2007 BCSC 49 WeGo Kayaking Ltd. et al v. Sewid, et al

Before: The Honourable Mr. Justice Macaulay

Reasons for Judgment

Counsel for the Plaintiffs:	M. Scherr and C. Churcher
In Person:	T. Sewid
Date and Place of Trial/Hearing:	20061120-20061124
	Victoria, B.C.

[1] The plaintiffs, WeGo Kayaking Ltd. (“Wego”) and Northern Lights Expeditions Ltd. (“Northern”) are unrelated eco-tourism companies. Both offer kayak tours in the islands known as the Broughton Archipelago and Johnstone Strait located east of Port McNeil on Vancouver Island. The Archipelago is beautiful, relatively protected, and full of sea and wildlife, making it very attractive to kayakers. It is also within the traditional territories of several aboriginal First Nations. The remains of abandoned village sites, Big Houses, memorial poles and pictographs add to the appeal of the area. Because of these features, the Archipelago offers immense opportunities for kayaking tours.

[2] Kayaking eco-tourism relies heavily on the Internet to attract customers. Potential customers around the world conduct key word searches for web pages respecting companies that do business in places of interest. Wego and Northern each had web pages designed to attract business in this fashion. Theirs were not the only sites available to the online searchers.

[3] The focus of this proceeding was on a kayaking and native cultural tours website known as villageisland.com. According to the plaintiffs, the personal defendants published defamatory statements about the plaintiffs’ businesses on the villageisland.com site. Village Island is within the Archipelago and is an abandoned Mamalaleqala Band Indian Reserve.

[4] The trial proceeded against Mr. Sewid because he is the only remaining defendant. Mr. Sewid is a member of the Kwakwaka’wakw First Nation and of the Mamalaleqala Band. He holds a high-ranking name, Hamatsa.

[5] Mr. Sewid’s defence has two prongs. First, he contends that the website was the property of the co-defendant, Ms. Westergaard, and that he has no legal responsibility for the publication of the statements. Second, until trial, Mr. Sewid maintained that the statements made on the website were true. At the beginning of the trial, he successfully applied to amend the statement of defence to replace the defence of truth, or justification, with one of fair comment.

[6] Since about mid-2003, Mr. Sewid has operated a water taxi service in the Archipelago. Commencing somewhat earlier, he also offered cultural tours on Village Island. Village Island is of considerable historical and cultural significance to the Kwakwaka’wakw First Nation and the Mamalaleqala Band. Mr. Sewid considers the island to be a sacred site.

[7] In March 2003, Mr. Sewid filed a Declaration of Proprietorship with the Corporate Registry for Village Island Tours. Copies of earlier registry documents indicate a previous partnership of the same name involving the co-defendant, Kathleen Westergaard, as a partner.

[8] Ms. Westergaard is non-aboriginal. She is not married to Mr. Sewid. Mr. Sewid and Ms. Westergaard have children who live with Ms. Westergaard in a home owned by Mr. Sewid.

[9] According to the partnership documents, Ms. Westergaard’s partner was Louise Katherine Sewid. That partnership was dissolved in the spring of 2002. Nothing turns on the configuration of the earlier partnership.

[10] The evidence as to the personal and business relationship between Mr. Sewid and Ms. Westergaard is somewhat unclear and conflicting. Mr. Sewid described the personal relationship as something other than a common-law relationship although he stays with Ms. Westergaard and the children at the house when he is not away working. Mr. Sewid spends most of his working time out in his traditional territories.

[11] It is apparent on the evidence that, regardless of any limits to their personal relationship, the defendants discussed, cooperated with and assisted each other on business matters. For example, Mr. Sewid testified that Ms. Westergaard received e-mails, handled inquiries and made bookings for his business. He helped direct customers to a gift shop business that she operated, on a float house immediately off-shore Village Island, to sell souvenirs, native art work and snack foods to kayakers and others who went to the island for cultural tours.

[12] It is important to understand why Mr. Sewid is the only remaining defendant. The plaintiffs earlier discontinued against the corporate defendant. In March 2006, they obtained judgment pursuant to Rule 18A against the two personal defendants when they did not attend on the hearing date. Unbeknownst to the plaintiffs at the time, Ms. Westergaard was an undischarged bankrupt. The Trustee in bankruptcy took no steps to overturn the default judgments against her although it is conceded that the plaintiffs cannot enforce the judgments. On April 28, 2006, the same Chambers judge set aside the judgments against Mr. Sewid. This re-opened the door for the litigation to continue but only against him.

[13] In the result, Ms. Westergaard is no longer a party. Nonetheless, she assisted Mr. Sewid, at his request, throughout the trial. This assistance included acting, in effect, as counsel.

[14] In spite of the assistance, some of Mr. Sewid’s evidence appeared intended to create distance between him and Ms. Westergaard so as to preclude any possible finding that they jointly defamed the plaintiffs. As will be seen in these reasons, I do not accept that evidence. On the evidence that I do accept, I infer that the two defendants were in lockstep throughout and continue to be.

