New Canadian internet defamation case: Henderson v. Pearlman (Ont. SCJ)

Canadian internet defamation caselaw continues to develop.

In a recent Ontario decision, Henderson v. Pearlman, 2009 CanLII 43641 (ON. S.C.), Hennessy, J. of the Ontario Superior Court of Justice has granted an Ontario plaintiff summary judgment and a permanent injunction arising from defamatory postings on various American defendants’ websites. The plaintiff owned and operated a fraud awareness website established in May 2000 from Sudbury, Ontario with the URL < http://www.crimes-of-persuasion.com>. He also had published a 432 page book entitled Crimes of Persuasion: Schemes, Scams, Frauds, dealing with telemarketing fraud, investment schemes, and consumer scams. The plaintiff further asserted that he routinely advised law enforcement agency officials and defence lawyers on matters related to consumer and investment fraud.

The plaintiff commenced an internet defamation action in 2005, alleging that the defendants had defamed him through a “program of misinformation on various websites, internet newsgroups and internet fora”, including the following statements:

· that he was career criminal who is wanted by the FBI for endangering the welfare of a minor;
· that he was working with a group of criminals;
· that he lured a minor to a hotel room to do coke;
· that his books were plagiarized material;
· that his consumer fraud awareness website was a scam to lure victims;
· that he was a perverted individual;
· that he wrote nothing but lies;
· that he had a long criminal record;
· that he was an extortionist;
· that he was convicted of shoplifting and selling stolen goods; and
· that Canadian authorities made him take down his website.

The foregoing statements were republished on the internet by the defendants who provided links to other websites (at para. 18-20).

The plaintiff sought summary judgment of his claim and damages for internet defamation. The plaintiff’s defamation claim against ten defendants—seven of which were based in Florida and three in Oregon—was based upon alleged defamatory remarks made about him on various websites. The Oregon defendants’ motion challenging jurisdiction and requesting a stay of proceedings on lack of jurisdiction simpliciter or that Ontario was forum non conveniens was dismissed, as was the Florida defendants attempt to set aside previous order regarding forum, to stay proceeding, and for declaration that Ontario was not most convenient forum.: Henderson v. Pearlman 2006 CanLII 32908 (ON S.C.) . The defendants who were successfully served were either noted in default, or the action against them discontinued.

Hennessy, J. relied upon the leading case in Barrick Gold Corp. v. Lopehandia (2004), 71 O.R. (3d) 416 where Blair J.A., by way of introducing his reasons, observed that:

“The Internet represents a communications revolution. It makes instantaneous global communication available cheaply to anyone with a computer and an Internet connection. It enables individuals, institutions, and companies to communicate with a potentially vast global audience. It is a medium which does not respect geographical boundaries. Concomitant with the utopian possibility of creating virtual communities, enabling aspects of identity to be explored, and heralding a new and global age of free speech and democracy, the Internet is also potentially a medium of virtually limitless international defamation.

While the plaintiff only sought summary judgment, the court, sua sponte, entertained granting an injunction  based upon the test set out in Canada (Human Rights Commission) v. Canadian Liberty Net, [1998] 1 S.C.R. 626 at para. 49):

· The likelihood of a finding of defamation at trial;

· The words in question must be clearly defamatory and obviously impossible to justify,

· the trial judge’s acceptance of a defence of justification would of necessity have to be set aside as some perverse finding on appeal (at para. 49).

Given that the defendants were noted in default, the court inferred that the plaintiff’s allegations were true (Rule 19.02(1) of the Rules of Civil Procedure), stating:

43 In the absence of any defence and in view of the deemed admissions to all allegations in the Statement of Claim, there is no difficulty in resolving the question of fact once the question of law is determined.

44 To call someone a career criminal and a child molester is clearly and obviously defamatory. These words are repeated, in modified phrases and sentences, throughout the various websites. The descriptions of the plaintiff, noted above, serve to illustrate both these labels. The statements are clearly capable of being defamatory. And in these circumstances, as untrue, baseless attacks on the character and integrity of the plaintiff, they are clearly defamatory in fact. In the absence of any intent to justify, no reasonable jury would find these words anything but defamatory.

45 As Blair J.A. said in Barrick Gold, “[t]he extraordinary capacity of the Internet to replicate almost endlessly any defamatory message lends credence to the notion that “the truth rarely catches up with a lie” (at para. 32).

