that was required. Barnes told him that the quote could not to be split. CAS Ltd. sent in a quote that included the cabinet installation.
[14] Barnes also asked another contractor, Norfolk, to submit a quote on the same project. However, Barnes did not include the installation of cabinets as a part of the project for the Norfolk quote.
[15] Norfolk was awarded the cable installation for that particular project since their bid was lower than CAS Ltd.
Complaints by Manese about Barnes
Meetings with Manese, Hazel English and Ben Barnes
[16] Manese contacted Barnes’ superior at the City of Branford, Hazel English. Initially, he requested a meeting to discuss developing issues with respect to Barnes and the use of other cable installers without providing any specs for the projects or standards for the materials to be used on the project.
[17] The initial contact was in 2013, over one year after the March 2012 email stream which set out the issues Barnes had with CAS Ltd.’s work, which according to Barnes had been resolved. After Manese talked to Ms. English about the lack of standards and exposure of the City relative to voiding Belden warranties, Ms. English sought to have a meeting with Manese, Barnes and herself to discuss issues of concern.
[18] It was at this meeting, in 2014, that Barnes once again detailed his issues with the quality of CAS Ltd.’s work. However, the issues that Barnes brought up were largely the same five issues that he had related back in March 2012, with a few additions that similarly expressed concern about CAS Ltd.’s work being messy and not competed in a timely manner.
[19] In addition, Barnes related his concerns about a phone system that CAS Ltd. had installed for the City of Brantford. Barnes version of this issue is very different from the version given in the testimony of both directors of CAS Ltd., Manese and his partner Lauer. I will expand on this later in my judgment. It is sufficient, at this point to state that the relationship between Barnes and CAS Ltd. became increasingly strained form this point on.
Manese complains to Darryl Lee and City Councillor
[20] Manese was not satisfied with Ms. English’s response to his concerns. Ms. English told Manese that Barnes was the new head of the department and he did things differently than the former head, Mr. Hunter. Ms. English suggested that Manese learn the new procedures and act within them.
[21] Manese then involved Ms. English’s superior, Darryl Lee in May of 2013. Mr. Lee was the manager of the Corporate Services for the City of Brantford at that time. Manese brought up his concern about the need to use Belden as a standard for cabling. Manese once again emphasised the quality of the product and the fact that once properly installed by a certified service provider the product had a 25-year warranty which would be lost if another product was used or a non-certified provider was used.
[22] Subsequent to the above complaints advanced by Manese, Barnes contacted Belden about their warranty program. Barnes stated that he could only find that one warranty certificate had been issued for a City of Brantford site.
[23] As a result of that call from Barnes to Belden, Belden’s sales representative in charge of the region that included the City of Brantford contacted Barnes to set up a meeting. The Service Manager, Chris Earl (Earl), met with Barnes on September 30, 2014.
The September 30, 2014 Meeting Between Barnes and Earl
[24] On September 30, 2014, Barnes (also referred to as Ben) met with Earl (also referred to as Chris). Earl had requested the meeting with Barnes in order to introduce himself as the Belden representative for the City of Brantford catchment area. According to Earl, this was a standard approach that he took as sales representative so he could learn about clients’ current needs and future needs that might lead to future sales. What was said at this meeting is central to the claims in this case. For that reason, I will relate the written summary of the meeting in its entirety.
[25] During that meeting Barnes made certain statements to Earl that CAS Ltd. claims were false and malicious. According to Manese the statements made by Barnes falsely claimed that CAS Ltd.’s work was poor, substandard and not performed in a workman like nor timely manner.
[26] One of the examples that Barnes gave to Earl related to work done by CAS Ltd. at the Wayne Gretzky Centre in Brantford. On that project CAS Ltd. was the cable subcontractor for Ball Construction, who was the general contractor.
[27] Earl took notes of the meeting, including hand-written notes he made while the meeting was in progress. Earl contacted Manese immediately after the meeting. He told Manese that they needed to meet urgently due to his concerns about what was said at his meeting with Barnes. Earl and Manese met up that same day. After the meeting with Earl, Manese had his administrative assistant transcribe notes. Earl testified that the typed version is an accurate representation of what occurred at the meeting between Earl and Barnes. The notes reflect the following:
Meeting was over 1 ½ hours in length.
Chris went over the merits of using Belden as their cabling infrastructure.
Chris told Ben that the City of Brantford sites were certified for a 25 year Belden warranty through Cable Assembly Systems Ltd. test result, submitted to Belden.