[15] For the further reasons set out below, I find that the statements on the website were defamatory. I also find that the defence of fair comment fails.

[16] During 2003 and 2004, pursuant to oral agreements negotiated with the principals of Wego and Northern, respectively Mr. Danyliw and Mr. Arcese, Mr. Sewid provided services for the guides and clients of the two companies. These included water taxi services and cultural tours on Village Island. Wego and Northern were obligated to pay for those services.

[17] In 2004, both Wego and Northern terminated their agreements with Mr. Sewid. I am satisfied that Mr. Sewid was angry with the terminations. He considered that he had been fired. Apart from Mr. Sewid’s evidence at trial, there is no other evidence, including any written communications, to demonstrate that Mr. Sewid’s present complaints about the plaintiffs predated the terminations.

[18] According to the plaintiffs, on or about February 25, 2005, Mr. Sewid published the statements at issue respecting the plaintiffs’ business operations on his website. Although Mr. Sewid adamantly denies that the website was his, the evidence satisfies me that it was.

[19] By early 2005, Mr. Sewid decided to expand his business operation to include kayak tours. This, of course, put him in direct competition with the plaintiffs. In February, advertising for and information respecting that aspect of the business appeared on the website found at villageisland.com, on a page entitled “Sea Kayak Trip Planning Information from Tom Sewid, Native Guardian”. Below, I set out the alleged defamatory statements in italics, together with other parts of the extracts to provide context:

The best way to kayak in the Land Of The War Canoe, enjoy our islands and waters and have the most enjoyable vacation possible is to book with Aboriginal Adventures with Village Island Tours. Let it be known that you are coming to a rainforest and, yes, it does rain. In the summer, if it is not raining, then you can expect fog during the night and morning. I must warn you that with other companies, you will more than likely stay in a soggy, wet, dirty tent and this will effect your whole trip. During the hot days, we tend to get an afternoon west wind …

Further on in the page, under the heading “Kayak Company Comparisons”, is the following:

Many of you who are reading this are comparing the many companies that operate in Johnston Strait and the Broughton Archipelago. There are the cheaper paddle out paddle back to Telegraph Cove and stay in a tent tours and then there are the all inclusive mothership/resort based trips that make you pay through the nose to enjoy tours. Then there is my tour that fits between them all, but offers what no other can. Beware, some companies claim an aboriginal theme, product, or participation with First Nations, but really are not well received by some of us Kwakwaka’wakw. I have a review of the operators in our area. I know that you will see that I have what kayak explorers want and need, and I will give you that vacation of a lifetime.

The name “Thomas Sewid” appears at the end of the page. Copyright is expressly reserved in the name of Village Island Native Cultural Tours.

[20] The word “review” in the paragraph set out above linked to another page headed: “MY REVIEW OF KAYAK TOUR COMPANIES THAT OPERATE IN JOHNSTONE STRAIT & BROUGHTON ARCHIPELAGO” and sub-headed:

This review is intended for people who want to come to our region with an sea kayak company that is looked at favourably by First Nations and Village Island Tours.

The material part of the page that followed, again with the alleged defamatory statements italicized, read:

Good Kayak Companies

Most of the companies that operate in our region of the Kwakwaka'wakw Nation have for years supported our culture, heritage, band level businesses or First Nation individual entrepreneur level business operations. These companies are well received by most of the tribes that make up our nation, as well as individuals. Their tourism businesses are receptive to our peoples concerns about the environment and their operations. They have been and will continue to be welcome with their clients in our traditional territories. If there is a sea kayak company that I have forgotten, please e mail me and I'll add them to my list.

Bad Kayak Companies

These are the companies that are not looked at favourably. They are ones that have done things to try and make First Nations become token Indians who are only needed as items of attraction or convenience. There may be some environmental concerns with their operating practices as well. Be very cautious when choosing who you want to travel into the Johnstone Strait, Broughton Archipelago region. While searching on the web, watch for who comes up first and how they manage this. They may need to concentrate on attracting new customers because past clients have given them poor recommendations and are not booking return trips.

Immediately following were two vertical columns headed respectively “Good Kayak Companies” and “Bad Kayak Companies”. A total of 15 businesses were listed in the former column. By contrast, only three businesses were listed in the “Bad Kayak Companies” column. These were the two plaintiffs and one other business, identified as Pacific Northwest Expeditions.

[21] The website quickly came to the attention of the plaintiffs, who retained counsel. Counsel immediately wrote to the defendants, Sewid and Westergaard, to demand the removal of the plaintiffs’ names from the “Bad Kayak Companies” list, as well as a full retraction and apology. The defendants refused to remove the names which remained on the page in one form or another until the injunctive relief was granted. Mr. Sewid never retracted or apologised for the content. He continues to maintain that, to the extent the statements on the website were based on opinions that he had expressed to Ms. Westergaard, they were fair comment.

