Theralase Technologies Inc. v. Lanter et al.

[Indexed as: Theralase Technologies Inc. v. Lanter]

Ontario Reports Ontario Superior Court of Justice Myers J. January 13, 2020 149 O.R. (3d) 153 | 2020 ONSC 205

Case Summary

Civil procedure — Commencement of proceedings — Service — Substituted service — Plaintiffs alleging defamation by postings to website under pseudonyms — Master authorizing service by e-mail and private message to website accounts — Defendants noted in default — Court having jurisdiction in personam over unidentified defendants — Plaintiffs entitled to default judgment.

Civil procedure — Costs — Substantial indemnity — Plaintiffs alleging defamation by postings to website under pseudonyms — Master authorizing service by e-mail and private message to website accounts — Defendants noted in default — Plaintiffs entitled to default judgment — Defendants' abusive conduct in not responding to claim justified substantial indemnity costs.

Courts — Jurisdiction — Plaintiffs alleging defamation by postings to website under pseudonyms — Master authorizing service by e-mail and private message to website accounts — Defendants noted in default — Court having jurisdiction in personam over unidentified defendants — Plaintiffs entitled to default judgment.

Damages — Defamation — Aggravated damages — Punitive damages — Corporate and personal plaintiffs alleging defamation by postings [page154] to investment website — Postings by various defendants alleging unprofessional and unlawful conduct — Damages assessed against each defendant individually for each plaintiff individually.

Torts — Defamation — Procedure — Summary judgment — Plaintiffs alleging defamation by postings to website under pseudonyms — Master authorizing service by e-mail and private message to website accounts — Defendants noted in default — Court having jurisdiction in personam over unidentified defendants — Plaintiffs entitled to default judgment.

The corporate plaintiff was a pharmaceutical company. The personal plaintiffs were two of its officers. Each of the 12 defendants was alleged to have posted defamatory statements about one or more of the plaintiffs on an investment website. The postings were made using pseudonyms. In general, the postings asserted that the corporation's management was untruthful and unprofessional, that it was operating unlawfully and improperly from the investors' perspectives, and that the personal plaintiffs were unprofessional, incompetent managers who had committed criminal acts. The plaintiffs recognized one of the posters as a former employee, but they could not identify any of the others. A master authorized the plaintiffs to serve the defendants by e-mail and by private message to their accounts on the website. Only one defendant responded to the statement of claim, and the others were noted in default. The plaintiffs moved for default judgment against those remaining defendants.

Held, the motion should be allowed.

Where a form of service can reasonably be expected to bring court proceedings to the attention of an unidentified defendant at whom the litigation finger has been appropriately pointed, judgment can issue against the defendant despite the fact that the plaintiffs and the court do not know the defendant's name. The form of service authorized by the master was reasonably expected to bring the proceedings to the attention of the users who posted under the pseudonyms listed in the statement of claim and accordingly the court had jurisdiction over them in personam.

Damages were assessed against each defendant individually for each plaintiff individually, noting that the posts were read only a few hundred times at most before they were removed. General damages were awarded in amounts ranging from $7,500 to $35,000, with some of the defendants assessed aggravated damages in amounts ranging from $10,000 to $15,000. One defendant who posted a message that particularly attracted the court's disapproval regarding retribution, deterrence and condemnation was ordered to pay $17,500 in punitive damages.

The defaulting defendants' failure to participate in the action made their conduct all the more abusive by causing the plaintiffs to incur substantial sums to try to identify them. They were ordered jointly and severally to pay costs on a substantial indemnity basis.

Cameron v. Liverpool Victoria Insurance Co., [2019] UKSC 6, [2019] 3 All E.R. 1, [2019] 1 W.L.R. 1471, [2019] 2 All E.R. (Comm.) 467, [2019] All E.R. (D.) 103 (Feb.), apld

Other cases referred to

Astley v. Verdun (2013), 118 O.R. (3d) 43, [2013] O.J. No. 4942, 2013 ONSC 6734, 234 A.C.W.S. (3d) 328, 110 W.C.B. (2d) 71 (S.C.J.); 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, 131 A.C.W.S. (3d) 655, 2004 CCLG para. 24-657 (C.A.); Cable Assembly Systems Ltd. v. Barnes, [page155] [2019] O.J. No. 6567, 2019 ONCA 1013; Hill v. Church of Scientology of Toronto (1995), 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, 56 A.C.W.S. (3d) 495, REJB 1995-68609; Household Realty v. Winsor, 2002 CarswellOnt 4016; Laframboise v. Woodward (2002), 59 O.R. (3d) 338, [2002] O.J. No. 1590, [2002] O.T.C. 290, 113 A.C.W.S. (3d) 576 (S.C.J.); Manson v. John Doe No. 1 (2013), 114 O.R. (3d) 592, [2013] O.J. No. 530, 2013 ONSC 628 (S.C.J.); Whiten v. Pilot Insurance Co. (2002), 58 O.R. (3d) 480, [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, 111 A.C.W.S. (3d) 935, REJB 2002-28036

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg 194, rules 16.04, 19.02(1)(a)

Authorities referred to

Barnett Lidsky, Lyrissa, "Silencing John Doe: Defamation and Discourse in Cyberspace" (2000), 49 Duke L.J. 855 Collins, Matthew, The Law of Defamation and the Internet (Oxford University Press, 2001)

MOTION for default judgment.

