|
Tort - Defamation - Apology. James Bay Resources Limited v. Mak Mera Nigeria Limited
In James Bay Resources Limited v. Mak Mera Nigeria Limited (Ont CA, 2025) the Ontario Court of Appeal allowed an appeal - here from orders that "Mak Mera to pay James Bay the amount of US$405,000, which she characterized as “advances”" and "damages for defamation in the amount of $200,000".
Here the court considers the role of 'apology' in assessing defamation damages:The significance of an apology or its absence in the determination of damages
[92] In the case of a corporate plaintiff, the absence of an apology, by itself, cannot serve to aggravate damages or justify an award of substantial damages. This is because of the different function that the presence or absence of an apology plays in the analysis of damages for an individual versus a corporate plaintiff. While the lack of an apology is a relevant factor for both corporate and individual plaintiffs, its significance and treatment in the analysis are not equivalent.
[93] The primary function of an apology in the assessment of damages for corporate plaintiffs is its mitigating effect. A “prompt correction, retraction or apology may be far more valuable than an award in damages” because it recognizes the wrongfulness of the defamation and stops its pernicious, ongoing impact: Grossman v. CFTO-TV Ltd. (1982), 1982 CanLII 1768 (ON CA), 39 O.R. (2d) 498 (C.A.), at p. 504.
[94] Accordingly, the significance of the absence of an apology for corporate plaintiffs is that the seriousness of the defamation and its impact are not attenuated. As this court explained in United Soils Management Ltd., at para. 25, “the timely and unqualified apology and retraction” of the offensive libel can be “a crucial factor in assessing harm caused or likely to be caused” to the plaintiff because an apology may go “a long way to eliminating any possible future harm to the [plaintiff’s] reputation” and serves to achieve the vindication of the plaintiff’s “good name”.
[95] With respect to an individual plaintiff, however, the absence of an apology, per se, may give rise to an entitlement on the part of an individual claimant to aggravated damages, which are not for injury to reputation but for the additional separate element of injury to feelings: Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130, at paras. 192-94; Ratzen v. Mirror Group Newspapers (1986) Ltd., [1994] Q.B. 670 (Eng. C.A.), at p. 683; and Rai v. Bholowasia, [2015] EWHC 382 (Eng. Q.B.), at para. 175, citing John v. MGN Ltd., [1997] Q.B. 586 (Eng. C.A.), at p. 607. Similarly, this court explained in Walker, at p. 111, that: “Aggravated damages are damages which take into account the additional harm caused to the plaintiff’s feelings by such reprehensible or outrageous conduct on the part of the defendant” (emphasis added).
[96] As I have already noted, a corporate claimant is not entitled to recover damages for injury to its feelings. It is therefore critical that in its determination of damages, a court not conflate the two and award to a corporation under the guise of a substantial award of damages what really are aggravated damages for injured feelings or humiliation.
[97] The presence of an apology is significant because, as this court instructed in United Soils Management Ltd., at para. 25, by itself, an unqualified and timely apology can vindicate a corporate plaintiff’s good name. However, the reverse is not true. The significance of a failure to apologize is that the ongoing damage of the defamation, particularly if the defamation is widespread, continuing and destructive, remains unattenuated. It is the unchecked extent of the latter factors, and not the mere absence of an apology, that may support a substantial award of damages for corporate plaintiffs: Valley Traffic Systems Inc. v. Malak, 2024 BCCA 370, 96 B.C.L.R. (6th) 199, at paras. 49-51, aff’g Malak v. Hanna, 2023 BCSC 1337, 96 B.C.L.R. (6th) 199.
[98] Aggravated damages must be distinguished from aggravating factors. A corporate plaintiff cannot be awarded aggravated damages. Aggravating factors, however, may support a substantial award of damages. That said, absent evidence of damage or impact, a substantial award of damages cannot be supported by the mere absence of an apology, unless there are other aggravating factors such as widespread publication and continued, longstanding and repetitive libel.