[22] That course of events differs from the experience of the third company listed. Brian Collen, the principal of Pacific Northwest Expeditions, also viewed the website. He contacted Ms. Westergaard at the Village Island Tours office about the inclusion of his business on the “Bad Kayak Companies” list. Ms. Westergaard referred him to Mr. Sewid. Mr. Collen’s description of the discussion with Mr. Sewid that followed is revealing.

[23] According to Mr. Collen, Mr. Sewid explained that Pacific Northwest Expeditions was on the list because its customers were not regularly taking the Village Island cultural tours and because Mr. Sewid wanted to use the same camping spot on Compton Island that Pacific Northwest was using at the time. Those reasons for inclusion on the list would not be at all apparent to any reader of the website.

[24] Mr. Collen explained to Mr. Sewid that his clients did not want to take the cultural tours because most were returnees who had taken the tour on an earlier occasion and were looking for a different experience. Mr. Collen also explained that he made the arrangements for his campsite with the Chief and Band Council. He suggested that Mr. Sewid take up his issue with them.

[25] At the end of the conversation, Mr. Sewid agreed to remove Pacific Northwest Expeditions from the “Bad Kayak Companies” list and offered to place it on the “Good Kayak Companies” list. Mr. Collen asked that there be no reference at all to his business on the website. Some time after, Pacific Northwest Expeditions was removed from the “Bad Kayak Companies” list. Pacific Northwest Expeditions never commenced legal proceedings arising out of its inclusion on the list.

[26] Mr. Collen’s evidence was not challenged. I accept it. The evidence strongly supports two inferences: first, that the reasons for naming Pacific Northwest Expeditions to the list were economic rather than attributable to any of the concerns identified on the website; and second, even if Mr. Sewid did not own the webpage, he had sufficient control over it to arrange the removal of Pacific Northwest Expeditions from the “Bad Kayak Companies” list. As will be seen, the evidence that I accept supports similar inferences respecting the plaintiffs’ claims.

[27] According to Mr. Sewid, he has limited formal education, through grade nine, and is not knowledgeable about business matters or technology. His working background is as a commercial fisherman and as a hunting and fishing guide, boat and tour operator. My impression of Mr. Sewid, on the whole of his evidence, is that he is more knowledgeable about business and technology than he admits.

[28] According to Mr. Sewid, Ms. Westergaard owned the website. He denied that he directed her in any way respecting its content. If the former were true, one would expect at least some reference to Ms. Westergaard’s gift shop on the website but there was none. All the advertising is for Mr. Sewid’s businesses.

[29] When the website went online in late February 2005, not only did the content relate entirely to the business interests of Mr. Sewid but his name, along with his cultural and biographical antecedents, figured prominently throughout. In contrast, there was no reference to Ms. Westergaard.

[30] Ms. Westergaard did not testify but it is possible to piece together some historical aspects of the Village Island website in spite of that. I earlier observed that she registered Village Island Tours as a partnership in May 2000. There is no evidence that anyone other than Mr. Sewid, sometimes with a native assistant, conducted the tours. Ms. Westergaard’s involvement was apparently focused on the gift shop and assisting Mr. Sewid with his business. On March 24, 2003, about one year after the partnership dissolved in May 2002, Mr. Sewid filed a declaration of proprietorship for Village Island Tours.

[31] It is likely that Ms. Westergaard registered the domain name villageisland.com sometime during this period. It is possible that she originally intended to use it solely for her own purposes but, even if that was so, the plan changed in 2004.

[32] In early May 2004, around the time that Mr. Sewid chartered a vessel to use as a water taxi, Ms. Westergaard transferred the registration for the domain name villageisland.com to Village Island Tours & Water Taxi. The transfer lists Ms. Westergaard as the administrative contact but there is no doubt that Mr. Sewid operated the water taxi business. About the same time, Ms. Westergaard sent an e‑mail to Mr. Danyliw stating that she had transferred ownership of villageisland.com to Village Island Tours. There is also no doubt that Mr. Sewid operated the tours.

[33] I accept that Ms. Westergaard made the arrangements to transfer the website, and likely paid for the transfer with her credit card, but I do not accept that she continued to be the sole owner of the website. It is much more likely that her further involvement with the website was to assist Mr. Sewid with his businesses.

[34] All the contact information for Village Island Tours displayed on the website, published in late February 2005, including the address, e-mail address and telephone number, relate to Mr. Sewid’s businesses, not to Ms. Westergaard’s gift shop. Copyright for the site was reserved to Village Island Native Cultural Tours, another name for the business operated by Mr. Sewid. Mr. Sewid is, as I have set out, the sole registered proprietor of Village Island Tours.

[35] Finally, Mr. Sewid issued a cheque to a software company in late February 2005. Given the date, the cheque was probably payment for the new website, with its focus on kayaking tours, going on-line.