46 The allegations and information appearing about the plaintiff on the defendants’ websites, and bulletin boards would tend to lower him in the estimation of right thinking members of society and this information would expose him to contempt. I am satisfied that the statements could not justify a verdict other than this. A jury would not be able to find justification for such statements (Canada Metal Co. Ltd. et al. v. Canadian Broadcasting Corp. et al. (1975), 7 O.R. (2d) 261 at page 262).

47 Accordingly, I find the words complained of defamatory.

Citing the Canadian Liberty Net case above, and Robert J. Sharpe, Injunctions and Specific Performance (2nd ed., loose-leaf (Toronto: Canada Law Book) at paras. 5.40 to 5.70.), the court issued a permanent injunction against the defendants, noting:

51 This is an exceptional case which calls for the extraordinary relief of an injunction. The defendants have attempted to avoid service, attempted to move the proceedings to Florida and, when unsuccessful, refused to participate in any way in these proceedings.

52 I am satisfied that on a balance of probabilities, a permanent injunction should be granted to prohibit the defendants from continuing to post these comments. They are clearly defamatory and there is no evidence that the defendants have ever, including until the present time, taken any steps to remove the postings from their website.

54 An order enjoining the defendants from continuing to comment about the plaintiff cannot be so broad as to preclude them from exercising their rights to free expression (see Beidas v. Pichler (2008), 238 O.A.C. 103 (Div. Ct.), at paras. 46-47 on this point).

55 Accordingly, I enjoin the defendants from publishing or republishing:

(a) any material in the specified articles;
 

(b) any material derived from those articles;

(c) any material pertaining to, or referencing those articles;

(d) any information relating to the status, lifestyle, personal activities or business of the plaintiff; and

(e) any other information that is defamatory of the plaintiff.

Finally, the plaintiff was awarded general and aggravated damages of $10,000 against each of six of the defendants for their respective involvement in the creation, publication or republication of the libellous statements, with costs submissions reserved to a later date.

Postscript
In November 2007, one of the Florida co-defendants, Ayman Difrawi (personally and on behalf of his company, Internet Solutions Corporation) commenced parallel proceedings in Florida against the Ontario plaintiff and others, alleging conspiracy, defamation, false light invasion of privacy, civil RICO, tortious interference, and trade libel: see the helpful case summary  by the Citizen Media Law Project in Difrawi v. Henderson. 

One of the other Florida co-defendants, Lou Pearlman, is the former talent manager and impresario of 1990s boy bands the Backstreet Boys and *NSYNC, who is now serving (up to) 25 years in a US federal prison after perpetrating one of the largest Ponzi schemes  in U.S. history and subsequently pleading guilty to conspiracy, money laundering, and making false statements during a bankruptcy proceeding.

While internet defamation jurisprudence continues to develop, not all defamatory statements are justiciable. In particular, readers should note that absolute immunity accorded to “judicial proceedings” in defamation law extends to “statements though made falsely and maliciously.” (see: Sauve v. Merovitz). Even a witness who gives perjured testimony is protected from subsequent law suits that are based on perjured testimony or false affidavits. Accordingly, pleading malice and bad faith will likely not withstand a motion to strike pleadings to the extent that the cause of action alleges defamation and is based on “judicial proceedings.” In . Reynolds v. Smith 2007 ONCA 166 (CanLII), (2007), 84 O.R. (3d) 738 at para. 14 (C.A.) (sub nom. Reynolds v. Kingston (City) Police Services Board) the Ontario Court of Appeal recently reaffirmed the immunity of parties and witnesses from subsequent liability arising from their testimony in judicial proceedings, stating at para. 14 that:

“The absolute immunity of parties and witnesses from subsequent liability for their testimony in judicial proceedings developed in early English cases and is well established at common law. Any communication, even perjured testimony, made in the course of a judicial proceeding, cannot serve as the basis for a suit in tort. The rationale for witness immunity, which has become less an evidentiary rule than a rule of substantive law, is that the proper administration of justice requires full and free disclosure from witnesses unhampered by fear of retaliatory lawsuits. See, e.g., Samuel Manu-Tech Inc. v. Redipac Recycling Corp., [1999] O.J. No. 3242, 38 C.P.C. (4th) 297 (C.A.), at paras. 19 and 20.

Antonin I. Pribetic

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