Reasons for Judgment

Court File No.: CV-22-00682698
Date: 2025-03-25
Superior Court of Justice - Ontario

Between:
12563789 Canada Inc., Amanda Mazzotta and Guy Patric Charrier, Plaintiffs, Defendants by Counterclaim
and
Tiki Tours International Corp., Michael Karpishka and Gabriela Hernandez Saucedo, Defendants, Plaintiffs by Counterclaim

Before: Paul B. Schabas

Counsel:
Ruzbeh Hosseini and Salma Kebeich for the Plaintiffs, Defendants by Counterclaim
Joseph W.L. Griffiths for the Defendants, Plaintiffs by Counterclaim

Heard: January 7–9, 2025

Contents

• Overview
• The Issues
• What Agreements, if any, were Reached Between the Parties?
  • The Legal Framework
  • Initial Discussions and the Letter of Intent
  • The Draft Operator Agreement and Meeting in July 2021
  • The Invoice and Delivery of the Boats
  • The Revised Draft Operator Agreement, Discussions and Payments – September and October 2021
  • More Discussion and Disagreements – November 2021
  • The Parties Part Ways – March 2022
  • Findings on Agreements
• Breach of Fiduciary Duty
  • Karpishka’s Conduct May – August 2022
  • Karpishka’s Conduct April – July 2024
  • Findings on Breach of Fiduciary Duty
• Defamation
  • The Defamatory Statements
  • Justification and Fair Comment
  • Malice
  • Qualified Privilege
• Remedies and Damages
  • Ownership of the Boats
  • Damages
• Conclusion

Overview

[1] The plaintiffs, Guy Patric Charrier and Amanda Mazzotta, live together in Wasaga Beach, Ontario. Charrier and Mazzotta were interested in starting a business renting boats on which visitors to the beach could relax, have drinks and eat. In 2020 they had attempted to start a business called “Bar-B-Q Boats”, using their corporation, the plaintiff 12563789 Canada Inc. (“125”), but were unable to get the necessary licences and permits.

[2] In March 2021, Charrier found information on the internet about a business in Ottawa that marketed “Tiki” boats, the defendant Tiki Tours International Inc. (“TTI”). Tiki boats are essentially flat boats on aluminum pontoons with a bar, enclosed toilet and a straw roof that move slowly on the water and can hold a dozen or so people.

[3] Charrier contacted TTI right away and a Zoom call was held later that day which included Charrier and Mazzotta (with 125, the “plaintiffs”) and TTI’s principals, Michael Karpishka and his spouse Gabriela Saucedo (collectively, the “defendants”).

[4] TTI’s business was also in the early stages. Karpishka was familiar with Tiki boats and wanted to develop a business offering them for rent to tourists visiting Ottawa. The couples saw advantages working with one another. The defendants had more experience and knowledge of how to obtain boats and get the business up and running than Charrier and Mazzotta. The defendants saw an opportunity to sell boats and provide marketing and other services to the plaintiffs, from which they could profit.

[5] Over the next several months, the parties entered into a Letter of Intent (“LOI”), and drafted, reviewed and revised a draft Operator Agreement. A lengthy meeting was held between them in Wasaga Beach in early July 2021. The defendants sourced boats, or partially completed boats, two of which were delivered to the plaintiffs in Wasaga later in July. There was frequent and sometimes heated discussion about the nature of the relationship.

[6] Between July and October 2021, the plaintiffs paid the defendants over $200,000 based on an Invoice that the defendants had sent to the plaintiffs for the two boats that had been delivered to them. In October the defendants reimbursed about $100,000 to the plaintiffs largely arising from expenses the plaintiffs had incurred completing the construction of the two Tiki boats.

[7] Although drafted and reviewed by the parties, no Operator Agreement was ever executed. In March 2022 the plaintiffs announced they did not want to continue pursuing a business relationship with the defendants. The defendants, acting pursuant to the unexecuted Operator Agreement, sent the plaintiffs a notice of termination, and requested return of the boats. The plaintiffs refused. Litigation ensued.

[8] The defendants tried to prevent the plaintiffs from using the boats during the summer of 2022. Although the boats had been registered with Transport Canada in August 2021 as being jointly owned by the plaintiff company 125 and TTI, in May 2022, TTI unilaterally changed the ownership registration to it alone and accused the plaintiffs of operating illegally on social media. After the plaintiffs learned of this, Transport Canada reversed the change, which allowed the plaintiffs to operate the boats.

[9] In August 2022, the defendants sought an injunction restraining the plaintiffs from using the boats. Following a flurry of litigation activity, on October 19, 2022, Koehnen J. dismissed the motion. He found that the plaintiffs had “effectively paid the defendants in full for the boats and operated them during the last tourist season.” He held that the plaintiffs should not be deprived of the use of the boats due to “speculative safety concerns” put forward by the defendants. This allowed the plaintiffs to continue to use the boats and operate their business in 2023 and 2024 while this lawsuit continued.

[10] In 2024, the defendants again took unilateral steps, without notifying the plaintiffs, to change the registration of the boats by causing TTI to be removed as the “authorized representative”, which caused Transport Canada to cancel the registration. After the plaintiffs were made aware of this, they were forced to shut down their business on June 7, 2024, and were required to bring a court application to restore their right to use the boats. On July 17, 2024, Parghi J. ordered, on consent, that Charrier be the interim authorized representative and the use of the boats was restored.

[11] The trial in this matter was held on January 7, 8 and 9, 2025. The parties’ evidence in chief was presented by affidavit and cross-examinations were conducted before me. The witnesses were Charrier, Mazzotta, Karpishka and Saucedo.

[12] In these reasons I frequently refer simply to the “plaintiffs” and the “defendants.” The corporations are both closely held by the two couples. Mazzotta and Charrier spoke for each other and their company, 125, at the time and at the trial. This was also the case with Karpishka and Saucedo and their company, TTI.

[13] The plaintiffs argue that the only agreement that was ever entered into between the parties was the purchase of the boats, as evidenced by the Invoice issued by the defendants. Accordingly, they seek a declaration that the plaintiffs own the boats and related relief to give effect to that ownership.

[14] The plaintiffs say they never reached agreement on the draft Operator Agreement or any other form of joint venture. Alternatively, the plaintiffs say that if there was an agreement, it was a franchise agreement which should be rescinded for failure by the defendants to provide adequate disclosure.

[15] The plaintiffs also seek damages for defamation and breach of fiduciary duty arising from the defendants’ conduct in 2022 and 2024, conduct they say caused them damage and for which the defendants should be sanctioned with punitive damages.

[16] The defendants submit that although the Operator Agreement was never executed, the terms were agreed upon, the parties acted on it, and it should be found to be binding on the plaintiffs. The defendants submit that the plaintiffs were not owners of the boats, but lessees.

[17] The defendants submit that the plaintiffs wrongly terminated the Operator Agreement and argue that the appropriate relief is to liquidate the boats and have the plaintiffs account to the defendants in order to provide them with a share of the profits of the plaintiffs’ business.

[18] For the reasons that follow, I find for the plaintiffs.