Sarah J. Erskine and Shannon Bennett, for plaintiffs.

F.L. MYERS J.: —

Background

[1] The plaintiffs move for default judgment against all of the defendants other than Mr. Lanter. All of the defendants other than Mr. Lanter have been noted in default. The action is proceeding against Mr. Lanter.

[2] This motion raises the issue of whether the court has jurisdiction to grant judgment against unidentified defendants for defamatory statements published on the Internet. For the reasons that follow, I find that where a form of service can reasonably be expected to bring court proceedings to the attention of an unidentified defendant at whom the litigation finger has been appropriately pointed, judgment can issue against the defendant despite the fact that the plaintiffs and the court do not know the defendant's name.

The Procedural Facts

[3] The plaintiffs' claims are for defamation. Each of the defendants is alleged to have posted defamatory statements about one or more of the plaintiffs on a website known as Stockhouse.com. The website is aimed at investors in Canada and the U.S. It has separate pages relating to each company whose shares [page156] trade on public markets in North America. The pages list publicly available information about each of the listed companies.

[4] The Stockhouse.com webpage for each listed company includes a function called the "Bullboard" which provides an Internet chat forum on which users are able to publish self-generated content about the company. Moreover, they can do so using pseudonyms to avoid disclosing their true identities.

[5] Stockhouse.com also provides its users with an internal messaging function by which users may communicate with each other privately. It is akin to an internal messaging service like Facebook Messenger and Twitter Direct Messages.

[6] The plaintiffs allege that the defendants published defamatory statements of and concerning each of them on the Theralase Bullboard using the pseudonyms set out in the title of proceedings above. The plaintiffs recognized one of the posters as a former employee named Michael Borovec. They could not identify any of the others.

[7] Prior to commencing this action, the plaintiffs obtained a court order requiring the owner of Stockhouse.com to disclose the actual identities of the users whose comments it published on its website. The owner claimed that it suffered technical problems that prevented it from determining the posters' identities. However, it was able to provide e-mail addresses for all but one of them.

[8] The plaintiffs have chosen not to proceed against Stockhouse.com although it published the posts on its website. Instead, the plaintiffs sent libel notices and requests for identification to all of the defendants at the e-mail addresses provided by Stockhouse.com (with the exception of John Doe No. 1, also known as LAZERR00, for whom no e-mail address was provided). In the absence of any responses, in April 2019, the plaintiff sent a copy of the statement of claim to each of the defendants by e-mail (except John Doe No. 1, also known as LAZERR00).

[9] By order dated May 30, 2019, Master Abrams authorized the plaintiffs to serve the defendants by e-mail and by private message to their accounts on Stockhouse.com. All of the defendants were duly served by e-mail under this order except John Doe No. 1, also known as LAZERR00. The e-mail sent to John Doe No. 9, also known as TUESDAYNIGHTRID, generated an error message suggesting that the e-mail account may not have remained active. At that time, the defendants John Doe No. 1, also known as LAZERR00, John Doe No. 2, also known as PENNYOILKING, John Doe No. 4, also known as BIONICJOE, and John Doe No. 8, also known as TRUENORTHSTRONG still had active accounts at Stockhouse.com. They were also served [page157] with the statement of claim by private messages to those accounts under the master's order.

[10] Only Mr. Lanter responded to the statement of claim. Each of the defendants other than Mr. Lanter were duly noted in default. Under rule 19.02(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, they are deemed to admit the allegations pleaded against them in the statement of claim.

[11] The plaintiffs also served notice of this motion for default judgment on the defaulting defendants by e-mail. By the time that e-mail was sent, the e-mails accounts of the defendants John Doe No. 2, also known as PENNYOILKING, and John Doe No. 4, also known as BIONICJOE, also generated error messages suggesting that those e-mail accounts may have been shut down in the interim.

Jurisdiction to Grant Judgment against Unidentified Defendants

[12] Nothing in the Rules of Civil Procedure anticipates final judgments being granted against unidentified defendants. Civil proceedings generally involve claims and judgments in personam (against a person). There are many cases started with placeholder names like "John Doe" pending the identification of the actual defendant before final judgment issues. But counsel was able to locate only one precedent in Ontario specifically granting a final judgment against an unidentified party.