[99] For example, in Barrick Gold Corporation, this court held, at para. 51, that the individual defendant’s “refusal to retract his statements, or to apologize for them” served as an aggravating factor in the circumstances of that case, including the defendant’s “dogged pursuit of the libelous campaign”, the virtually unlimited publication of the defamation on the internet, and the demonstrated impact on the corporate plaintiff’s reputation. A careful reading of the reasons in Barrick Gold Corporation demonstrates that the absence of an apology was characterized as aggravating the “vicious and widespread” defamation in that case and, as a result, failed to attenuate the huge and ongoing impact of the vicious and widespread defamation in that case. It was the unchecked nature and extent of the defamation and ensuing impact that supported the substantial award of damages substituted by this court.
[100] Similarly, in Valley Traffic Systems Inc., the absence of an apology or a retraction by itself did not serve to increase the damages assessed in favour of the corporate plaintiff. The British Columbia Court of Appeal rejected the submission that the trial judge had erred in his treatment of the absence of an apology or a retraction, noting, at para. 65 of the reasons, that: “in assessing general damages [for the individual and corporate plaintiffs] the judge expressly rejected absence of an apology or retraction as factors justifying a higher award” and considered the failure to apologize only in the assessment of aggravated damages for the individual plaintiff.
[101] The circumstances in Valley Traffic Systems Inc. that the trial judge found supported a substantial award of damages included widespread publication of seriously defamatory statements accusing the plaintiffs of illegal kickbacks and other corrupt activities, which were the product of a common design by competitors to defame both the corporate and individual plaintiffs and resulted in reputational and inferred business losses to the corporate plaintiffs. The trial judge found that these defamatory statements were particularly harmful having regard to the corporate plaintiffs’ customers who were quasi-public/public bodies that “generally wish to avoid public controversy”: Malak, at para. 198. He explained that it was those factors and not the defendants’ failure to apologize or issue a retraction that justified a higher award of damages because: “It is not surprising that given the ongoing litigation, and the legal position taken by [the defendants] that they were not part of a common design to defame the plaintiffs, that they did not issue a retraction or apology”: Malak, at para. 221.
The Walker analytical framework
[102] In the present case, the trial judge’s award of substantial damages in the absence of the appellants’ apology relied on the highlighted portion of para. 40 of the reasons in Second Cup Ltd.:It has been observed that a company cannot be injured in its feelings and therefore “damages may be small in commercial terms, unless the defendants’ refusal to retract or apologize makes it possible to argue that the only way in which the reputation of the company can be vindicated in the eyes of the world is by way of a ‘really substantial award of damages’.” (see: Walker v. CFTO (1987), 1987 CanLII 126 (ON CA), 59 O.R. (2d) 104 at para. 26 (per Robins J.A. for the Court) quoting with approval from Carter-Ruck, Libel and Slander (3rd Edn.) 1985 at pp. 156-157). [Emphasis added.] [103] The trial judge erred in her application of these principles because she interpreted and applied the highlighted portion as a dispositive factor without looking at all the relevant circumstances.
[104] The highlighted portion appears in the context of a larger, more general discussion in Walker, at pp. 113-14, about a company’s limited entitlement to damages in defamation absent proof of loss or harm to reputation. The text comes from the following long passage from Peter F. Carter-Ruck & Richard Walker, Carter-Ruck on Libel and Slander, 3rd ed. (London: Butterworths, 1985), at pp. 156-57:Limited companies, and other corporations, may also be awarded general damages for libel or slander, without adducing evidence of specific loss. However, it is submitted that in practice, in the absence of proof of special damages, or at least of a general loss of business, a limited company is unlikely to be entitled to a really substantial award of damages. As was made clear by Lord Reid in Lewis v Daily Telegraph Ltd, ‘A company cannot be injured in its feelings, it can only be injured in its pocket. Its reputation can be injured by a libel but that injury must sound in money.’ Whilst Lord Reid went on to say ‘The injury need not necessarily be confined to loss of income; its goodwill may be injured’, a company, which is unable at trial, some two or three years after the original defamatory publication, to point to the slightest hiccup in its trading figures, may be hard pressed to persuade a court that even an unpleasant libel has seriously injured its reputation. Unlike a personal plaintiff, it cannot tug the jury's heart strings by describing its distress and humiliation on reading the defamatory words. This presents a problem for a limited company which has been defamed, since it is often difficult to prove that the publication caused either a specific or a general loss of business. That there is an entitlement to general damages which are more than nominal damages is certain, but the amount likely to be awarded to a corporation may be small in commercial terms, unless the defendant's refusal to retract or apologise makes it possible to argue that the only way in which the reputation of the company can be vindicated in the eyes of the world is by way of a really substantial award of damages. [Citations omitted.] [Underlining added; italics in original.] [105] The last sentence of the above quote must be interpreted in the context of the entire passage. A defendant’s refusal to retract or apologize by itself does not allow for “a really substantial award of damages”. Rather, the absence of the apology must be looked at in the context of all relevant circumstances, including the nature, gravity and extent of the defamation, the wrongdoer’s conduct, and the impact of the defamation. This is the way in which this court in Walker applied the above-cited passage.