[19] In my view, the parties did not reach a final agreement on a joint venture. Although the parties worked together to a limited extent during 2021, no joint venture was ever finalized. Essential terms were never agreed upon and remained outstanding when the parties parted ways in early 2022.

[20] The only clear contract between the parties was the sale of the boats by the defendants to the plaintiffs. The defendants issued an Invoice for the boats, and the plaintiffs paid it. However, as the plaintiffs had to complete the construction of the boats, the defendants reimbursed the plaintiffs for those additional costs. The plaintiffs have used them as their own for the past three and a half years.

[21] There was discussion of leasing the boats, but those arrangements were part of the potential joint venture agreement which was never finalized. Further, although the boats were registered by the defendants with Transport Canada as having shared ownership between the two corporate parties, the plaintiffs always believed they were the owners, having paid for them. Further, when the relationship was breaking down, communication from the defendants contemplated buying back the boats as part of a severance of ties. Accordingly, I conclude that the plaintiffs are the sole owners of the boats.

[22] I also find that the defendants defamed the plaintiffs in 2022 and acted in breach of their fiduciary duty to the plaintiffs in 2024 in cancelling the registration for the boats, for which the plaintiffs are entitled to damages including punitive damages.

The Issues

[23] I address the following issues:

(a) what agreements, if any, were reached between the parties;
(b) whether the defendants breached a fiduciary duty to the plaintiffs;
(c) whether the defendants defamed the plaintiffs; and
(d) remedies and damages.

What Agreements, if any, were Reached Between the Parties?

The Legal Framework

[24] In law, an agreement is reached when both parties have the intention to enter into a binding contract and there is agreement on all of the essential terms of the contract.

[25] In Bawitko Investments Ltd. v. Kernels Popcorn Ltd., Robins J.A. stated, at pp. 12-13, that it is only when parties “agree on all of the essential provisions to be incorporated in a formal document with the intention that their agreement shall thereupon become binding, they will have fulfilled all the requisites for the formation of a contract.”

[26] In circumstances where there is an agreement to agree and essential terms have not been agreed upon, “or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract; or the understanding or intention of the parties, even if there is no uncertainty as to the terms of their agreement, is that their legal obligations are to be deferred until a formal contract has been approved and executed”, an agreement to agree is not enforceable and a “preliminary agreement cannot constitute an enforceable contract.” This statement of the law was confirmed by the Court of Appeal in Alkin Corporation v. 3D Imaging Partners Inc., 2020 ONCA 441, paras. 9-11.

[27] The test for intention is objective. As put by Penny J. in Stronach v. Stronach, 2023 ONSC 3817 at para. 9, “[w]hat is relevant is whether, in the eyes of a hypothetical honest, sensible businessperson, the parties appeared to have reached an agreement.”

[28] In this case, based on my review of the history of the relationship set out below, I am unable to conclude that there was a binding agreement to a joint venture between the parties.

Initial Discussions and the Letter of Intent

[29] When the plaintiffs first contacted the defendants on March 16, 2021, they were looking to buy boats; however, the discussion turned into the possibility of a joint venture. Six weeks later, on April 29, 2021, the parties drafted a Letter of Intent regarding a potential joint venture. It is common ground that the LOI was non-binding and that it expired in accordance with its terms after 60 days, or by June 29, 2021.

[30] The LOI left many terms to be addressed, stating that “the definitive structure [of the joint venture], operating agreement and closing documents are to be negotiated.” With respect to equity ownership, the LOI stated the following:

The structure of the Joint Venture is still to be finalized but the equity ownership in the Subject Tiki Tours will be as follows:

(i) 1 boat = 60% equity ownership for the Interested Party;
(ii) 2 boats = 70% equity ownership for the Interested Party; or
(iii) 3 boats = 80% equity ownership for the Interested Party.

[31] Mazzotta and Charrier understood the reference to percentages of equity interests referred to in the LOI to be with respect to the proposed joint venture, not the boats. The LOI contemplated paying the defendants a percentage of net revenue for the use of their brand, but Mazzotta testified that it was always her understanding that the plaintiffs would own and operate the boats exclusively.

[32] The LOI also contemplated the defendants sending the plaintiffs a “Diligence Package” containing a business plan, operating agreement and proposed ownership structure within 10 days; however, this did not happen.

[33] Two days after signing the LOI, on May 1, 2021, the defendants issued an Invoice to the plaintiffs for the sale of two Tiki boats for $226,000 ($200,000 plus HST). The Invoice referred to a “Complete Tiki Boat Package.” The amount differed from the LOI, which stated that the anticipated capital investment required from the plaintiffs was a minimum of $175,000 which “includes the cost of Two Tiki Boats and Working Capital.” At the time the Invoice was sent, no boats were available; the defendants were awaiting their construction and availability from a builder. The Invoice was sent at that time to assist the plaintiffs in obtaining financing from their bank. The wording of the Invoice was amended later to assist the plaintiffs.

[34] According to Mazzotta, the parties had many meetings via Zoom after the LOI was signed in which the defendants repeatedly said that the boats were being sold to the plaintiffs. The expectation was that they were to be assembled by the defendants and delivered to the plaintiffs by July 1, 2021, in time for the summer season.

[35] In anticipation of the delivery of the boats, the plaintiffs leased facilities and invested in docks at Wasaga Beach. Both parties were busy starting up their businesses, acquiring rights to domain names for websites, preparing marketing materials and operating manuals, obtaining business licences and insurance, among other things. The parties shared some of this with each other. The plaintiffs began marketing the business, expecting to be able to rent out the boats to customers later that summer. They received many bookings and deposits.

The Draft Operator Agreement and Meeting in July 2021

[36] The defendants forwarded a draft Operator Agreement to the plaintiffs on June 27, 2021. This draft agreement had been prepared by the defendants. It contemplated a number of related agreements which were to be schedules to the Operator Agreement, but none of those schedules were attached.

[37] The draft Operator Agreement contemplated TTI leasing the boats to the plaintiffs and, among other things, that the plaintiffs would pay the defendants to become an affiliate of TTI. In the event of termination, the boats were to be returned to TTI.

[38] Mazzotta’s evidence was that she was shocked by the draft agreement as, among other things, it contemplated that the boats would be owned by TTI and that the plaintiffs would have to pay an additional fee of $100,000. She observed that there was nothing in the agreement that was consistent with the relationship being a partnership or what she “understood a partnership to be.”

[39] On June 30, 2021, in a Facebook message to the defendants (which was how the parties communicated with one another at the time), Charrier responded to the draft Operator Agreement as follows: “I did look at the paperwork and this is not what we were expecting, I hope we will chat about this…not even close to what we were agree when we start this.” Charrier continued: “My understanding was about owning this boat not leasing them…and what about the 30% or 20% after we purchase the boat…not too sure what it is now… you own the boat and collect 30%?”[^1]

[40] Karpishka responded within minutes saying: “We don’t own the boats…Like we said we will chat and explain.” He went on, however, to say that “the vessels are registered differently.”