[13] In Manson v. John Doe No. 1 (2013), 114 O.R. (3d) 592, [2013] O.J. No. 530, 2013 ONSC 628 (S.C.J.), the defendant was an anonymous blogger on a website owned by Google. Google advised the plaintiff that it had sent the plaintiff's motion seeking the identity of the defendant to the defendant by e-mail and that the defendant had responded indicating that he was seeking legal counsel. Ultimately the plaintiff was provided with the defendant's e-mail address although it could not determine his name.

[14] Goldstein J. wrote [at para. 20]:

There are few things more cowardly and insidious than an anonymous blogger who posts spiteful and defamatory comments about a reputable member of the public and then hides behind the electronic curtain provided by the Internet. The defendant confuses freedom of speech with freedom of defamation. There are, undoubtedly, legitimate anonymous Internet posts: persons critical of autocratic or repressive regimes, for example, or legitimate whistleblowers. The defendant is not one of those people. The law will afford his posts all the protection that they deserve, which is to say none.

[15] In the result, Goldstein J. granted judgment against the defendant who was identified only by a user name or pseudonym. There is no discussion in the case report as to whether the lack of [page158] the defendant's actual name was considered to be an impediment to the court's jurisdiction.

[16] The most authoritative pronouncement on the issue of whether judgment in personam can be granted against an unident-ified defendant is the decision of the Supreme Court of the United Kingdom in Cameron v. Liverpool Victoria Insurance Co., [2019] UKSC 6, [2019] RTR 159. The case involved a hit-and-run accident in which the identity of the other driver was not known. The court held that for a plaintiff to claim against unidentified-driver insurance coverage that was available under U.K. law, he first needed to obtain a judgment against the unidentified driver that he could then enforce against the insurer. This raised expressly the issue of whether judgment can be granted against a defendant whose identity is not known.

[17] Like Canada, the bulk of U.K. civil judgments are granted in personam. 1 [DG1] At para. 12 of Cameron, the court identified the issue as follows:

The critical question is what, as a matter of law, is the basis of the court's jurisdiction over parties, and in what (if any) circumstances can jurisdiction be exercised on that basis against persons who cannot be named.

[18] In considering the court's jurisdiction, the Supreme Court fastened on the law's recognition of jurisdiction being obtained over a person by service of process. That is, provided that a case is of the type that the court can hear, the court will generally recognize jurisdiction over those properly notified of the claim by service. Notice of a claim is a minimum requirement for natural justice to be fulfilled. The court distinguished between two categories of defendants: (1) truly unknown defendants who cannot be identified and therefore cannot be notified of the claim (like a hit-and-run driver); and (2) those who may not yet be known but who can be described and with whom communication may be possible in the future.

[19] As to currently unknown but identifiable defendants, the Supreme Court held, at para. 14:

There is no doubt that a claim form may be issued against a named defendant, although it is not yet known where or how or indeed whether he can in practice be served. But the legitimacy of issuing or amending a claim form so as to sue an unnamed defendant can properly be tested by asking whether it is conceptually (not just practically) possible to serve it. The court generally acts in personam. Although an action is completely constituted on the issue of the claim form, for example for the purpose of stopping the running of a limitation [page159] period, the general rule is that "service of originating process is the act by which the defendant is subjected to the court's jurisdiction": Barton v Wright Hassall LLP [2018] UKSC 12, [2018] 3 All ER 487, [2018] 1 WLR 1119, para 8.

[20] The court held that under its rules, a defendant can be served by substituted service where doing so is likely to bring the proceeding to the defendant's attention. Rule 16.04 of Ontario's Rules of Civil Procedure provides:

16.04(1) Where it appears to the court that it is impractical for any reason to effect prompt service of an originating process or any other document required to be served personally or by an alternative to personal service under these rules, the court may make an order for substituted service or, where necessary in the interest of justice, may dispense with service.

[21] While not mentioned expressly in the rule, in granting substituted service Ontario courts too will generally be concerned to ensure that the method of service proposed has "some likelihood of informing a defendant of the proceeding; otherwise, the exercise of obtaining an order for substituted service is a charade": Laframboise v. Woodward (2002), 59 O.R. (3d) 338, [2002] O.J. No. 1590 (S.C.J.), at para. 14. Moreover, in Household Realty v. Winsor, 2002 CarswellOnt 4016, at para. 8, Master Hawkins wrote,

If a legal process is neither likely to reach the defendant nor come to his or her knowledge if service is substituted, as a general rule substituted service should not be ordered.