Ben complained about CAS (Cable Assembly Systems Ltd) workmanship and showed pictures of this.
Ben continued to slander CAS. He mentioned that the only reason why he will not standardize Belden is that CAS is the only Belden Certified Systems Vendor located in Brantford and if he standardizes on Belden; CAS will win all of the jobs because they will only have to compete with out of town companies. Ben then stated that Belden should certify Ramkey as a Belden Certified Systems Vendor because they are local. Ben then went on to emphasize this point that CAS does not do good work and other companies such as Brantford Hydro don’t use CAS. Chris mentioned that numerous times in the meeting he tried to change the subject about CAS and discuss the merits of Belden but Ben would continue to bash CAS.
Ben then mentioned about CAS relationship with his predecessor Tim Hunter and the number of invoices; which were many and that he was happy to say he has reduced that number and also intimated that there was an issue with Tim Hunter and Manese.
Earl’s Testimony about the September Meeting
[28] Earl had been the sales manager with Belden for 6 years and was very familiar with CAS Ltd. and their work. He stated that he had never had any workmanship issues with CAS Ltd., commenting “if anything they are overly neat.” However, in the meeting of September 30, 2014 with Earl and Barnes, Barnes constant theme was the dissatisfaction he had with CAS Ltd.’s workmanship.
[29] Earl stated that he tried numerous times to divert the topic to the benefits of using the Belden product, however, Barnes kept going back to his dissatisfaction with CAS Ltd.’s work. Earl stated that Barnes took out his phone and showed him pictures of what he represented to be poor workmanship on the part of CAS Ltd. It is significant that at no time did Barnes give a time frame for the pictures, nor did he tell Earl that the pictures represented issues that occurred in 2012 and had been resolved.
[30] Earl testified that although he could not remember for a certain if he used the word slander, it sounded like something he would have said. He understood that slander means saying something negative about someone incorrectly. He also stated that the word “bashing” is a fair characterization of what Barnes was doing to CAS Ltd. at their meeting on September 30th.
[31] Earl stated that he had no idea why Barnes was telling him what he told him at that meeting. He stated further that he was a little shocked but that he did not draw any conclusions about what Barnes was telling him.
Credibility
Earl
[32] I was impressed with the testimony of Earl. He was forthright and his testimony was factual. He did not editorialize. He made contemporaneous notes of his meeting with Barnes that are consistent with his testimony and the testimony of Manese relative to his meeting with Barnes and Manese on September 30, 2014.
[33] Earl stated that CAS Ltd. was not the only Certified Service Vendors of Belden Cable in the Brantford area. Two other companies, Telus and Bell Canada, were also CSVs. This testimony is in contrast to Barnes who testified that he needed to see if Ramkey could also be certified since CAS Ltd. was the only CSV in the Brantford area.
Barnes
[34] I find that Barnes was not a credible witness on very material issues. He complained about CAS Ltd. having poor workmanship. However, many of the incidents he cited in his evidence did not withstand the scrutiny of the written documentation, other testimony and his cross examination.
[35] Barnes was emphatic that the multiple complaints that Manese made about him to his supervisors had nothing to do with CAS Ltd. not getting any work from the City of Brantford from the middle of October 2014 onwards. He stated that the complaints made to his supervisors and to City Councillors and had no impact on him. He testified that “he was a professional and the complaints that were made represented another day at the office.”
[36] I do not agree with this representation by Barnes. I will review some of the material evidence with respect to the complaints, their timing and the reduction of work the City gave to CAS Ltd. All of this evidence culminated in the September 30, 2014 meeting representations by Barnes to Earl that I find to be purposely false and misleading with the intention to damage the reputation of CAS Ltd.
Brantford Hydro not using CAS Ltd.
[37] Barnes told Earl that Brantford Hydro would not use CAS Ltd. due to their concerns about CAS Ltd.’s prior workmanship. He stated that a person named Morgan who worked for Brantford Hydro told him this. The City of Brantford did not call this person to corroborate this testimony. Manese testified that CAS Ltd. never sought to obtain any work from Brantford Hydro. He also confirmed that CAS Ltd. at no time did any work for Brantford Hydro. This representation by Barnes to Earl is a significant representation, as it was made by Barnes to give the impression that other reputable firms had the same negative view of CAS Ltd.’s work. They could have and should have called Mr. Morgan to give evidence. They did not do so and I draw an adverse inference that they did not call this witness.