[41] The parties arranged to meet in Wasaga Beach on July 10, 2021, to discuss their business relationship. Saucedo prepared an Agenda for the meeting and drafted Minutes afterwards. Many things were discussed, and at least some sections of the Operator Agreement were reviewed, but many issues were left unresolved. For example, three options for ownership of the boats were raised but no agreement is reflected in the Minutes. Despite the wording of the Operator Agreement, the Minutes repeatedly refer to the “partnership” of the parties. At the end of the Minutes, the following was written: “Review Document WHO PAYS WHAT – we didn’t go through this review together. Pending to agree for next meeting.”

[42] The plaintiffs were asked to confirm receipt of the Minutes and “review the document for accuracy”, which they did, identifying some typographical errors. However, this does not mean there was an agreement, as the Minutes themselves do not reflect an agreement, or even an agreement to agree. Accordingly, many essential terms of an agreement to do business together in some sort of joint venture remained unresolved.

[43] Nevertheless, the relationship between the parties improved following the meeting and they continued to work towards some kind of joint venture arrangement in which the defendants would provide marketing and administrative support to the plaintiffs.

The Invoice and Delivery of the Boats

[44] According to the Minutes, TTI had ordered four boats which were almost complete, two of which would be delivered to the plaintiffs in Wasaga Beach, and the other two to Ottawa for TTI’s use. However, the boats would need to be completed following delivery, including the installation of flooring, engines, and the “Tiki Structure”, among other things.

[45] The Minutes referred to an initial cost of $80,000 per boat, and the defendants requested a minimum payment from the plaintiffs of $35,000, which Mazzotta agreed to send to the defendants as soon as possible.

[46] On July 13, 2021, the plaintiffs paid the defendants $30,000. Shortly after receipt of these funds, at the request of the plaintiffs to assist them with their financing, the defendants sent the plaintiffs a revised version of the May 1, 2021 Invoice. Revisions from the original Invoice included a shipping fee of $1,200 and details of the “Complete Tiki Boat Package”, listing items to be included, such as the pontoon bases, flooring, structural and bamboo framing, thatched roof and full bathroom installation. The Invoice totalled $227,356.00, including HST, but also showed the payment of $30,000, leaving $197,356.00 owing.

[47] The pontoons were delivered to the plaintiffs on or about July 22, 2021, but the plaintiffs were told by the defendants that the builder could not come to Wasaga Beach at that time to complete the Tiki structures. As a result, Mazzotta and Charrier did the work themselves, laying the flooring, and installing the frames, roof, bar, and toilets, among other things, incurring expenses of $19,745.21. They also bought engines for the boats locally, paying $25,323.00 for them.

[48] Due to the delays in receiving the boats and the work needed to complete them, the plaintiffs had to cancel the bookings made that summer and refund all deposits received from customers.

[49] Karpishka took care of registering the boats with Transport Canada. The registration issued by Transport Canada listed both TTI and 125 as owners of the boats, and listed TTI as the authorized representative.

[50] Mazzotta’s evidence, which I accept, was that the plaintiffs relied on the defendants to handle the registration and that they relied on Karpishka’s representation that the registration had nothing to do with ownership. Following the July meeting, the parties were discussing a potential leasing arrangement for the boats which would explain why both companies were listed as owners at that time.

The Revised Draft Operator Agreement, Discussions and Payments – September and October 2021

[51] The defendants sent the plaintiffs a revised version of the Operator Agreement on August 26, 2021. This version was, as Karpishka stated in a message when he sent it, “pretty much what we had last time” but with comments and some schedules added. The comments were not yet incorporated in the wording of the agreement. This included a suggestion that the boats be owned jointly, but there was also a reference to a lease agreement which was attached as a Schedule which provided that boats would be the “exclusive property” of TTI. Charrier’s initial responses were to wonder if Karpishka had sent the wrong document, noting “this is a lease and nowhere I saw the amendment we discuss here", presumably referring to the discussion in July at Wasaga Beach.

[52] On August 29, 2021, Karpishka followed up asking if the plaintiffs had looked at the agreement. On August 30, Charrier wrote that “we review the paperwork and it is good to go like this with modification.” Karpishka then said he would send it to the lawyer.

[53] The parties did not exchange further messages about the draft agreement until September 3, 2021, when concerns arose that the Tiki boats would be too tall to go under a bridge at Wasaga Beach. Charrier complained to the defendants that they got “in this mess because of the lack of planning.” Angry messages were exchanged, including threats to end the relationship by Saucedo: “Business wise we are done”, she said. Mazzotta complained that they had been “asking for a contract and a timeline for months.” She said they did not want to cancel but wanted a “timeline and a contract.”

[54] In my view, the parties had not reached an agreement at this time either. While they were getting closer on August 29, 2021, there is no clarity on what “modification” was to be made to the Operator Agreement, and the draft documents were themselves inconsistent on the ownership of the boats. On September 3, 2021, the defendants felt they could walk away, and the plaintiffs were still asking for a contract. The parties were arguing about money, complaining about timelines, and, as Mazzotta said, they “needed the contract so that we could all be on the same page and avoid these arguments.”

[55] The parties kept communicating through September and into October, addressing other issues, such as insurance and the build out of the boats, including addressing the height problem and the changes that needed to be made so the boats could go under the bridge. Indeed, in September, in response to a further demand from the defendants, the plaintiffs forwarded three payments to the defendants totalling $47,000.

[56] On October 4, 2021, Karpishka said he would send a “final version” of the Operator Agreement which the plaintiffs said they would then provide to their lawyer.

[57] On October 6, 2021, immediately after obtaining financing from the bank, the plaintiffs paid the balance owing on the Invoice for the boats of $197,356.00. As the plaintiffs had by then incurred costs totalling $319,454.51,[^2] which was approximately $90,000 more than the Invoice for $227,356.00, it was agreed that the plaintiffs would provide an accounting of their costs and a breakdown of financing, and that the defendants would “reimburse” the plaintiffs $100,000. This in fact happened in October as the defendants made four payments of $25,000 to the plaintiffs that month. All of this took place in the absence of any agreement on a joint venture involving a lease or co-ownership of the boats. This is consistent with the plaintiffs’ position that they bought the boats.

[58] On October 6, 2021, Mazzotta requested the contract and Karpishka said he would “send later this morning.” But no further draft of the Operator Agreement was ever sent by the defendants to the plaintiffs.

More Discussion and Disagreements – November 2021

[59] The parties continued to communicate about their businesses, the boats, and about money and who had paid for what. On November 18, 2021, Charrier raised the continuing lack of a contract, saying “actually with no contract…you guys just sale a boat to us…so in order to go forward we need a contract clean and clear and approved by all.” This supports the plaintiffs’ understanding that they had bought the boats.

[60] Karpishka responded, saying: “That’s fine Guy. I’ll take the website down and we wait until the contract is signed. We will send an invoice for the balance of the boats until the contact [contract] for all done.” It is not clear what balance was owing, but this too supports the conclusion that the boats had been sold. However, Karpishka continued:

In all honesty we have the lawyer going through the contract again at our cost because YOU modified our boats without OUR permission and we want to make 100% sure that will never happen again. So we are now waiting on the lawyer to finalize things…Bill even stated that the warranty would be void. So now we have to address that issue. We also need to have clauses in place in who will pay for repairs and damage due to water leaks.