[22] In Cameron, the Supreme Court found that it is not enough to refer to a defendant by reference to a past act, such as a hit-and-run accident, because the prior act provided no basis to identify the particular person who is the defendant. However, the court concluded that where a form of service is utilized that can reasonably be expected to bring the proceedings to the attention of the defendant, there was no reason in principle to limit the court's ability to grant judgment against the unidentified defendant.

[23] I agree with the reasoning in Cameron and adopt the Supreme Court's framework. Provided that the form of service utilized can reasonably be expected to bring the proceedings to the attention of a specific, identifiable defendant, the court has jurisdiction over that person however he or she may be identified. The test of reasonableness will be influenced by the circumstances of the case. Where, for example, people are hiding behind internet anonymity to make allegedly defamatory comments on a website, service through the website using the coordinates and the identifiers that the users themselves provided to the website operator strikes me as both reasonable and just. If notice does not reach the users, it is because they choose not to access the accounts from which they made their comments or the e-mail addresses [page160] that they provided to the website operator. Where there is evidence that a person is actively evading service, such as by shutting down a previously active e-mail address or website account after learning that an action exists, correspondingly less certainty of service may be required as long as it remains conceptually possible. See, also, Cameron, at para. 25.

[24] In this case, each of the defaulting defendants was served at an e-mail address provided by him or her to Stockhouse.com or through their website private messaging accounts on the Stockhouse.com site. I have no doubt that in authorizing this manner of service, the master implicitly -- if not explicitly -- found that the statement of claim so served would likely come to the defaulting defendants' attention. I agree and find that the service effected under Master Abram's order was reasonably expected to bring the proceedings to the attention of the users who posted on the Theralase Bullboard under the pseudonyms listed in the title of proceedings and accordingly the court has jurisdiction over them in personam.

[25] Therefore, provided that the plaintiffs prove their entitlement to judgments as claimed, judgment can issue against the defendants in the pseudonyms set out in the title of proceedings.

[26] How the plaintiffs will go about amending the title of proceedings for enforcement purposes once they identify one or more of the defendants is not before me. I make no findings about how any judgment is to be enforced against a person who is currently identified only by a pseudonym.

The Merits

[27] Theralase is a pharmaceutical company involved in research and development of photo dynamic compounds and their associated drug formulations for use as cancer fighting agents. Its shares are listed for trading on the TSX Venture Exchange and in the U.S. on the over-the-counter market OTCQB.

[28] The plaintiff Roger Dumoulin-White is a professional engineer by training. He was the founder and the initial president and CEO of Theralase. In 2018, he agreed to step down as an officer as part of a settlement with the Ontario Securities Commission concerning allegations that Theralase had not complied with its obligations to publicly disclose material facts on a timely basis and that it did not have a sufficiently robust compliance function. Mr. Dumoulin-White currently serves as the Director of Business Development of Theralase.

[29] Kristina Hachey is a Certified General Accountant by training and has had a professional career spanning app-roximately 30 years. She has served as the Chief Financial [page161] Officer of Theralase for the last 15 years. She is also the spouse of Mr. Dumoulin-White.

[30] The plaintiffs complain about Internet postings published by Stockhouse.com and the defendants from late 2014 through 2018. I attach to these reasons a copy of Schedule "A" to the statement of claim listing the defamatory postings published by the defendants on the Stockhouse.com Bullboard for Theralase. It also shows the number of times users accessed each posting presumably to read it. The defaulting defendants are deemed to admit that each made the postings attributed to them and that their posts were read the number of times attributed in Schedule "A".

[31] Generalizing for introductory purposes, the postings assert that Theralase management are untruthful and unprofessional, the corporation is operating unlawfully and improperly from the investors' perspectives, and the personal plaintiffs are unprofessional, incompetent managers who have committed criminal acts. Ms. Hachey is also the subject of at least one misogynistic post that is particularly disgusting.

[32] The closest analogue to the facts of this case is the Court of Appeal's decision in Barrick Gold Corp. v. Lopehandia (2004), 71 O.R. (3d) 416, [2004] O.J. No. 2329. In that case the defendant felt aggrieved by the plaintiff's handling of a mining property in Chile. He went on a campaign of libelling the plaintiff in hundreds of posts on numerous websites including investor websites with pages dedicated to the plaintiff's affairs much like Stockhouse.com. The defendant's libellous postings were both more voluminous and more extensive than the postings in this case. He made claims that the plaintiff was guilty of fraud, tax evasion, money laundering, manipulation of world gold prices, obstruction of justice, participating in organized crime, attempted murder, arson, genocide and crimes against humanity. Like this case, the libellous postings prompted inquiries from shareholders, analysists, regulators and potential investors.

[33] In Barrick Gold, the trial judge viewed the defendant's libellous postings as a "diatribe or a rant" and minimized the likelihood of that type of publication having caused serious harm to the plaintiff. He awarded $15,000 in general damages and he declined to award punitive damages.

