False Imputations About Business 


March 2010 - (Lang Michener LLP InBrief Spring 2010)

Lang Michener LLP InBrief Spring 2010

The recent victory in the Supreme Court of Canada for press freedom may not immediately resonate as something of interest or concern to business. But if one sees the ruling as allowing mistaken information to be published about the business enterprise or its leaders, then it may arouse more than cursory attention.
The rulings in Quan v. Cusson (" Quan ") and Grant v. Torstar Corp. (" Grant ") may not seem to go so far, but where the publication is on a matter of public interest, and the publisher was diligent in trying to verify the allegation (having regard to a number of factors) then, notwithstanding error (i.e., defamation), the defence of "responsible communication in the public interest" does provide a safe haven.
In short, the common law of defamation has been modified to accord stronger protection to defamatory statements of fact published responsibly. Many an editorial has heralded this change as "bringing freedom of expression into the 21st century." And some have called it "a victory for all," but is it?
The Companion Cases in the Supreme Court

The facts in the Quan case are essentially these: Danno Cusson was a constable with the Ontario Provincial Police ("OPP") who, shortly after the events of September 11, 2001, and without permission from his employer, traveled to New York City to assist with the search and rescue effort at Ground Zero. Initially, he was portrayed in the press as a hero, while the OPP was pilloried for demanding that he return to his duties in Ottawa. The Ottawa Citizen subsequently published three articles alleging that Cusson had misrepresented himself to the authorities in New York and possibly interfered with the rescue operation.
The facts in the Grant case strike closer to the point made in the introduction. Peter Grant and his company, Grant Forest Products Inc., sued the Toronto Star in defamation for an article the newspaper published in June of 2001, concerning a proposed private golf course development on Grant's lakefront estate. The story carried the views of local residents who were critical of the development's environmental impact and suspicious that Grant was exercising political influence behind the scenes to secure government approval for the new golf course. The reporter, an experienced journalist, attempted to verify the allegations in the article, including asking Grant for comment, which Grant chose not to provide.

The article published in the Toronto Star included the following paragraph, which became the centerpiece of the libel action brought by Grant: "‘Everyone thinks it's a done deal because of Grant's influence – but most of all his [Ontario Premier] Mike Harris ties,' says Lorrie Clark, who owns a cottage on Twin Lakes."
This is referred to as "reportage" – a defamatory statement clearly attributed to someone other than, and not adopted by, the publisher. One view is that reportage is simply the accurate reporting of facts – the fact of what someone said. The media has argued that reportage is essential to comprehensive coverage of public debate. Charges flung back and forth between contending factions in a dispute are themselves, it is argued, an essential part of the story, and will be understood by the public as such.
Some Legal History

When the Quan case was before the Ontario Court of Appeal, Justice Sharpe undertook an extensive review of the Canadian law of "qualified privilege," as well as the more recent developments in other common law jurisdictions. The Court concluded that the existing law should be developed in order to give "appropriate recognition and weight to the Charter values of freedom of expression and freedom of the media without unduly minimizing the value of protecting individual reputation." The Supreme Court of Canada decided to leave the traditional defence of qualified privilege intact, and chose to name and shape a new defencethat would encompass traditional journalism, as well as blog postings and other online media.
The Defence of "Responsible Communication"

The Supreme Court held that the defence of responsible communication on matters of public interest applies where (i) the publication is on a matter of public interest, and (ii) the publisher was diligent in trying to verify the allegation, having regard to: 

a) the seriousness of the allegation;
b) the public importance of the matter;
c) the urgency of the matter;
d) the status and reliability of the source;
e) whether the plaintiff's side of the story was sought and accurately reported;
f) whether the inclusion of the defamatory statement was justifiable;
g) whether the defamatory statement's public interest lay in the fact that it was made, rather than its truth ("reportage"); and
h) any other relevant circumstances.

Determining Public Interest and Responsible Communication

When an issue arises, it is a judge that determines whether the publication was on a matter of public interest. If so, the jury then decides whether the standard of responsibility was met. And when determining responsibility, the jury must consider the broad thrust of the publication as a whole, rather than minutely parsing individual statements.
The Public Interest

The public interest is not synonymous with what interests the public. The public's appetite for information on a given subject – say, the private lives of well-known people – is not, on its own, sufficient to render an essentially private matter public for the purposes of defamation law. An individual's reasonable expectation of privacy must be respected in this determination.
But the authorities offer no single "test" for public interest, nor a static list of topics falling within the public interest.

In The Law of Defamation in Canada, Raymond Brown notes that to be of public interest, the subject matter "must be shown to be one inviting public attention, or about which the public has some substantial concern because it affects the welfare of citizens, or one to which considerable public notoriety or controversy has attached." (Italics added.)

And so, public interest is not confined to publications on government and political matters. As the Supreme Court has acknowledged, "The public has a genuine stake in knowing about many matters, ranging from science and the arts to the environment, religion, and morality."

In Quan, the public interest test was found to be clearly met in that the Canadian public has a vital interest in knowing about the professional misdeeds of those who are entrusted by the state with protecting public safety. News of Cusson's heroism was already a matter of public record, and there was no reason that legitimate questions about the validity of this impression should not be publicized as well.

In the Grant case, the Supreme Court noted that: "Care must be taken by the judge making [a public interest] determination to characterize the subject matter accurately. Overly narrow characterization may inappropriately defeat the defence at the outset. For example, characterizing the subject matter in this case simply as ‘Peter Grant's business dealings' would obscure the significant public interest engaged by the article and thus restrict the legitimate scope of public interest."

Some Concluding Remarks

One can feel generally comfortable with the application of the public interest test in Quan, for example – the case being vaguely political in nature and involving someone purporting to represent government agencies. But, as suggested, the public interest may encompass matters of health, product safety, financial well-being and so on. That being so, then a wide variety of activities in which business is regularly involved can be captured as well. And, in that case, journalists will only have to be found to have acted responsibly, notwithstanding publication of material containing errors and false imputations.

Looking ahead, whenever it appears that something has caught the attention of the media or that it might go viral, it seems prudent for corporate and business interests to immediately engage specialized legal counsel and public relations experts to be engaged from the outset in the initial inquiries and in the drafting of comments and responses and in assisting with any fallout.

This article appeared in the Lang Michener LLP InBrief Spring 2010.