Representation of Poor Workmanship Backed up by Pictures
[38] In order to corroborate his representations of poor workmanship to Earl, Barnes showed him pictures of what he alleged was evidence supporting his negative claims. At no time did he tell Earl that most of the issues were two years old and that they had been resolved to Barnes’ satisfaction in a timely manner.
Phone Installation
[39] In 2012, CAS Ltd. installed a phone in one of the WGSC offices for a City employee, Sandy Jackson. CAS Ltd. provided the phone system, however, the City of Brantford did their own work with installing their own network switches. Manese and his partner, Jeffrey Lauer both suspected that the reported echoing on this phone system was the result of the City installing the wrong switch for the system. Both Manese and Lauer went to the site when Barnes was on holidays and did some testing. They determined that the installed by the City were incompatible with the digital phone system. Despite the derivation of the problem, Barnes listed this as one of the installations where CAS Ltd.’s poor workmanship created a problem.
The Discoloration on the Modular Furniture
[40] Another example of an installation by CAS Ltd. that Barnes used as an example of poor workmanship was cable installed in modular furniture. Barnes gave evidence that the installation was sloppy and that visible discoloration from an adhesive substance remained after the job was completed. Manese testified that they made that installation according to the specs provided by the manufacturer. Those specs were filed as an exhibit to confirm that the installation was proper. It was the City that requested that the cable box be relocated and it was the relocation that caused the discoloration, not the original installation by CAS Ltd.
The Whistle Blowing Complaint by Manese and Lauer
[41] On October 1, 2014, just after CAS Ltd. had completed work for the City of Brantford at the WGSC, Lauer observed what appeared to be outdoor cable installed by another contractor inside the building. If this was true, it posed a fire hazard and a risk to all occupants of the WGSC. This including many children. Lauer told his partner, Manese.
[42] Manese setup a meeting with Darryl Lee of the City and one of the City Councillors, Richard Carpenter. Manese was told that Barnes would do some research about the alleged outdoor cable that posed the fire hazard.
[43] By October 24, 2014, Manese was not advised of the results of any research and the hazardous cable still remained in place. Manese sent another email to the City with a copy to Mr. Ted Salisbury. He expressed his concern that the cable was toxic and posed a serious fire risk.
[44] As no response was given to Manese by October 28, 2014, Manese wrote to a local newspaper, the Brantford Expositor and describe the detail of his complaint and his concern. Subsequent to this letter, an article setting out the concerns appeared in that newspaper. It was on that same day that Darryl Lee from the City told Manese that remedial work would be carried out at the site.
[45] It was not until November 26, 2014, that Manese was advised that the City had the installer of that outdoor cable remove it and replace it, remedying the issue. At the time that Manese was making the complaints about the hazardous cable, Ramkey applied to Belden seeking to be certified as a Certified Service Vendor from the Brantford area.
[46] In spite of Darryl Lee telling Manese that all of the remedial work with respect to the outdoor cable had been completed, Lauer saw that same hazardous cable still in place after November. Manese made a further complaint and the fire hazardous cable was removed and replaced some seven months after the original complaint by Manese.
Manese Credibility
[47] I find Manese to be a credible witness on all material issues. His testimony was corroborated by written documentation with respect to the work complained about by Barnes and the timely response to a resolution of the issues.
[48] The good quality of CAS Ltd.’s work was also corroborated by Earl, from Belden, the former manager, Tim Hunter and one of his competitors from Telus.
[49] Manese testified that many of the pictures relied on by Barnes as examples of poor workmanship showed work that was still in progress. I accept this testimony. Many of the pictures reflected cable that was not finally hooked up to the final hook up destination of the cable. Manese testified that if the cable was not hooked up properly it would not have tested positively in order to get Belden approval.
[50] John Trumble (Trumble) had worked for the City of Brantford as a network engineer since August 2012. Prior to that he was a security consultant. He was involved in trouble shooting in the I.T. department at all material times.
[51] Trumble often worked on network issues related to or incidental to work done by CAS Ltd. From time to time, he engaged CAS Ltd. on projects assessed to be under $5,000.00. When asked about the quality of CAS Ltd. work in his direct examination, Tumble stated that overall CAS Ltd. work was satisfactory. He stated they were concerned about a few jobs where the work had been sloppy.