[34] The Court of Appeal varied the award and granted the plaintiff $75,000 in general damages plus $50,000 in punitive damages. Blair J.A. discussed several aspects of the proper approach to this type of Internet libel in his reasons. He noted, first, the extraordinary capacity for harm represented by Internet communication. Citing Collins, The Law of Defamation and [page162] the Internet (Oxford University Press, 2001), at para. 24.02, Blair J.A. accepted the author's conclusion that ". . . the Internet is also potentially a medium of virtually limitless international defamation".

[35] Blair J.A. explained, at paras. 31 and 32:

In 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. In Dow Jones & Company Inc. v. Gutnick, [2002] HCA 56 (10 December 2002), that same judge -- Kirby J., of the High Court of Australia -- portrayed the Internet in these terms, at para. 80:

The Internet is essentially a decentralized, self-maintained telecommunications network. It is made up of inter-linking small networks from all parts of the world. It is ubiquitous, borderless, global and ambient in its nature. Hence the term "cyberspace". This is a word that recognizes that the interrelationships created by the Internet exist outside conventional geographic boundaries and comprise a single interconnected body of data, potentially amounting to a single body of knowledge. The Internet is accessible in virtually all places on Earth where access can be obtained either by wire connection or by wireless (including satellite) links. Effectively, the only constraint on access to the Internet is possession of the means of securing connection to a tele-communications system and possession of the basic hardware. (emphasis added).

Thus, of the criteria mentioned above, the mode and extent of publication is particularly relevant in the Internet context, and must be considered carefully. Communication via the Internet is instantaneous, seamless, interactive, blunt, borderless and far-reaching. It is also impersonal, and the anonymous nature of such communications may itself create a greater risk that the defamatory remarks are believed: see Vaquero Energy Ltd. v. Weir, 2004 ABQB 68, [2004] A.J. No. 84 (Alta. Q.B.) at para. 17.

(Emphasis in original; notes omitted)

[36] Blair J.A. also accepted and emphasized the risk noted by Lyrissa Barnett Lidsky in "Silencing John Doe: Defamation and Discourse in Cyberspace" (2000), 49 Duke L.J. 855:

The 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".

[37] Blair J.A. found that the informal, ranting style of writing used in internet postings should not be taken to mean that readers will not take the defamatory publications seriously. The evidence that some readers of the defamatory posts communicated with the company to express concerns is evidence that readers do put some faith in what might once have been considered childish or incredible writing styles.

[38] Blair J.A. also emphasized that one needs to consider the potential size of the audience and the nature of the potential impact of the statements. In addition, statements made concerning [page163] the directors, officers and other employees of a corporate plaintiff are relevant to the assessment of damages suffered by the corporation itself. The failure of any defendant to apologize or retract their statements is also relevant. Moreover, the vindication provided by the judgment itself is not a basis to decrease the damages award.

[39] Ultimately the compensatory or general damages for defamation are "at large". That is, there is no formula or legal rule for calculating a proper number. Compensatory damages are to consider the plaintiff's position and standing, the nature of the libel, the mode and extent of the publication, whether there has been an apology and the whole conduct of the defendant. See Hill v. Church of Scientology of Toronto (1995), 24 O.R. (3d) 865, [1995] 2 S.C.R. 1130, [1995] S.C.J. No. 64.

[40] I also need to consider the plaintiffs' claims for aggravated and punitive damages. Aggravated damages are available where the defendant's conduct is found to have been motivated by malice and has been "particularly high-handed or oppressive thereby increasing the plaintiff's humiliation and anxiety". See Hill, at paras. 188 and 189. Punitive damages are available where a defendant is guilty of "'malicious, oppressive and high-handed' misconduct that 'offends the court's sense of decency'": Whiten v. Pilot Insurance Co. (2002), 58 O.R. (3d) 480, [2002] 1 S.C.R. 595, [2002] S.C.J. No. 19, 2002 SCC 18, at para. 36.

[41] As described in the preceding paragraph, it is apparent that there is some potential for overlap between the conditions that can lead to awards of aggravated and punitive damages. The Court of Appeal has recently reminded that before punitive damages may be awarded, it is necessary to assess whether the award of general and aggravated damages "was inadequate to achieve the objectives of retribution, deterrence and condemnation". If the general and, if available, aggravated damages awards already achieve the objectives of a punitive damages award, no further punitive damages are warranted. See Cable Assembly Systems Ltd. v. Barnes, [2019] O.J. No. 6567, 2019 ONCA 1013, at paras. 17 and 18.