[61] There was more messaging back and forth that day between Karpishka and Charrier, including Charrier saying: “No contract no business.” Karpishka responded, stating:

And you’re asking why the contract is taking so long and I gave you a straight up answer you modified the boats without permission and we wanna make sure things like this do not happen in the future again a lesson learned on our side so if you can’t be patient and you don’t want to move forward until everything is done we will respect that so we’ll chat once the contract is done.

[62] As Karpishka’s email suggested, and which he made explicit in another message, the contract was not just to be a contract with the plaintiffs, but a contract to apply to all of the defendant’s “future partners.” The following day, November 19, 2021, Karpishka confirmed the contract was not in place and the parties were at a “standstill.” He noted that “the website and this business is ours” and raised the need for a “serious conversation” including whether to “buy the boats back and just move forward in a different direction.”

[63] In my view, these messages and others from Karpishka support the conclusion that no agreement on a joint venture had been reached, but that the parties understood that the boats had been sold and belonged to the plaintiffs. While a different arrangement might have been reached if the parties had agreed on the terms of a business joint venture, as that did not happen, the plaintiffs owned the boats.

[64] There was further communication between the parties in December 2021 and January 2022, but no revised agreement was provided by the defendants.

The Parties Part Ways – March 2022

[65] On March 10, 2022, the plaintiffs sent an email to the defendants telling them that they were “discontinuing the relationship with Tiki Tours International.” This was followed by a letter from the plaintiffs’ lawyer on March 13, 2022 confirming that the plaintiffs would “no longer be pursuing a joint venture, license or franchise agreement with TTI.” Among other reasons for the termination of the relationship was the provision in the draft Operator Agreement which made the plaintiffs “licensees of the boats from which they intended to operate their business, rather than their true owners.”

[66] On March 21, 2022, TTI responded in writing with a letter titled “Notice of Termination.” This letter, addressed to Charrier and Mazzotta, stated that they were “being noted in default of the operator’s agreement between 12564789 Canada Inc. dba Wasaga Tiki Tours and Tiki Tours International.” As the defendants had learned that the plaintiffs were moving ahead with their own independent business, called “Shaka Wasaga”, the defendants demanded the plaintiffs cease this new business. On April 4, 2022, TTI sent a termination notice “of our business relationship as contained in the operational agreement and boat lease.”

Findings on Agreements

[67] In my view, while the parties certainly intended, at times, to enter into a joint venture agreement of some kind, and to some extent may have agreed to agree – such as in the LOI and following the meeting in July 2021 – there was always uncertainty over the terms of their proposed joint venture, and they did not ultimately reach a binding agreement to do business together. The Operator Agreement was never signed, and several parts of it were never revised from the first draft. The plaintiffs were clear that there had to be a finalized signed agreement. As late as November 2021, the defendants themselves were identifying areas that needed to be changed.

[68] I am unable to conclude, based on the Minutes of the July meeting, or the limited comments on the suggested changes in August 2021, that there was a meeting of the minds of the parties on essential terms. The proposal that the boats would end up being leased was never agreed to by the plaintiffs. How the defendants were to be paid for their role in the plaintiffs’ business was never agreed upon or finalized. These are examples of essential terms which were not resolved.

[69] In the absence of an agreement to the contrary, however, I find that the boats were purchased by the plaintiffs and that they should be declared the sole owners. The Invoice in its original form and as revised later by the defendants, describes a sale. It was the plaintiffs’ view that they had bought the boats and, while there was discussion about a different leasing arrangement in the context of reaching the Operator Agreement, that was never concluded.

[70] On June 30, 2021, Karpishka told the plaintiffs that “we don’t own the boats” but that they would be “registered differently.” Although he named 125 and TTI as co-owners of the boats when he registered them with Transport Canada, at that time the parties were still contemplating a joint venture and the defendants, as Karpishka said, were protecting their ability to control their business down the road.

[71] On October 6, 2021, the plaintiffs paid the precise amount owing on the Invoice for the boats. The money paid back by the defendants for the work and expenses the plaintiffs incurred to complete the boats – which had been included in the price – was described as a reimbursement in the parties’ correspondence at the time. The plaintiffs’ unilateral work on completing the boats is consistent with their view that they owned them. The plaintiffs obtained liability insurance for the boats in October 2021, and took their own steps to get a liquor license and other regulatory approvals in early 2022. While TTI was listed as a co-owner, this was due to the need to be consistent with the ownership registered with Transport Canada; it does not change the fact that 125 was the actual owner.

[72] When the relationship was faltering in the fall of 2021, Charrier confirmed his view that, “with no contract…you guys just sale a boat to us”. Later, when Karpishka noted that they were at a standstill, he suggested the defendants could “buy the boats back.” This is evidence that both parties regarded the boats as having been sold to the plaintiffs.

[73] I find, therefore, that the boats were sold by the defendants to the plaintiffs and that 125 is the owner of the boats.

Breach of Fiduciary Duty

[74] The plaintiffs’ claim for breach of fiduciary duty arises from the conduct of the defendants in 2022 and 2024 relating to the registration of the boats with Transport Canada.

[75] When Karpishka registered the boats with Transport Canada in August 2021, he listed TTI as the “authorized representative” which, pursuant to s. 14(1) of the Canada Shipping Act, 2001, made TTI responsible “for acting with respect to all matters relating to the vessel that are not otherwise assigned by this Act to any other person.” As I have reviewed, although Karpishka listed both 125 and TTI as co-owners, he had previously confirmed to the plaintiffs that “we don’t own the boats” but that “the vessels are registered differently.” Although at the time of registering the boat Karpishka asserted that they were “joint owners”, this was when the parties were continuing to negotiate the Operator Agreement which might have led to a different arrangement. As Karpishka said, telling Transport Canada that 125 and TTI were both owners, “protects us both.” It did not, however, mean that TTI was a co-owner, as I have found above, and nor, as I find below, did it permit the defendants to take unilateral steps with Transport Canada to change the registration.

Karpishka’s Conduct May – August 2022

[76] After the parties terminated their relationship, without notice to the plaintiffs Karpishka took steps in early May 2022 to change the registration with Transport Canada to list only TTI as the owner of the boats. This change was effected on May 18, 2022. The defendants did not notify the plaintiffs of this change; instead, on May 19 and 20, the defendants embarked on a social media campaign accusing the plaintiffs of, among other things, having “stolen” their boats and of operating them illegally. I address those social media posts below when dealing with the claim for defamation.

[77] The plaintiffs learned of the change of registration of ownership in May 2022 and had their lawyers write to Transport Canada on May 24, 2022 that 125 had not consented to the transfer. On June 2, 2022, Transport Canada responded, advising that “a mistake was made because evidence in support of the transfer of ownership of both vessels was not sufficient.” The registration was revised to again list both parties as owners. The plaintiffs requested a copy of the file from Transport Canada, which would not release it without the consent of TTI.

[78] This action was commenced by the plaintiffs on June 15, 2022 seeking, among other things, a declaration that they owned the boats.