[52] He gave a couple of examples of what he considered sloppy, including the alleged discoloration on the modular furniture. Trumble thought this discoloration was caused by CAS Ltd.’s work. However, he was not made aware of the fact that CAS Ltd.’s work was originally completed according to the manufacturer’s specs. It was the City requesting relocation of the cable box that caused the discoloration on the foot plate inside at the bottom of the module on the inside.
[53] It was Barnes who showed Trumble pictures of what Barnes claimed to be poor workmanship by CAS Ltd. When cross-examined, Trumble agreed with Mr. Touesnard that the majority of the events complained about were over five years old and he had trouble recalling the details of the CAS Ltd. work at issue.
[54] Trumble, who had a significant number of dealings with CAS Ltd. did not corroborate Barnes testimony relative to the alleged poor work of CAS Ltd.
The Law
Interference with Economic Relations
[55] Justice Nordheimer in Janssen-Ortho Inc. v. Amgen Canada Inc. (2003), 2003 CanLII 26024 (ON SC), 26 C.P.R. (4th) 93 (Ont. S.C.) stated at para. 58:
In order to establish the tort of intentional interference with economic relations, Janssen must be able to establish three things:
(a) an intention to injure the plaintiff;
(b) interference with another’s method of gaining his or her living or business by illegal means; and
(c) economic loss caused thereby.
Defamation
[56] Justice Nordheimer also dealt with a defamation claim in Janssen-Ortho Inc. He stated at para. 60:
Finally, the tort of defamation requires Janssen to prove
(a) the words are defamatory, in that they tend to lower the plaintiff in the estimation of right-thinking members of society, or to expose the plaintiff to hatred, contempt or ridicule; and
(b) the defamatory statement was published.
[57] The legal framework applicable to defamation alleged in the employment context was recently summarized by Miller J. in Papp v. Stokes et al.,:
As indicated in Grant v. Torstar Corp. 2009 SCC 61, at paragraphs 28-30:
A plaintiff in a defamation action is required to prove three things to obtain judgment and an award of damages: (1) that 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; (2) that the words in fact referred to the plaintiff; and (3) that the words were published, meaning that they were communicated to at least one person other than the plaintiff. If these elements are established on a balance of probabilities, falsity and damage are presumed, though this rule has been subject to strong criticism: see, e.g., R. A. Smolla, "Balancing Freedom of Expression and Protection of Reputation Under Canada's Charter of Rights and Freedoms", in D. Schneiderman, ed., Freedom of Expression and the Charter (1991), 272, at p. 282. (The only exception is that slander requires proof of special damages, unless the impugned words were slanderous per se: R. E. Brown, The Law of Defamation in Canada (2nd ed. (loose-leaf)), vol. 3, at pp. 25-2 and 25-3.) The plaintiff is not required to show that the defendant intended to do harm, or even that the defendant was careless. The tort is thus one of strict liability.
If the plaintiff proves the required elements, the onus then shifts to the defendant to advance a defence in order to escape liability.
Both statements of opinion and statements of fact may attract the defence of privilege, depending on the occasion on which they were made. Some "occasions", like Parliamentary and legal proceedings, are absolutely privileged. Others, like reference letters or credit reports, enjoy "qualified" privilege, meaning that the privilege can be defeated by proof that the defendant acted with malice: see Horrocks v. Lowe, [1975] A.C. 135 (H.L.). The defences of absolute and qualified privilege reflect the fact that "common convenience and welfare of society" sometimes requires untrammelled communications: Toogood v. Spyring (1834), 1 C.M. & R. 181, 149 E. R. 1044, at p. 1050, per Parke B. The law acknowledges through recognition of privileged occasions that false and defamatory expression may sometimes contribute to desirable social ends.
In Korach v. Moore 1991 CanLII 7367 (ON CA), [1991] O.J. No. 1, the Court of Appeal indicated that where qualified privilege is established, the onus rests on the plaintiff to show malice. [All emphases added]
Abuse of Public Office
[58] I accept the comments of Justice Then, sitting in the Divisional Court in Mitchell (Litigation Administrator) v. Ontario (2003), 2003 CanLII 72345 (ON SCDC), 66 O.R. (3d) 737, at para. 20, with respect to the elements necessary to prove the tort of Abuse of Public Office:
The leading Ontario case on the tort of misfeasance in public office is the Ontario Court of Appeal decision of Odhavji. In this case, the court clarified the elements of this tort in the context of a motion under rule 21.01(1)(b) to strike out the claim as not disclosing a reasonable cause of action.