[42] In this case, I am assessing the appropriate damages to compensate three plaintiffs for libelous statements made by multiple defendants. It seems to me to be over-compensation to simply pick a precedent quantum like $75,000 (as in Barrick Gold) or $100,000 (as in Mason) and repeat it for each defendant. However, the fact that multiple defendants committed acts of libel should not allow them to benefit by assessing a global harm and then dividing it by their number. The addition of new defendants may add strength to the sting of the libel and thereby have an additive effect on the aggregate damages suffered as [page164] compared to a situation in which only one person made all of the libellous publications. Total damages may therefore be higher in a case with multiple libellers than in a case with just one defendant like Barrick Gold.

[43] In addition, there are multiple plaintiffs in this case. The harm to Theralase's business and efforts to raise money is quite distinct from the harm suffered to the reputations and well-being of Mr. Dumoulin-White and Ms. Hachey. I proceed therefore to assess damages against each of the defendants individually for each plaintiff individually. In each case I will assess whether the plaintiffs or any of them have made out their claims and then the damages suffered by each of them if any. I will also be mindful of the totals but not bound by the total in a case of a single defendant as discussed.

[44] I do note that despite the potential risks for broad pub-lication presented by the Internet generally, the posts in this case were read only a few hundred times at most and often far less. There was no viral growth or exposure to the offending posts before they were removed. Moreover, each defendant made only a small number of posts. None can be said to have been on a quest like the defendants in Barrick Gold or Astley v. Verdun (2013), 118 O.R. (3d) 43, [2013] O.J. No. 4942, 2013 ONSC 6734 (S.C.J.).

Michael Borovec

[45] Mr. Borovec posted four comments in March and April 2018. They were read between 100 and 250 times each. In commenting on the settlement with the OSC, Mr. Borovec labels Mr. Dumoulin-White a "liar", a "sociopath" and "scum". He calls Ms. Hachey a "bi-polar pot-head", a "fraud" and a "fake". He also threatens to continue such posts to teach Mr. Dumoulin "not to screw around with people who are smarter than you are".

[46] The posts are plainly defamatory publications of and concerning all of the plaintiffs. In the absence of a defence, the plaintiffs are entitled to judgment against Mr. Borovec.

[47] I agree with characterization in the plaintiffs' factum:

The false and defamatory content of the posts is severe, includes allegations of criminal conduct by Mr. Dumoulin-White and Ms. Hachey and denigrates their professional reputations.

[48] As a corporation, Theralase cannot suffer hurt feelings. Mr. Dumoulin-White testifies that he believes that the posts have made it more difficult for Theralase to raise funds in public markets. This is a bald assertion, however. There is no objective basis to test this evidence. Has Theralase suffered more difficulties than its financial condition and market position suggest might [page165] otherwise have been the case? If so, might the OSC settlement have contributed to investors' alleged malaise? While I have no doubt that the defamatory statements had potential to have a negative effect on Theralase's market activities, the statements were read by only 250 people. While analysts might have been concerned by them, they had access to the company and its officers to seek any clarifications that they desired. Moreover, if Theralase did encounter some difficulty in obtaining funds as a result of the libellous posts, I also have no evidence of how to quantify the loss, if any, suffered by Theralase as a result.

[49] In my view, considering each plaintiff's position and standing, the nature of the libel, and the mode and extent of the publications, general damages for the four posts of $15,000 in favour of Theralase and $25,000 for each of the personal plaintiffs is appropriate.

[50] Both Mr. Dumoulin-White and Ms. Hachey seek aggravated damages. Mr. Borovec is a disgruntled former employee. His posts lay bare his express malice against the plaintiffs. His threats and the particularly scurrilous nature of his posts have caused extra humiliation and suffering by the human plaintiffs. As such, I assess a further award of $15,000 to each of Mr. Dumoulin-White and Ms. Hachey as aggravated damages. In my view, the aggregate award against Mr. Borovec is ample to express the court's abhorrence of Mr. Borovec's conduct and to thereby achieve the objectives of retribution, deterrence and condemnation. Therefore, no punitive damages are awarded.

The defendant John Doe No. 1 who publishes under the name LAZERR00

[51] This defendant posted two comments in November 2018. They were read 61 and 154 times respectively. They generally denigrated Mr. Dumoulin-White's business acumen. The posts are defamatory publications of and concerning Mr. Dumoulin-White. In the absence of a defence, he is entitled to judgment against this defendant.

[52] This defendant's libels were few in number and relatively light in sting. In my view, an award of general damages of $10,000 in favour of Mr. Dumoulin-White is appropriate compensation.

The defendant John Doe No. 2 who publishes under the Name PENNYOILKING

[53] This defendant posted one comment in May 2017 and five between July and November 2018. The 2017 comment was read 185 times. The others attracted between 30 and 90 readers. The posts overtly attacked Mr. Dumoulin-White and claimed that he [page166] was diluting the company's stock to benefit "cronies". The posts are defamatory publications of and concerning Mr. Dumoulin-White and Theralase. In the absence of a defence, they are entitled to judgment against this defendant.