[79] On August 4, 2022, the defendants responded, bringing a motion for an injunction seeking to have the boats stored pending the determination of ownership. On October 19, 2022, Koehnen J. dismissed the motion, observing that the plaintiffs had “effectively paid the defendants in full for the boats and operated them during the last tourist season.” He found that the plaintiffs should not be deprived of the use of the boats due to “speculative safety concerns” put forward by the defendants. On consent, Koehnen J. ordered that there be no change of ownership to the boats until trial.

Karpishka’s Conduct April – July 2024

[80] In 2024, Karpishka took further unilateral steps to prevent the use of the boats by the plaintiffs. On April 22, 2024, again without informing the plaintiffs, Karpishka wrote to Transport Canada asking for himself and/or TTI to be removed as the authorized representative for the two boats. Although TTI was listed as the authorized representative, Karpishka referred to himself as the authorized representative. He stated that he was unable to ensure that the vessels were operating in compliance with the regulations. Karpishka did not copy the plaintiffs on this letter, nor did he take any steps to investigate whether the boats were being operated in compliance, or not, with Transport Canada regulations.

[81] Karpishka’s motive in writing this letter was to cause Transport Canada to shut down the plaintiffs’ business. As he stated in the final paragraph of his letter to Transport Canada, purporting to speak on behalf of the plaintiffs:

We [both owners] will jointly assume the responsibility of selecting a new authorized representative at the conclusion of a legal dispute. It is also understood that until such time that a new representative is appointed that the vessels are not allowed to be in operation. If possible, please advise both corporations of the laws and consequences of operating without an Authorized Representative so that they have it in their records.

[82] After being informed by Transport Canada that both owners must agree to any change in the authorized representative, Karpishka spoke to Krista Kendall, Chief Registrar, Vessel Registry at Transport Canada. He then sent an email to Ms. Kendall on May 1, 2022, referring to the “ongoing legal dispute” and asserted that neither he nor his company could “fulfill the obligations” of an authorized representative. Karpishka stated that “the appointment of a representative will likely remain elusive until the matter is adjudicated by the court.” Despite Justice Koehnen’s Order, which Karpishka did not include in his correspondence, Karpishka ended his email to Transport Canada with the following:

I propose that the vessels remain out of service until such time as the legal dispute is conclusively resolved. This precautionary measure aims to safeguard against any further complications that may arise from the unresolved legal matters.

[83] Ms. Kendall responded to Karpishka the following day, May 2, 2024, refusing to change the authorized representative without consent of both owners listed on the registration. She noted that there was no basis to suspend or cancel the registration of the boats.

[84] Undeterred, Karpishka wrote back a few hours later, citing s. 58(1) of the CSA, which states that the authorized representative must notify the Chief Registrar if a vessel is “removed from service.” Karpishka then stated: “I am not comfortable having the vessels in service whilst being prohibited from performing my duties.” Ms. Kendall responded by email on June 6, 2024. She interpreted Karpishka’s statement to be notice under s. 58(1)(a) that “both vessels have been removed from service” and advised Karpishka that the registration of both boats had therefore been cancelled.

[85] Karpishka did not inform the plaintiffs of any of this correspondence with Transport Canada, or of the cancellation of the registration of the boats. Nor did he respond to Ms. Kendall’s email to correct her statement that the vessels “have been removed from service.”

[86] Ms. Kendall followed up with Karpishka on June 11, 2024 to confirm the vessels had been removed from service. Again, rather than correcting her, Karpishka responded the following day asserting that “as the authorized representative representing the joint owners, I have ensured that all necessary procedures have been followed in accordance with Transport Canada regulations.” He also asserted that the boats “had been removed from service and will remain out of service until further notice.” He said that he would be “visiting Wasaga next week to ensure that the vessels have been removed out of the water.”

[87] Ms. Kendall’s email of June 11, 2024 was likely provoked by inquiries from the plaintiffs, who had learned from their insurer on June 7, 2024 that the vessels were no longer registered with Transport Canada. Mazzotta called Transport Canada immediately and was told that an application respecting the boats was pending. Mazzotta then sent an email to Transport Canada referring to the “court order that there are to be no changes to our vessels” pending the outcome of the lawsuit.

[88] Mazzotta’s email came to Ms. Kendall’s attention, as on June 10, 2024 she responded to the plaintiffs asking for a copy of the court order. The plaintiffs promptly sent her the Order of Koehnen J. of October 19, 2022.

[89] Ms. Kendall then called the plaintiffs and told them that, as the authorized representative, TTI “has the authority to have the Vessels removed from service.” As the Transport Canada file notes, the plaintiffs informed Transport Canada that the boats had not been removed from service and were in the water ready to be operated. Nevertheless, on June 12, 2024, Karpishka again asserted to Transport Canada that the vessels “had been removed from service.”

[90] On June 13, 2024, Ms. Kendall sent an email to both parties confirming that registration of both vessels was cancelled on June 6, 2024. However, she noted that the cancellation had occurred prior to Transport Canada being provided with the Order of Koehnen J. Ms. Kendall questioned whether the cancellation was “consistent with the spirit of the decision” which “seems to indicate that the operation of the vessels by 12563789 Canada should not be restrained.” Ms. Kendall requested the owners to advise Transport Canada whether this was the case, and stated that Transport Canada would comply with a further court order.

[91] Karpishka responded the same day with a long letter, doubling down on his earlier assertion that “both vessels had been removed from service.” He then made various legal assertions over several pages including complaining that the plaintiffs were operating the boats without the consent of TTI.

[92] On June 20, 2024, Ms. Kendall wrote to the parties that, in the absence of agreement between them, Transport Canada would do nothing further without a court order.

[93] As a result, the plaintiffs were forced to cease operations, just as the tourist season was starting. The plaintiffs then brought an urgent motion which came before Parghi J. on July 15, 2024. The motion was adjourned on consent to July 17, 2024, at which time the court ordered, on consent, that Charrier be the interim authorized representative, that the parties were to cooperate to have the registration of the boats reinstated as soon as possible, and that the boats could resume operation.

[94] Karpishka swore an affidavit on the motion in which he stated that he had received a call from Transport Canada in mid-April requesting to carry out a safety and compliance inspection of the boats. He stated that he informed Transport Canada that he did not have control over the vessels, which then informed him that he must report this fact to Transport Canada. Karpishka stated that this was the reason for his letter of April 22, 2024. However, Karpishka made no reference to the proposed inspection in his letter or in any of the other correspondence. Further, in an email to Charrier on November 28, 2024, Transport Canada confirmed that it had not selected the boats for inspection at any time in 2023 or 2024.

Findings on Breach of Fiduciary Duty

[95] In my view, despite the ongoing lawsuit, the defendants owed a fiduciary duty to the plaintiffs arising from TTI’s role as the authorized representative.

[96] As the Supreme Court has repeatedly stated,[^3] fiduciary obligations arise when three factors are present:

1. The fiduciary has scope for the exercise of some discretion or power.
2. The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests.
3. The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.

[97] Fiduciary duties can arise ad hoc where the vulnerable party has “an identifiable legal or vital practical interest that is at stake.” In such cases, “the claimant must show, in addition to the vulnerability arising from the relationship as described by Wilson J. in Frame: (1) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries; (2) a defined person or class of persons vulnerable to a fiduciary’s control (the beneficiary or beneficiaries); and (3) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control”: Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, paras. 35-36.