[36] Mr. Sewid’s evidence respecting the website is improbable at best. He maintained that Ms. Westergaard owned and exercised full control over its content. According to him, he would express his opinions respecting the plaintiffs to her from time to time and she then decided whether or not to publish them on "her" website. That evidence conveniently ignores the fact that the website was all about Mr. Sewid and his businesses, not about Ms. Westergaard and her business.

[37] This raises an obvious question that the defence evidence never addressed. Why would Ms. Westergaard operate a website dedicated solely to the interests of another person except to benefit that person? There is compelling evidence that Mr. Sewid expected to benefit from the website which I will discuss below. The same evidence also satisfies me that Mr. Sewid controlled the website.

[38] Following the publication of the website in late February, numerous e-mails were exchanged. Many of those were sent over the name “Tom Sewid” and contain express or implicit admissions that the author of the e-mail published the statements on the website. Mr. Sewid denied that he authored the e-mails and maintained that such communications are easily forged or altered.

[39] In spite of those denials, I find that Mr. Sewid wrote or dictated the e-mails. The tone and grammar is similar to his manner of verbal communication. The content is highly personal. It is very unlikely that someone else would have drafted the e-mails and sent them in his name.

[40] Mr. Sewid previously admitted under oath at his examination for discovery and during the earlier court proceedings to overturn the default judgment that he wrote many, if not all, of the same e-mails and further admitted on those occasions that the website was his.

[41] Mr. Sewid explained that the differences between his past and present evidence stemmed from his lack of familiarity with the court environment and the content of the documents as well as the manner in which counsel conducted the cross-examination. According to Mr. Sewid, counsel unfairly pressed him resulting in confusion. Mr. Sewid expressed similar complaints about the conduct of counsel during his cross-examination at trial. There was nothing unfair about the manner of cross-examination at trial.

[42] Mr. Sewid swore an affidavit before trial in the presence of his then lawyer. In one paragraph, he referred to “my website” although elsewhere in the same affidavit, he deposed that Ms. Westergaard owned and operated the website at her discretion. Mr. Sewid attempted to explain the inconsistency between his evidence at trial and the reference to “my website” by stating that he did not wear his reading glasses when he reviewed the affidavit before swearing to it so he was unaware of it. While I did not find that explanation satisfactory, I have nonetheless placed little weight on the discrepancy.

[43] The affidavit is 63 paragraphs in length and it is possible that a drafting error went unnoticed at the time. I observe that the balance of the affidavit is consistent with Mr. Sewid’s contention at trial that he did not own or control the website. While it is possible that the truth crept into the single paragraph of the affidavit put to Mr. Sewid in cross-examination, I doubt that it was intended.

[44] Finally, Andrew Jones, the principal of a business listed on the website in the “Good Kayak Companies” column, testified that Mr. Sewid offered to link from the website to his business in the spring of 2005. That evidence was not challenged.

[45] I do not accept the evidence of Mr. Sewid. Instead, I find that Mr. Sewid owned and controlled the villageisland.com website for his own economic benefit. I also find that he wrote the e-mails at issue.

[46] The e-mails disclose that Mr. Sewid, in publishing the “Bad Kayak Companies” list, intended to punish the plaintiffs for not continuing to do business with him. The following extracts are examples:

1. February 25, 2005 to Mr. Arcese:

Read this carefully, think it through, and maybe if we speak man to man, we can both end this war and concentrate on what we should be doing – giving our clients what they want.

…

Two days have passed since my new web site went on line, and I am amazed at the amount of bookings and queries I have been getting. Many want to know about my review page, and when I educate them they turn around and book with me. Whiteman’s magic, the Internet. All I am doing is educating perspective clients about what they really want. It also shows the many companies I cooperate with. It does show a few companies that are not what British Columbia tourism should be based upon.

…

The bottom line is stay away from my people’s traditional territories or find a way to work with me.

…

Remember Goliath was taken down by one lone man. I will not be intimidated, lied to, and have monies owed to me withheld for someone else’s personal gain. My stone is a little thing called a kayak review page. The stone can be mighty as I have seen these last two days. Wednesday my new web site was launched, and like the stone from the bible it is mighty. Even I cannot believe how much positive the page has created. Perspective clients, and I mean the real ones David, are contacting me. So much so, I may well be up until the wee hours of the morning answering their questions and concerns.

2. March 9, 2005 to Mr. Arcese:

Brian Colins is off the review list because he showed integrity and came up with a plan so that we may be able to work together and move foreword positively. Maybe you should follow in his footsteps instead of trying to damage my company that feeds my family. Don’t even begin to whine about why you are on the list. If you paid your bills and took the time to work with Village Island Tours instead of trying to destroy it, you might be held in high regard as your company once was. When you take positive steps to fix the wrong, I will take steps to see your company removed from the review list. Lashing out with the e-mails and phone calls is not a positive step to ending what is going on.