The Court of Appeal, at para. 22, adopted the elements of this tort as stated by Lord Steyn in Three Rivers District Council v. Bank of England (No. 3), [2000] 2 W.L.R. 1220, [2000] 3 All E.R. 1 (H.L.):
(1) The defendant must be a public officer.
(2) The defendant must be exercising power in his or her capacity as a public officer.
(3) There are two different forms of liability for the tort which depend on the state of mind of the defendant.
a. The first is targeted malice by a public officer which involves bad faith in the sense of the exercise of public power for an improper or ulterior motive.
b. The second form is where a public officer acted knowing that he or she had no power to do the act complained of and that the act would probably injure the plaintiff. The fact that the act was performed in reckless indifference as to the outcome is also sufficient to ground the tort in its second form. The plaintiff had to prove that the public officer acted with a state of mind of reckless indifference to the illegality of his act.
There are also the additional requirements of a duty to the plaintiff, causation, damage and remoteness.
[59] I agree with the submissions of the Plaintiff. The evidence clearly establishes on the balance of probabilities that Barnes was acting as a public officer who was exercising decision making powers granted to him pursuant to a statute and his employment position at the City of Brantford.
[60] The City of Brantford was required to have a purchasing policy as set out in the Municipal Act. That policy was enacted as Bylaw 23-2014. This policy is detailed earlier in these reasons.
[61] The ultimate decision over which contractors were engaged for City projects was with Barnes. For some minor projects, John Trumble engaged a contractor, but he could only use contractors who had already been approved by Barnes. I find that at all material times, Barnes made all the decisions under the purchasing policy regarding projects with a cost of between $0.00 and $25,000.00. I find that the decision not to hire the services of CAS Ltd. after October 22, 2014 was made by Barnes while exercising his statutory power.
[62] I find that the decision not to use CAS Ltd. was made by Barnes for improper or ulterior motives and therefore they were decisions made with targeted malice.
[63] I expand later in these reasons my findings relative to Barnes misleading claims of poor workmanship on the part of CAS Ltd. These claims were the most significant reason that Barnes gave for stopping the hiring of CAS Ltd. I find that Barnes primary motivation for not hiring CAS Ltd. was the series of complaints made by Manese against Barnes. This finding is supported in details that are set out below.
Defamation and injurious falsehood
[64] In this case, I find that the words spoken by Barnes to the Belden representative, Earl, in the meeting of September 30, 2014 were defamatory. A reasonable person would consider the reputation of CAS Ltd. to be lowered by the constant reference to the poor quality of work alleged by Barnes.
[65] The issue now is whether the City of Brantford can satisfy the shifted onus to be successful in their defence. In essence, was there a qualified privilege that applied when the statements were made? If qualified privilege is established the onus shifts back to the Plaintiffs to establish malice on the part of the Defendants.
[66] The September 30, 2014, meeting was requested by Earl so he could introduce himself to the City of Brantford, his function with Belden and to see if further business between Belden and the City of Brantford was possible. Earl stated that it was Barnes who continuously geared the conversation toward the poor workmanship of CAS Ltd. Earl also stated that Barnes continued this theme despite his multiple attempts to divert the conversation to other topics.
[67] I agree with the submission of counsel for the Plaintiffs’ that Barnes comments in the meeting with Earl were not germane or reasonably appropriate to the occasion of the September 30, 2014, meeting. I also find that Barnes had an ulterior motive. He was responding to the many complaints Manese had made about him to his superiors. As a result, he acted in a malicious manner by attempting to malign the reputation of CAS Ltd. and Manese. Given this finding the Defendants cannot rely on a defence of qualified privilege.
Damages
[68] In Nassri v. Homsi, 2017 ONSC 4554, Lederer J. directed his mind to the assessment of damages if a finding of defamation was proven on the balance of probabilities. Commencing at para. 18 he stated:
The presence of damage is established by the finding that there was defamation. General damages are presumed once the tort has been made out. They arise by inference of law and do not require proof of actual injury. As reported in Grant v. Torstar Corp., supra still at para. 28, the only exception is that slander requires proof of special damages, unless the impugned words were slanderous per se: R. E. Brown, The Law of Defamation in Canada (2nd ed. (loose-leaf)), vol. 3, at pp. 25-2 and 25-3. In defamation, damages reflect what the law presumes to be the natural or probable consequences of the defendant’s conduct and the harm which normally results from the tort. General damages include injury to the plaintiff for loss of esteem and injury to the plaintiff’s feelings (Myers v. Canadian Broadcasting Inc., 1999 CarswellOnt 3735 at paras. 156-157, rev’d in part on other grounds and aff’d 2001 CarswellOnt 2037 (C.A.), leave to appeal to the S.C.C. refused [2001] S.C.C.A. No. 433).