[98] The defendants were in a fiduciary relationship with the plaintiffs due to the registration of the vessels with Transport Canada. Having placed TTI in the position of authorized representative on behalf of both TTI and 125, and not having sought to be removed from that role in 2022, TTI was obliged to act in the best interests of the parties jointly until the litigation was resolved. Indeed, at times in his correspondence to Transport Canada in 2024, Karpishka purports to speak on behalf of 125, although in doing so he was clearly acting contrary to 125’s interests. The plaintiffs were in a position of vulnerability with respect to an identifiable property interest in the boats; they were entitled to expect that the defendants would act in good faith and in accordance with the Order of Koehnen J. to preserve the status quo until the trial, and not take unilateral steps to the detriment of the plaintiffs.

[99] I reject Karpishka’s claim that he was contacted in April by Transport Canada about an inspection. Transport Canada said this did not happen, nor did Karpishka refer to such an inquiry in his letter of April 22, 2024. Further, had he been contacted, he ought to have contacted the plaintiffs to facilitate the inspection. Instead, he told Transport Canada that the parties “will jointly assume the responsibility of selecting a new authorized representative at the conclusion of a legal dispute”, and failed to disclose the Order of Koehnen J. Consistent with his objective of harming the plaintiffs, he sought confirmation that, in the meantime, “the vessels are not allowed to be in operation”, in clear conflict with Koehnen J.’s Order.

[100] Karpishka’s email of May 1, 2024 is even blunter, making vague reference to the “ongoing legal dispute” and proposing “that the vessels remain out of service until such time as the legal dispute is conclusively resolved.” This was an end-run around Koehnen J.’s Order.

[101] When Ms. Kendall said the registration of the vessels was cancelled because she understood they were “out of service”, Karpishka took no steps to correct her, and when Ms. Kendall followed up he asserted, without any basis, that the boats “had been removed from service and will remain out of service until further notice.”

[102] Karpishka’s communications with Transport Canada were dishonest and intended to harm the plaintiffs. There is no direct evidence that Saucedo was also involved in these particular communications. However, in light of her close relationship with Karpishka and their co-ownership of TTI, on whose behalf Karpishka was acting, and the history of Saucedo and Karpishka speaking on one another’s behalf, it is reasonable to conclude that she was aware of and approved Karpishka’s actions, including his false statements to Transport Canada.

[103] Accordingly, I have no difficulty finding that defendants breached their fiduciary duty to the plaintiffs. They made false statements to Transport Canada to have TTI removed as authorized representative, and to have the boats’ registration cancelled. They did this unilaterally and without notice. The defendants succeeded in their objective which caused harm to the plaintiffs.

Defamation

The Defamatory Statements

[104] In the spring of 2022, the plaintiffs began marketing their business under the name “Shaka Wasaga”. The defendants then published a statement on the Wasaga Tiki Tours website – www.wasagatikitours.com. This website had been registered and purchased by the plaintiffs in April 2021, but was later taken over by the defendants and used for marketing purposes when the parties were working together. After the relationship broke down, the defendants continued to control the website and denied access to the plaintiffs.

[105] On May 19, 2022, the defendants posted a statement on the website with the headline “Illegal Operation”, which read (with emphasis as in the original post):

Thank you to everyone who has called us informing us of a company called "Shaka Wasaga". Guy Patric Charrier, Amanda Mazzotta and 12563789 Canada Inc. were terminated from Tiki Tours International Corp Operation/Lease Agreements (dba Wasaga Tiki Tours) on April 4th, 2022.

Since that time, and without our consent they have been illegally operating our vessels, using our branded images and unlawfully operating under a different trade name called "Shaka Wasaga". They are doing this without proper insurance and against Transport Canada regulations which requires proper documentation on the boats. They are defrauding the public of their money misrepresenting the ownership of these vessels. We have been in contact with our lawyers and will be seeking damages against them in court.

Wasaga Tiki Tours (owned and operated by Tiki Tours International Corp.) will be in operation but we cannot honour any clients that have booked with Shaka Wasaga. We suggest getting a refund and or seeking damages in small claims court against the operators. For your records they can be reached at: Shaka Wasaga: Amanda Mazzotta, GP Charrier 195 Dyer Dr. Wasaga Beach Ontario L9Z 1L9

Booking with Shaka Wasaga is putting yourself at risk since they do not have insurance. All insurance must be registered against the legal owners of the Vessels. Tiki Tours International Corp. is taking every step possible to ensure that their operation is closed and that the operators are held responsible for their fraudulent actions. If you see the boats in the water (with the banner Shaka Wasaga) call the police! They will be stopped and they will be fined.

It is unfortunate that individuals feel justified in operating above the law. Covid has taken a toll on us all and Tiki Tours International Corp. simply wants to make the world a better and happier place with our Tiki Boats. We appreciate your understanding in the matter and hope you join us once we are fully operational.

Below are the official certificates of registration for the vessels. Tiki Tours International Corp is the ONLY company registered with TRANSPORT CANADA.

YJO31938G121 - Wai - C32039ON
YJO31938H121 - Nalu - C32040ON

[106] The next day, May 20, 2022, the defendants posted the following on Facebook, which also contained a link to the statement quoted above:

Please be advised that the past several weeks, Amanda Mazzotta, GP Charrier & 12563789 Canada Inc. dba as "Shaka Wasaga" have been illegally been operating vessels belonging to Wasaga Tiki Tours. They have no insurance and have stolen our boats. Fines are pending and a lawsuits has been prepared. We are in the process of trying to retrieve our vessels so that we may properly service Wasaga Beach with our Tiki Boats. We appreciate your support in this matter. Do not support them and ask them of proof of vessel registration and insurance dated post May 18th, 2022. Please click the link below for more information and our proof of ownership.

[107] The Facebook post appeared on several Facebook pages.

[108] Karpishka’s affidavit of August 21, 2023 describes the defamatory posts as having been posted by him, stating that “[n]othing I said in any posts generally are factually untrue.” The second post, on Facebook, contains the words: “Mike Karpishka shared a link.” However, while Karpishka may have written them, they were posted on behalf of all the defendants. The first post refers to “us” and at the bottom of the post, on the website, it is clear that the website is controlled by TTI, stating: “Wasaga Tiki Tours is under an Operator Agreement with Tiki Tours International Corp.” and asks readers to “inquire about our licence partnerships @ TikiTours.ca.”

[109] Accordingly, as with the fiduciary duty claim, it is reasonable to infer that Saucedo knew of and authorized Karpishka’s actions in writing these posts, which were made on behalf of all three defendants.

[110] On May 25, 2022, the plaintiffs’ lawyers sent a letter demanding that the defendants retract the statements and cease publishing defamatory statements. As the defendants had also attended at the plaintiff’s business on May 20, 2022, and refused to leave until police were called, the letter also demanded that the defendants cease any harassing behavior towards the plaintiffs. There is no evidence before me that the defendants retracted their statements; rather, the evidence is that they remained on the internet, including the Wasaga Tiki Tours website, throughout the summer of 2022.