3. March 15, 2005 to Mr. Amos (Aboriginal Tourism British Columbia) and Mr. Arcese:

…

If anyone questions my review page, and I ask all you directors to look at my web site. Think about wine reviews, movie reviews and restaurant reviews. If it is good for non-Natives, why is such a stink coming out a First Nation kayak review? I have stated that all they have to do is be man enough to sit at my fire and come up with a plan to cooperatively work with my operations. If they do not, then announce that they are not coming into Mamalelaqala Qwe’Qwa’Sot’Em traditional Territory. There are many other kayak companies that are and they are working cooperatively with my tour operations. There always is a place called common ground. The challenge is can they come and find it with me?

In looking at the letter these two sent to A.T.B.C. and what they put on it from my web site, it shows that they are troubled by what I have them listed in. These are the only two companies in 18 years of operating in the tourism industry that have tried to financially harm my operations. They wonder why they are on this list. …

If you sit at a computer anf type things in like you want to whale watch, paddle in B.C., bear watch, kayak and so forth you will find that these two companies come up the most. Hats off to good web placement, but too good of a thing is a bad thing. These two are so blind in their ambition to be on top of the kayak hill that they do not see they are pissing many tour operators off. They are making it look in cyber-world that they are the only two companies out there offering trips in B.C. Look at how they are pushing aboriginal tour companies so far back, that most are non-existant. This little ole Indian made a review page that is honest Injun and now accountability kicks in. My my what have I done? I have only told the world the truth – buyer beware. Is that a crime?

Well, I can bet dimes to dollars that these two will try and bring me to court next. Bring it on, this aboriginal knows I have the dice in my favour. If you really look at the whole fiasco, Turtle Island and other First Nations web sites would love the story. I am only standing up for Native rights. The right to operate my company within my traditional territory and have the same fair advertising field as everyone else. Why should I be back benched by seasonal immigrant tour companies like these two, that do not want to work with me. We First Nations have rights that precede any other in our traditional territories, and I am going to stand up for all First Nations.

It is apparent that Mr. Sewid authorized the creation of the “Bad Kayak Companies” list because he wanted to punish and remove the competition. This permitted him to take better advantage of the eco-tourism opportunities in the Broughton Archipelago. It is apparent that Mr. Sewid felt aggrieved but there is little in the e-mails otherwise to explain the reasons for the “Bad Kayak Companies” listing.

[47] In the e-mail to Aboriginal Tourism British Columbia, Mr. Sewid explained his complaints about Northern Lights insofar as native culture is concerned, as follows:

Let us as directors remember how we have met on numerous occasions and stated that we must have integrity and authenticity in our aboriginal operations in the tourism industry. I ask all of you to look at Northern Lights Expeditions web site. You will find a company that is marketing an aboriginal component to their tours. At least it seems that way with all the wall paper of and aboriginal orca design and paddle blades with an aboriginal image. Then there is the links to the Namgis Nation and U'mista Cultural Center. In my records there is a sticker with an aboriginal raven design and kayak in the pupil of the ravens eye. On the bottom of the sticker is the contacts for Northern Lights Expeditions. David has known for sometime that the aboriginal image sells seats.

Remember this is the man that nagged my band in the late 1980s for clean up to be done to Village Island so that his clients had a safe clean place to walk. He even stated that he would clean the village up, but the band said absolutely not! No non-band member would ever disturb things in our abandoned village site. I was sent to do the clean up and be the watchman. One day I put on my regalia and told our story and my tour path in life was born. Northern Lights was great, they would eventually pay me for my narrations.

I grew and so did my company. David paid me later and later each season end, and I noticed he was turning. In the winter of 1999 I had no check from Northern Lights Expeditions. I even called and I was given that it is in the mail routine. Kathleen and I drove to Bellingham where David's office is, and unannounced we walked in. Boy, you should have seen how quick he pulled out his check book! We even got taken out for Sushi dinner that night.

David stays on our Indian reserve, at least he did until he moved last year July 22nd and forfeited his right to stay on our island. He went so far as to set his camp up on our Indian reserve and bring his clients to and from the island with a non-native water taxi company. Knowing full well I have a new one with the great orca designs painted along the sides. He was rubbing my face in something? You see, if it smells like @!&%, it is probably @!&%. It is one of the most disrespectful things to do, staying on someone's Indian reserve for your financial gain and not offering to at least ask for a request for proposal to transport kayak clients by a band member that has a new water taxi. It is like me taking clients to Alert Bay and hiring a non-native guide to walk them through the island and tell the First Nations story instead of Lillian Hunt with her tour operation. Plain and simple it is disrespect!

A token Indian is someone that allows themselves to be used for a non-natives companies client landing abilities without socially or economically benefiting themselves. It is smiling and gaining nothing and doing nothing as non-native companies financially gain from your presence. It is your culture and heritage making money for non-native companies and the First Nation has no gain. It is called false advertising in the non-native world, and I ask each and everyone of you to phone and make Brian and David stand up for what they are advertising. They both are using aboriginal, first nation, traditional sites, and other words that describe kwakwaka'wakw, but where is the component? It is nothing more than acting like you are being nice nice to the Indians for your financial gain.