[54] These posts are particularly pointed and nasty. The defendant accuses Mr. Dumoulin-White of being a "thief" and undermines the company's performance on that basis. In my view, general damages for Mr. Dumoulin-White should be assessed at $35,000. I find the posts exhibit malice and caused Mr. Dumoulin-White to suffer humiliation and distress. Accordingly, aggravated damages of $15,000 are appropriate. Theralase is entitled to general damages against this defendant of $15,000. In my view, the aggregate award against this defendant is ample to express the court's abhorrence of his or her misconduct and to thereby achieve the objectives of retribution, deterrence and condemnation. Therefore, no punitive damages are awarded.

The defendant John Doe No. 3 who publishes under the Name BLUEBOMBER6

[55] This defendant made two posts in June and July 2018 that were read 59 and 123 times respectively. The posts are critical of management and Mr. Dumoulin-White for not proactively pro-moting the scientific achievements of the company in the interests of its investors. The comments veer into name calling and rhetoric including calling management "fukking [sic] morons" and "incompetent". The spelling mistake was apparently deliberately made to avoid the automatic censorship of swear words built into Stockhouse.com's algorithms.

[56] The posts are defamatory publications of and concerning Mr. Dumoulin-White and Theralase. In the absence of a defence, Mr. Dumoulin-White and Theralase are entitled to judgment against this defendant.

[57] This defendant's libels were few in number and relatively light in sting. In my view, the sting is muted by the fact that the offending words are contained in a rationally drafted complaint about management's performance. In my view, an award of general damages of $10,000 in favour of Mr. Dumoulin-White and the same amount in favour of the corporation is appropriate.

The defendant John Doe No. 4 who publishes under the Name BIONICJOE

[58] The defendant posted one publication in May 2018 that was read 133 times. It generally alleged that Mr. Dumoulin-White gave a 20 cents per share "gift" to his friends in the company's most recent financing. The innuendo is that Mr. Dumoulin-White [page167] manipulates the price of the shares to benefit a small group. The post is similar to that of John Doe No. 2 who publishes under the name PENNYOILKING. But there is only one post and it is much more muted in its allegations and tone.

[59] The posts are defamatory publications of and concerning Mr. Dumoulin-White and Theralase. In the absence of a defence, Mr. Dumoulin-White and Theralase are entitled to judgment against this defendant.

[60] This defendant made only one post and its sting is at the lower end. In my view, an award of general damages of $10,000 in favour of Mr. Dumoulin-White and the same amount in favour of the corporation is appropriate.

The defendant John Doe No. 5 who publishes under the Name MACMAN1519

[61] This defendant authored four posts in May and June 2018. They were read between 73 and 140 times. The final post was lengthy and was read by the most people. The defendant complains about management failing to maximize publicity about the positive results of a recent clinical trial of a particular drug. He asserts that management is incompetent and that Mr. Dumoulin-White "lies" and acted "unbelievably unprofessional and illegal[ly]".

[62] The posts are defamatory publications of and concerning Mr. Dumoulin-White and Theralase. In the absence of a defence, Mr. Dumoulin-White and Theralase are entitled to judgment against this defendant. The defendant also called on the board of directors to clean house "especially [Mr. Dumoulin-White] and wife". I am not satisfied that a reasonable person would view this comment as demeaning the professional or personal reputation of Ms. Hachey in any material way.

[63] In my view, general damages for Mr. Dumoulin-White should be assessed at $25,000. I find the posts exhibit malice and caused Mr. Dumoulin-White to suffer humiliation and distress. Accordingly, aggravated damages of $15,000 are appropriate. Theralase is entitled to general damages against this defendant of $15,000.

The defendant John Doe No. 6 who publishes under the Name NASTYNASTA

[64] This poster asked, "How much to fK [Ms. Hachey] 200.00 usd"? The post was read by seven people.

[65] As the pseudonym suggests, this poster was deliberately disgusting and hurtful. The post suggests that Ms. Hachey is sexually available and that having sex with her is somehow a topic [page168] that deals with the investors' complaints about management. Ms. Hachey testifies to having felt threatened and demeaned.

[66] The publication by this defendant is defamatory of and concerning Ms. Hachey. In view of its very limited exposure and outlandish nature, I find it caused her little actual damage to her reputation or professional standing. I award her general damages of $7,500 against this defendant. However, the post exhibits malice and I find that it caused Ms. Hachey to suffer humiliation and distress for which an award of aggravated damages of $10,000 is appropriate. Further, in my view, an award of $17,500 does not express the court's disapproval sufficiently to achieve the goals of retribution, deterrence and condemnation. According, I order this defendant to pay a further $17,500 to Ms. Hachey as punitive damages.