[111] A statement is defamatory if it would cause a reasonable person to think less of someone or, put another way, would lower the reputation of the person in the community generally. The meaning of the words is for the trier of fact to determine, having regard to their “natural and ordinary meaning”: Lewis v. Daily Telegraph Ltd., [1964] A.C. 234, at 258-260.

[112] This test is easily met in this case. In their plain and ordinary meaning, the words published would be understood to mean, among other things, that the plaintiffs were knowingly operating illegally, without insurance, misusing branded images, using boats that did not belong to them and were stolen, defrauding the public, and that people were putting themselves at risk if they booked with Shaka Wasaga.

[113] In a defamation action, plaintiffs only need to prove that defamatory words were published to people other than them. Damages are presumed. The burden then shifts to the defendant to establish a defence. In this case, the defendants have raised three defences: truth (or justification); fair comment (or as it is better-termed, honest opinion) and qualified privilege.

[114] The plaintiffs complain that the defences are not particularized in the Statement of Defence, arguing that the defendants must plead particulars of the facts on which they rely in support of their defences. While particulars are important, their purpose is to define the scope of the facts in issue and to ensure that the plaintiffs know the case that will be presented by the defendants: Magno v. Balita, 2018 ONSC 3230, para. 20. Here, the pleadings are extensive on the positions of the parties regarding the facts in dispute and apply to the claim for defamation. The words complained of are quite specific and further particulars were not necessary for the plaintiffs to know the case to be met.

Justification and Fair Comment

[115] The defence of truth applies to words which are statements of fact. The defence of fair comment or, more accurately, honest opinion,[^4] applies to words which would be taken by a reader to be a statement of opinion, or a comment. As stated in Ross v. New Brunswick Teachers’ Assn. (2001), 201 D.L.R. (4th) 75, 2001 NBCA 62, at para. 56, a "comment" includes a "deduction, inference, conclusion, criticism, judgment, remark or observation which is generally incapable of proof.” This statement was cited with approval in WIC Radio v. Simpson, 2008 SCC 40, para. 26. As with determining the meaning of the words, “[w]hat is comment and what is fact must be determined from the perspective of a ‘reasonable viewer or reader’”: Ross, at para. 62; WIC Radio at para. 27. Further, for the defence of honest opinion to succeed, the defamatory statements must be supported by facts which are in the statement or are notorious, and which are true.

[116] In this case, the reasonable meaning of the words which I have stated above – that the plaintiffs were knowingly operating an illegal business, with boats they had stolen, knowing they were not insured and were putting customers at risk – would be regarded as statements of fact. They consist of bald unequivocal allegations with little additional information. Indeed, the claims that “fines are pending” and that, if reported to the police, the plaintiffs “will be stopped”, drives home the factual meaning of the words – that they were not simply opinions, or comments raising questions or drawing conclusions from other facts stated in the published words.

[117] As I have concluded the defamatory words were statements of fact and not opinion, there is no need to consider the defence of fair comment. However, if I am incorrect and the words could be interpreted as opinion or comment, I would have found that the defence fails. Any comment must have a “basis” in facts stated in the words or which would be known to readers: Here, there are few, if any, facts in the statements that would or could support the opinions or conclusions stated. Put another way, there is nothing to provide a basis for readers to “make up their own minds on the merits” of what has been asserted. In short, there is no factual basis on which a person, even a prejudiced and unreasonable person, could honestly have held the opinions stated – assuming they are opinions at all: WIC Radio, at paras. 31-39.

[118] The justification defence fails as well. It requires that the defendants prove, on a balance of probabilities, that the words are substantially true. The defendants are not required to prove each and every defamatory statement, but must prove that the main thrust, or “sting” of the libel, is substantially true: Grant v. Torstar Corp., 2009 SCC 61, para. 33.

[119] Here, the defendants have failed to meet their burden of proof. There is no evidence that the plaintiffs were operating the boats illegally, or without insurance, or with boats that did not belong to them. Nor is there evidence that they endangered or defrauded customers.

[120] I have found that the plaintiffs owned the boats. The only thing that had changed, briefly, in the spring of 2022 was the registration of ownership with Transport Canada caused by Karpishka’s wrongful conduct in asking Transport Canada to only list TTI as the owner. This was reversed by Transport Canada promptly after the plaintiffs became aware of Karpishka’s actions and informed Transport Canada.

[121] The plaintiffs had insurance, the boats were not stolen and were properly registered showing 125 as a co-owner. There is no evidence before me that the plaintiffs even operated the boats commercially during the brief period in which TTI was listed as the sole owner, nor that they did so knowingly. Accordingly, the defence of justification fails.

Malice

[122] In my view, the defendants acted with malice. This defeats the defence of fair comment and the defence of qualified privilege discussed below.

[123] In Cherneskey v. Armadale Publishers Ltd., [1979] 1 S.C.R. 1067 at 1099, Dickson J., as he then was, described malice as follows:

Malice is not limited to spite or ill will, although these are its most obvious instances. Malice includes any indirect motive or ulterior purpose, and will be established if the plaintiff can prove that the defendant was not acting honestly when he published the comment. This will depend on all the circumstances of the case. Where the defendant is the writer or commentator himself, proof that the comment is not the honest expression of his real opinion would be evidence of malice.

[124] The plaintiffs must prove that the defendants had an intention to harm the plaintiffs and that this was their dominant motive in disseminating the defamatory words: WIC Radio, para. 53.

[125] Here, the evidence of malice is strong. The defendants took steps to change the registration of the ownership of the boats with Transport Canada in early May 2022, which came into effect on May 18, 2022. They did not give any notice of this change to the plaintiffs, even though, in April and early May 2022, the defendants were corresponding with the plaintiffs – both directly and through lawyers – to “terminate” the relationship and to make demands of the plaintiffs for the return of the boats and for money.

[126] There is no evidence that the defendants raised concerns with Transport Canada regarding the legal or safe operation of the Tiki Boats by the plaintiffs at this time. All Karpishka had to say about it was in his affidavit sworn in August 2022, expressing concern about his exposure to liability as the authorized representative. But if Karpishka had concerns about the boats being operated safely and without insurance, he ought to have notified Transport Canada of those concerns. Instead, he attempted to destroy the plaintiffs’ business by embarking on a social media campaign attacking them, asserting defamatory and unfounded facts which had the effect of scaring away customers. The defendants did this immediately prior to the Victoria Day long weekend which was, as Mazzotta stated, “scheduled to be the grand opening of 125’s operation of the Tiki Boats.” This would have been known to the defendants as well.

[127] The defendants’ failure to retract and remove the comments as requested, and especially after Transport Canada corrected the registration on June 2, 2022, is also evidence supporting the conclusion that the dominant motive of the defendants was to harm the plaintiffs’ business. The defendants’ objectives have not abated, as seen by their conduct in 2024. All of this leads me to conclude that the defendants’ publication of the defamatory statements was malicious.