Despite the general nature of the appraisal this recognition of damage invites, there must be some instruction or guidelines that direct the inquiry and inform the conclusion. In Barrick Gold Corp. v. Lopehandia, 2004 CanLII 12938 (ON CA), 2004 CarswellOnt 2258 (ONCA) (in turn drawing on Hill v. Church of Scientology(1995), 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130, 25 C.C.L.T. (2d) 89, 126 D.L.R. (4th) 129, 24 O.R. (3d) 865 (note) the Court of Appeal of Ontario provided factors that can be used to assess damages in an action for defamation:
The standard factors to consider in determining damages for defamation are summarized in Hill v. Church of Scientology. They include:
(1) the plaintiff's position and standing;
(2) the nature and seriousness of the defamatory statements;
(3) the mode and extent of publication;
(4) the absence or refusal of any retraction or apology;
(5) the whole conduct and motive of the defendant from publication through judgment; and
(6) any evidence of aggravating or mitigating circumstances.
[69] I find that CAS Ltd. had a good reputation in the cable installation business, not only in Brantford, but throughout Ontario. This is confirmed by the representation of Telus who use CAS Ltd.’s services and are also competitors of CAS Ltd. This reputation was placed in serious jeopardy by the statements made by Barnes.
[70] I find that Barnes made similar false representations relative to poor workmanship by CAS Ltd. to his superiors within the City of Brantford in addition to Earl, the Belden representative.
[71] Barnes never acknowledged that his statements relative to the workmanship of CAS Ltd. were false or defamatory. He continued throughout the trial to represent that CAS Ltd. work was poor, sloppy and lacked timeliness.
[72] It is an aggravating circumstance that Barnes was well aware of the fact that CAS Ltd. used Belden as a sole source for its cable product. He knew or ought to have known that his false statements of poor workmanship on the part of CAS Ltd. (something that he falsely alleged to have been acknowledged by Brantford Hydro) could have a serious negative impact on CAS Ltd.’s business.
General and Non-Pecuniary Damages
[73] Any monetary award of damages for defamation is to demonstrate to the community the vindication of the reputation of the Plaintiffs. The damages are awarded because of the injury to the Plaintiffs’ reputation and not as compensation for the damaged reputation.
[74] Once damaged, a reputation is difficult to restore and the law recognizes that a person whose reputation is damaged suffers injury occasioned by that defamation. I agree with the Plaintiff’s submission that Barnes acted maliciously and that he abused his position of public authority.
[75] Under the circumstances of this case, an award of general damages in the amount of $75,000.00 is appropriate: see McNarin v. Murphy, 2017 ONSC 1678.
[76] Given my finding that the actions of Barnes were malicious, and an abuse of his position, the Plaintiffs are entitled to punitive damages in the amount of $75,000.00.
Damages for lost profit
[77] I do not agree with the Plaintiffs that they are entitled to damages for lost profit in the amount of $94,430.98.
[78] Plaintiff’s counsel submits that this heading of damage is established by comparing the gross margin differences from October 2014 forward. I do not agree that that is a fair and appropriate manner of determining damages for lost profit, if any.
[79] Whether or not the Plaintiffs would have been awarded further contracts by the City of Brantford depended on many variables other than their reputation. These variables were subject to the City’s legitimate desire to increase competition and make an informed decision on contracts awarded that conformed to the purchasing policies.
[80] In addition, CAS Ltd. was well aware that once a lawsuit was started they could not be awarded any contract by the City.
[81] The financial statements of CAS Ltd. demonstrated that the company’s income actually increased in the years from 2014 and following. The Plaintiffs argue that they could have handled the increased work by continuing to do the City work by hiring additional employees. Once again, I find that there is little to no evidence that this could be accomplished. I also find that there are too many variables not before the court, such as the impact on the gross margins given the size of the potential contract and the increase in the expenses to the company in order to properly compete any potential contract. As a result I decline to make any award for lost profit.
[82] If costs cannot be agreed to by February 8, 2019, the parties may provide written submissions relative to costs.
Harper, J., SCJ
Released: January 29, 2019
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