The foregoing relates primarily to Northern Lights although there are sufficient references to Mr. Danyliw (Brian) to conclude that it relates to Wego as well.

[48] Before the termination of their business relationship, Mr. Sewid and Mr. Danyliw had a close relationship. In April 2004, Mr. Sewid signed a letter of support for Wego’s land use applications within the Archipelago. The content is difficult to reconcile with Mr. Sewid’s evidence that Wego had been culturally insensitive or environmentally irresponsible.

[49] The letter, under the letterhead “Village Island Tours & Water Taxi”, in its entirety, reads:

Re: Support for land use applications by Brian Danyliw and We Go Kayaking

We have worked closely with Brian and his operation since 2001 and have found that his practices are both ethical and respectful. He has actively considered cultural and environmental issues within my people's traditional territory through these and other steps:

1. Consultation with myself and other First Nations in the area while planning any and all activities and including the appropriate First Nations people in all work undertaken within their traditional territories. Brian has protected and respected all archeologically significant sites on which he has operated and demonstrated that he is doing so by hiring affected First Nations to work on these sites.

2. Honoring First Nations' continued rights to support themselves within their traditional territories by contracting First Nations companies and individuals for needed services.

3. Shown respect for First Nations history and culture by ensuring that all trips include education about the Kwakwaka'wakw people by the Kwakwaka'wakw whose ancestors created the areas archeologically significant sites. Brian is helping us to inform the world about the native culture in a manner that respects current and past First Nations governance.

4. Most importantly, Brian understands that First Nations people have never given up their rights to live and support themselves within their traditional territories and shows myself and other Native people the respect that is due from a guest to their host. He also understands that I and many other Native people are interested in sharing the land and waters for our mutual benefit.

Therefore, I strongly support any and all applications that Brian Danyliw makes to use so called "crown land" as long as he continues to follow this respectful path. If you have any questions or require further information, please give me a call.

Halla kas la

(Go in peace)

[50] While Mr. Sewid acknowledged signing the letter, he contends that it constituted an agreement which Mr. Danyliw breached. The letter is not an agreement nor is it readily apparent why Mr. Sewid claimed it was.

[51] Mr. Sewid did say in the letter that his continuing support for Wego applications was contingent on Mr. Danyliw continuing “to follow this respectful path” but Mr. Sewid never withdrew his support during the business relationship. Mr. Danyliw, not Mr. Sewid, decided to end the business relationship. Instead, Mr. Sewid’s description of the breach of agreement appeared referable to the later posting of a copy of the letter on the Wego website.

[52] Mr. Sewid contended that Wego misused the letter by posting it. He testified that he first found a copy posted on the website in the fall of 2004. Implicit in his evidence, and explicit in his final argument, was the contention that the inclusion of the letter exploited him and his culture in that he and Wego were no longer doing business. That evidence was proffered in support of the defence of fair comment but it does not assist Mr. Sewid because Wego did not post the letter to its website until after the publication of the “Bad Kayak Companies” list.

[53] According to Mr. Danyliw, he did not post the letter until March 2005. He testified that he only did so, at that time, in an attempt to offset some of the damage that he attributed to the inclusion of Wego on the “Bad Kayak Companies” list published in late February 2005. He did not, in any way, resile during cross-examination.

[54] During final submissions, Ms. Westergaard, on behalf of Mr. Sewid, contended that Mr. Danyliw expressly admitted during cross-examination that he posted the letter in 2004. A review of the transcript reveals that the topic arose twice in cross-examination. On the first occasion, Mr. Danyliw denied the suggestion that he posted the letter before the creation of the kayak review page. The second sequence of questions and answers was as follows:

Q The support letter you posted, Brian, in 2004 was not in self-defence, was it?

A What do you mean exactly?

Q The support letter you posted in 2004 was not in self-defence? Stated, didn't you, yesterday that it was in self-defence why you posted it?

A Yeah, I was trying to counter some of the issues that you were purporting on your website.

Q That was the case, you would've removed it after the review page was taken down, wouldn't you?

A Not necessarily. The case is ongoing.

Q You say that letter of support is still on your website.

A Yes.

Q Because of this court case I've been peeking into websites when I get a chance when I'm on Vancouver Island. I haven't seen it, but you say it is posted on your website right now?

A Yes, it is.

Q I go to those things up top that you hit and brings up pages. What do you call those?

A Buttons?

Q Pardon me?

A Buttons? Links?

Q Links, yeah, and then I go to the bottom of the pages and you have where all the letters are written in blue and you hit those and you go to another page. What are those called?

A Links.

Q Links. I've gone to all those and I can't find the letter, like in the last week. You say it is posted on your website still.

A It's there.

Q Why is it on there?

A This case is ongoing.

Q What is it showing people by having that letter on there?

A It's showing that at that point in time you gave me your support.

Q At that time. What benefit is it doing it now with no support, neither one of us support one another now?