Qualified Privilege

[128] The defendants also rely on the defence of qualified privilege, arguing that Karpishka, as the authorized representative for the boats, had a legal duty to alert people to what he believed to be an illegal business operated by the plaintiffs. However, assuming Karpishka had a legal duty to speak out, and that readers of the post had a “corresponding interest or duty to receive” the information, the privilege is still, as the Supreme Court stated in Bent v. Platnick, 2020 SCC 23, para. 121, “qualified in the sense that it can be defeated.” [emphasis in original]

[129] Two things can defeat the privilege: malice, or “where the scope of the occasion of privilege was exceeded”: Bent at para. 121.

[130] As I have found, the defendants’ dominant motive was to injure the plaintiffs. This defeats the privilege in this case.

[131] But the defendants also exceeded the privilege as their communication to the public was not reasonably appropriate or necessary in light of any legitimate purposes of the occasion: Botiuk v. Toronto Free Press Publications Ltd., para. 80.

[132] If the defendants truly had concerns about the safety and legality of the plaintiffs’ operation, they should have conveyed their concerns to Transport Canada rather than unilaterally changing the registration of ownership. Or, as they urged others to do in their defamatory statements, the defendants could have contacted the police who, as they asserted, would “stop” the boats. They did neither, and instead chose to attack the plaintiffs on the internet in an effort to destroy their business. This went far beyond any legitimate occasion of privilege, if there was one.

Remedies and Damages

Ownership of the Boats

[133] In light of my findings regarding the sale of the boats, I declare that the plaintiff 12563789 Canada Inc. is the owner of the Tiki Boats. I order Transport Canada to transfer the ownership of vessels with official numbers C32039ON and C32040ON, and Hull Identification numbers YJO31938G121 and YJO31938H121, to the Plaintiff, 12563789 Canada Inc. I also order Transport Canada to produce a copy of all documentation related to the vessels to the Plaintiff, 12563789 Canada Inc.

Damages

[134] As a result of the conduct of the defendants in 2024, the plaintiffs were unable to operate the vessels from June 7 to July 19, 2024. This resulted in the cancellation of bookings and refunds of $11,345.20. During that time the plaintiffs continued to incur substantial expenses, such as insurance, rent and financing costs. Further, in an effort to recover cancelled bookings, they offered discounts to customers who agreed to rebook later that summer.

[135] The amount of the losses is difficult to measure precisely; however, taking into account the expenses and loss of business for over a month at the height of the summer, and the plaintiff’s revenue for the balance of the season, I fix their pecuniary damages for breach of fiduciary duty at $30,000.

[136] The plaintiffs also lost business in 2022 as a result of the defamatory statements by the defendants. How much is unclear. However, there were tangible impacts of the publication of the statements.

[137] A ribbon-cutting event for Shaka Wasaga that was to include the mayor of Wasaga Beach was cancelled due to the “dispute with the previous owner.” The plaintiffs have led evidence of customers cancelling bookings and of potential customers making specific inquiries about the assertions in the defamatory statements, such as whether the plaintiffs’ business was legitimate, whether they were operating stolen and uninsured boats, and whether they could be trusted.

[138] I have no doubt, therefore, that the plaintiffs suffered some financial losses as a result of the defamatory statements.

[139] General damages in a defamation case are presumed and considered “at large in the sense that the award is not limited to a pecuniary loss that can be specifically proved”: Walker v. CFTO Ltd., 1987 CarswellOnt 757, para. 21. My role is to fix damages in an amount that reflects the nature and seriousness of the libel, vindicates the plaintiffs’ reputation and compensates the plaintiff for wounded feelings. The plaintiffs submit that such general damages should be somewhere between $25,000 and $100,000.

[140] In this case there was no direct personal attack on Charrier or Mazzotta, although I have no doubt that they felt it deeply themselves. The defamatory words were serious, alleging illegal and unsafe operations. However, the defamatory impact on the business operation was likely short-term. There is no evidence, years later, that the plaintiffs’ business suffered significantly in 2022, or continues to suffer now due to the defamatory statements. General damages here must reflect the seriousness of the libel but at the same time must not exaggerate the harm to the business. In my view, $30,000 in general damages is an appropriate sum to vindicate the plaintiffs’ reputation.

[141] Further, the conduct of the defendants in 2022 and 2024 supports an award of punitive damages.

[142] As I have found, the defendants deliberately sought to injure the plaintiffs with their false and defamatory statements in 2022. The defamatory statements were made by the defendants with the knowledge that they were false, or with reckless disregard for the truth. The defendants’ interaction with Transport Canada in 2024, without notice to the plaintiffs, is an indication of the defendants’ deliberate actions to harm the plaintiffs. Not only did the defendants breach their fiduciary duty to the plaintiffs, but in doing so they deliberately misled Transport Canada, failed to give notice of any kind to the plaintiffs, and acted in disregard of the Order of Koehnen J.

[143] Punitive damages are awarded to punish the wrongdoer for their misconduct in order to deter the wrongdoer, and others, from engaging in such conduct: Walker at para. 44. On the other hand they are damages over and above the general compensatory damages I have already awarded. They should not be so large, therefore, as to constitute an extraordinary windfall to a plaintiff. Having considered punitive damage awards in other cases, and in particular defamation cases, in my view an award of $30,000 in punitive damages, payable by the defendants to the plaintiffs, is appropriate.

Conclusion

[144] As I have found for the plaintiffs that there was no joint venture agreement reached between the parties, it is not necessary for me to address the alternative position of the plaintiffs that they are entitled to remedies under the Arthur Wishart Act (Franchise Disclosure), 2000, SO 2000, c 3. Nor is it necessary for me to address the defendants’ remedy sought at trial for an accounting of the plaintiffs’ profits. It follows that the counterclaim is dismissed.

[145] I grant judgment for the plaintiffs and order as follows:

(i) The boats are owned by 125. Transport Canada shall be directed to amend all documentation to show that 125 is the sole owner, and Charrier shall be the authorized representative.

(ii) The defendants shall pay damages to the plaintiffs in the following amounts:

• $30,000 for breach of fiduciary duty;
• $30,000 for defamation; and
• $30,000 in punitive damages.

[146] The plaintiffs shall draft the necessary orders to give effect to my directions respecting ownership which, in the absence of agreement by the parties, may be forwarded to me for consideration.

[147] If the parties are unable to agree on costs within 30 days of the release of these Reasons, they may contact my assistant to arrange a case conference to determine how costs will be addressed.

Paul B. Schabas
Date: March 25, 2025

[^1]: English is not Charrier’s first language, and his messages often contained grammatical or other errors. Mazzotta noted this in her messages when she corrected Charrier, saying “his English is not the best.”

[^2]: $30,000.00 + 19,745.21 + $25,323.00 + 47,000.00 + $197,356.00.

[^3]: Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 at para 27, citing Frame v. Smith, [1987] 2 S.C.R. 99, where Wilson J., in dissenting reasons later adopted and applied in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574.

[^4]: In Reynolds v. Times Newspapers Ltd., [1999] 4 All E.R. 609, [2001] 2 A.C. 127 at 615, Lord Nicholls discussed the wide scope of the defence and said that “the time has come to recognize that in this context the epithet ‘fair’ is now meaningless and misleading.” The British Parliament adopted this suggestion in the Defamation Act 2013, c. 26, s. 3, when it codified the defence under the heading “honest opinion.”