The defendant John Doe No. 7 who publishes under the Name NEED2KNOW68

[67] This defendant published two posts in March 2016 and February 2018 that were read 242 and 156 times respectively. The comments are pointed at the company's performance and, particularly at Mr. Dumoulin-White whom it casts as a recidivist liar. However, the complaints about the company are not in themselves defamatory. I acknowledge that posts regarding management may also damage the corporation. I have implemented that rule above. Here, however, the defendant points to the company's results and its apparent limited cash resources to support its monthly cash burn. To the extent that it points a defamatory finger, it is at Mr. Dumoulin-White rather than anything done or not done by the company.

[68] The posts are defamatory publications of and concerning Mr. Dumoulin-White. In the absence of a defence, Mr. Dumoulin-White is entitled to judgment against this defendant.

[69] In my view, general damages for Mr. Dumoulin-White are fairly assessed at $15,000. I do not find malice or sufficient cause to award aggravated damages for these two posts.

The defendant John Doe No. 8 who publishes under the Name TRUENORTHSTORNG

[70] This defendant published five posts in July through September 2015 that were read between 59 and 238 times. The defendant alleges that the company is operated as a "pump and dump" scheme for the benefit of the promoters.

[71] The posts are defamatory publications of and concerning Theralase. In the absence of a defence, Theralase is entitled to judgment against this defendant. [page169]

[72] These posts were pointedly aimed to warn investors away from investing in Theralase. They were intended to impair the company's ability to raise capital while conducting its research and development activities. A "pump and dump" scheme is illegal. The allegation is serious and designed to be harmful. In my view an award of general damages of $35,000 is appropriate against this defendant in favour of Theralase.

The defendant John Doe No. 9 who publishes under the Name TUESDAYNIGHTRID

[73] This defendant published four posts between February and November 2015 that were read between 150 and 171 times. The general upshot of the comments is that Mr. Dumoulin-White lies about corporate matters, is a fraudster and a used car salesman.

[74] The posts are defamatory publications of and concerning Mr. Dumoulin-White. In the absence of a defence, he is entitled to judgment against this defendant.

[75] In my view, a damages award of $25,000 is appropriate against this defendant. I do not find malice or sufficient cause to award aggravated damages for these posts.

The defendant John Doe No. 10 who publishes under the Name CRAZYTRADER12

[76] This defendant published four posts between November 2014 and April 2015 that were read between 117 and 182 times. The upshot of these posts is that Mr. Dumoulin-White is operating a "pump and dump" scheme profiting friends at the expense of investors. The defendant alleges that the company manipulates the timing of the release of results to allow insiders to short sell or dump shares unlawfully. He calls company officials "crooks" and likens the company to "the oldest con in the book" performed in old-school boiler-room operations.

[77] The posts are defamatory publications of and concerning Mr. Dumoulin-White and Theralase. In the absence of a defence, they are entitled to judgment against this defendant.

[78] Like John Doe No. 8, this defendant seeks to undermine the company's ability to access capital markets. In my view an award of general damages of $35,000 is appropriate against this defendant in favour of Theralase. In my view, general damages for Mr. Dumoulin-White should be assessed at $25,000. I find the posts exhibit malice and caused Mr. Dumoulin-White to suffer humiliation and distress. Accordingly, aggravated damages of $15,000 are appropriate. The aggregate damages fulfill the [page170] purposes of punitive damages in this case. Accordingly, no further award is appropriate.

Summary

[79] While it may seem that the individual damage awards that I have made are not very large in absolute terms, I bear in mind that each defendant made only a handful of comments that were read by a relatively small number of people. On a per comment basis, the awards in this case exceed those in the precedent cases cited above. Moreover, on an aggregate basis, they do as well.

[80] The plaintiffs seek costs of approximately $60,000 on a full indemnity basis. This excludes costs referable solely to Mr. Lanter. In my view, the defaulting defendants' failure to participate in this action makes their conduct all the more abusive. They have caused the plaintiffs to incur substantial sums to ferret out their identities such as they have done and to prove their cases. If people want to make hurtful statements about others and then try to hide from the responsibility to prove the truth or other justification for doing so, then, as discussed by Goldstein J., their cowardice is reprehensible and, in my view, they should bear costs on a substantial indemnity basis. I fix the plaintiffs' cost on a substantial indemnity basis at $55,000, all-inclusive, and order the defaulting defendants jointly and severally to pay that sum to the plaintiffs forthwith.

Motion allowed. [page171]

SCHEDULE "A"

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Notes

1 In this discussion, I am not dealing with in rem judgments declaring title or status.

End of Document