A I don't know how many people have seen your site. I don't know how many people have your site in the past and have gone into our site and are looking at it. I honestly don't know what the level of damage is that your website did to our business. I know it's significant. Hence, I have a letter posted up there from you saying that at a point in time you did support our operations.

The preamble to the first two questions is, in effect, “the support letter you posted in 2004” but the questions concerned the reasons for posting, not the timing. Mr. Danyliw testified each time when asked directly that the posting was in 2005 not 2004. It is also apparent that the references in the questions to “self-defence” related to Mr. Danyliw’s earlier evidence that the posting was a response to the publication of the “Bad Kayak Companies” list in February 2005. I do not accept that Mr. Danyliw admitted or adopted the suggestion in the preamble to the questions that the posting was in 2004.

[55] I prefer Mr. Danyliw’s evidence over that of Mr. Sewid. I accept that the support letter was posted to the Wego website in response to the publication of the villageisland.com website in February 2005.

[56] At trial, Mr. Sewid also explained the basis for environmental concerns about the plaintiffs’ operations. During direct evidence, Mr. Sewid listed a number of incidents that he said supported an opinion that there “may be some environmental concerns with [the plaintiffs’] operating practices”. I paraphrase them as follows:

Northern Lights:

1. Lack of knowledge or failure to apply knowledge respecting potential contact with wild animals;

2. Setting up an outhouse on Compton Island with a non-biodegradable seat and tarp;

3. Locating pit toilets too close to the beach head and leaving human waste untreated in pit toilets;

4. Removing stones from beaches to create kayak runs; and

5. Including too many people in a kayak fleet (up to 16) resulting in midden erosion and damage to areas cleared for tents and camping.

Wego:

1. Flushing toilets into small bays with inadequate current flow;

2. Removing stones or boulders from beaches;

3. Abandoned debris at Maggy Point campsite;

4. Boom stocks under float-house at Maggy Point rubbing on tidal flat area at low tide;

5. Tent platforms constructed in environmentally sensitive area; and

6. Trees cut down.

While the statement “There may be some environmental concerns with their operating practices as well” appeared on the website, none of this information was included or referenced. I will address the implications of that later when I discuss the defence of fair comment.

[57] Little attempt was made in cross-examination of either Mr. Danyliw or Mr. Arcese to establish that these events occurred. Mr. Danyliw admitted that his floating lodge was tied below the high tide mark. He admitted that sewage was flushed directly into the ocean. He agreed that Wego did not clean out pit toilets at the end of the season. Mr. Arcese admitted that a cougar attack took place during a 2002 trip.

[58] To the extent that Mr. Sewid had environmental concerns, it appears that he did little, if anything, about them at the time. There is no evidence that he ever involved himself in any formal regulatory process other than to provide Mr. Danyliw with the April 2004 letter of support referred to above. It will be recalled that Mr. Sewid stated in the letter that Mr. Danyliw had “actively considered cultural and environmental issues within my people’s traditional territory”.

[59] Further, there was no direct evidence to contradict the assertions of both Mr. Danyliw and Mr. Arcese that they obtained permission from the Band Council. Mr. Collen described a similar arrangement for his business.

[60] I accept the evidence of Mr. Danyliw and Mr. Arcese that they obtained all necessary permissions to use the various sites for the purpose of their businesses. While permission, in the case of the Band Council, was granted informally, there is no evidence that the plaintiffs did not abide by the terms.

[61] Mr. Danyliw obtained the necessary approvals and licenses for the various Wego floating lodge sites, foreshore, and campsites on Crown Land, from the Federal and Provincial authorities. He also obtained permission from the Band Councils for camp sites on reserve land. So did Mr. Arcese on behalf of Northern Lights. Both companies paid the Band Council for the camping privileges each year although there were never any formal leases in place.

[62] In the next section of my judgment, I will identify the legal principles applicable to proof of defamation, the defence of fair comment and finally, to the assessment of damages. Counsel for the plaintiffs relied extensively on a written submission with respect to proof of defamation and the defence of fair comment. Mr. Sewid did not address the law to any extent.

[63] The plaintiffs' written submission sets out the legal principles said to be applicable. It was of limited assistance. For the most part, the submission repeated verbatim, without attribution, lengthy extracts from the text Canadian Libel and Slander Actions (Toronto: Irwin Law, 2004). While that text is generally accurate, it is not entirely so. Many of the references to authority in the text appear inaccurate and those errors were carried forward into the submission. In the result, I find it unnecessary to discuss many of the authorities referenced to in the submission.

[64] The tort of defamation presents a contest between two deeply-held values of Canadian society: freedom of expression and the individual’s right to his or her good name. The Supreme Court of Canada recognized this tension in Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130. In affirming the importance of the former, the Court noted, “without this freedom to express ideas and to criticize the operation of institutions and the conduct of individual members of government agencies, democratic forms of government would wither and die” (para. 101). However, the Court pointed out that this freedom has never been absolute (para. 102).