[106] In Walker, during a television program broadcast across Canada, the defendants suggested that the plaintiff company and its principals had abused the public trust through their allegedly dangerous and unlawful disposition of toxic waste. As in the present case, the plaintiffs in Walker did not claim specific damages or sustain any financial loss. The defendants did not apologize or retract the libellous statements. The jury awarded damages to the plaintiffs in the amount of $883,000.
[107] This court, at p. 115 of its reasons in Walker, reviewed whether the jury award of $883,000 fell “within the range of damages reasonably required to compensate the company for the reputational harm suffered by it and publicly to clear its good name”, and, in so doing, considered whether it was the only way in which the reputation of the company could be vindicated:In considering this question, it is to be recognized that Walker Brothers sustained no financial loss as a consequence of the libel. It is undisputed that in the four years from the date of the broadcast to the date of trial it suffered no diminution of profits or loss of business, and there is nothing to indicate any likelihood that it will do so in the future. While this may raise doubts about the effect of the libel on the company’s reputation, it does not dictate that the compensatory damages be merely nominal; the action is maintainable per se without proof of damage, general or special. However, if there is no evidence of damage, the view has been expressed that “the damages given (to a corporation) will probably be small” (South Helton Coal Co. v. North-Eastern News Ass’n, Ltd.) and, in the same vein, “the amount likely to be awarded to a corporation may be small in commercial terms” (Carter-Ruck). Although the award may be small or nominal, it is manifest that the judgment enables the plaintiff publicly to brand the defamatory publication as false or groundless, and, when there is no actual damage, can perform the vindicatory function of this cause of action. In the final analysis, however, the amount necessary to uphold the corporate reputation can only be determined by a consideration of all the circumstances of the case viewed in the light of the applicable law. There may be some cases where even absent proof of loss the impact of the libel is such that, as Carter-Ruck points out at p. 157, “the only way in which the reputation of the company can be vindicated in the eyes of the world is by a really substantial award of damages”. [Citations omitted.] [Emphasis added.] [108] I have reproduced this long passage to show how this court in Walker interpreted and applied the statement from Carter-Ruck on Libel and Slander that “the only way in which the reputation of the company can be vindicated in the eyes of the world is by a really substantial award of damages”. The passage demonstrates that in determining whether a substantial award of damages is the only way to vindicate a company’s reputation, all relevant circumstances must be considered, and these circumstances are not limited to an absence of an apology. Importantly, absent proof of loss, the court must consider the “impact” of the libel and whether that impact is such that only a substantial award of damages will vindicate the reputation of the defamed company. If there is no such impact, then absent proof of loss, a substantial award of damages will not be justified, and the judgment, with small or nominal damages and costs, will suffice to perform “the vindicatory function”.
[109] Having accepted “the gravity of the libel and viewed the circumstances in a manner most favourable to the company’s position”, this court in Walker set aside the jury award of $883,000 as “so inordinately large as to bear no reasonable relationship to the defamatory publication or the consequences flowing from it”: at pp. 115-16. The court concluded, at p. 116, that:Furthermore, in this case, there is no question of any pecuniary loss. All that has to be compensated for here is the injury to Walker Brothers’ corporate reputation. The figure set by this jury as being the amount necessary to vindicate that reputation in the eyes of right thinking people in the community goes far beyond the maximum limit of any range that can conceivably be regarded as fair or reasonable compensation for this company in these circumstances. It is so exorbitant and irrational a sum that it should not be allowed to stand. [Emphasis added.]
|