[65] Regarding the individual’s right to protection of his reputation, the Court stated, at paras. 107-108:

[107] The other value to be balanced in a defamation action is the protection of the reputation of the individual. Although much has very properly been said and written about the importance of freedom of expression, little has been written of the importance of reputation. Yet, to most people, their good reputation is to be cherished above all. A good reputation is closely related to the innate worthiness and dignity of the individual. It is an attribute that must, just as much as freedom of expression, be protected by society's laws. In order to undertake the balancing required by this case, something must be said about the value of reputation.

[108] Democracy has always recognized and cherished the fundamental importance of an individual. That importance must, in turn, be based upon the good repute of a person. It is that good repute which enhances an individual's sense of worth and value. False allegations can so very quickly and completely destroy a good reputation. A reputation tarnished by libel can seldom regain its former lustre. A democratic society, therefore, has an interest in ensuring that its members can enjoy and protect their good reputation so long as it is merited.

These principles inform the law of defamation.

[66] To make out a claim for defamation, the plaintiffs must prove, on a balance of probabilities, that the defendant published or caused to be published comments about them that were defamatory: see Home Equity Development v. Crow, 2004 BCSC 124, at para. 86. There is no question here that the impugned statements concern the plaintiffs. The two questions for determination are whether the statements were defamatory, and whether Mr. Sewid published them or caused them to be published. If defamation is proven, the onus then shifts to the defendant to prove a valid defence.

[67] Statements are defamatory where they have the tendency to lower the reputation of the plaintiff in the estimation of other members of society: see Brown, The Law of Defamation in Canada, 2d ed. (Toronto: Carswell, 1999) at 4-20. Here, Wego and Northern Lights say that the impugned statements were defamatory based on the “natural and ordinary meaning” of the words. The test for “natural and ordinary meaning” looks to the meaning that a reasonable person, with an ordinary person’s general knowledge, would give to the statement within the statement’s context. See Hodgson v. Canadian Newspapers (1998), 39 O.R. (3d) 235 (Gen. Div.), at 253, rev’d on other grounds (2000), 49 O.R. (3d) 161 (C.A.).

[68] I find all of the impugned statements to be defamatory on the “natural and ordinary meaning” test. All would likely injure the business reputations of both plaintiffs.

[69] Typically, a publication of a libel occurs when a defamatory statement is communicated to a third party. Also, as set out in Gatley on Libel and Slander, 10th ed. (London: Sweet & Maxwell, 2004), at 171:

At common law every republication of a libel is a new libel and, if committed by different persons, each one is liable as if the defamatory statement had originated with him.

The question of republication in the internet context raises interesting issues, particularly where there is a limitation issue, that the Court of Appeal recently addressed in Carter v. B.C. Federation of Foster Parents Association, 2005 BCCA 398. No such issue arises here. I need not directly address the question of republication.

[70] Here, the real question is whether Mr. Sewid was involved in the communication of the defamatory statements to third parties by means of the internet website rather than one of republication. The length of time that the statements were available for viewing on the internet is significant only on the question of damages flowing from any such involvement and need not be addressed further at this point.

[71] If more than one person is involved in a libel, all participants are jointly liable. As the Court stated, at para.176, in Hill:

[176] It is a well-established principle that all persons who are involved in the commission of a joint tort are jointly and severally liable for the damages caused by that tort. If one person writes a libel, another repeats it, and a third approves what is written, they all have made the defamatory libel. Both the person who originally utters the defamatory statement, and the individual who expresses agreement with it, are liable for the injury.

The English Court of Appeal considered joint liability in libel in McDonald’s Corp. v. Steel, [1999] E.W.J. No. 2173 (C.A.) (QL). At para. 195, the court approved the test set out by the trial judge:

[195] As a matter of law, any person who causes or procures or authorises or concurs in or approves the publication of a libel is as liable for its publication as a person who physically hands it or sends it off to another. It is not necessary to have written or printed the defamatory material. All those jointly concerned in the commission of a tort (civil wrong) are jointly and severally liable for it and this applies to libel as it does to any other tort.

This test is appropriate here and I have applied it in my consideration of Mr. Sewid’s involvement in the tort.

[72] Mr. Sewid denied publishing any of the statements but I did not accept his evidence. I am satisfied that he was involved. His participation included formulating, then communicating, authorizing and approving the publication of the statements by Ms. Westergaard on the website. It matters not that Ms. Westergaard may have been the person who actually posted the statements to the website. I am satisfied that the plaintiffs have each proven that Mr. Sewid caused to be published statements on the website about them that were defamatory. The onus shifts accordingly to Mr. Sewid to establish a defence.

[73] Mr. Sewid invokes the defence of fair comment. Our Court of Appeal set out the three elements of fair comment in Vander Zalm v. Times Publishers (1980), 18 B.C.L.R. 210 (C.A.), at 213. They are:

1. The matter must be recognizable to the ordinary reasonable man as a comment upon true facts, and not as a bare statement of fact;

2. The matter commented upon must be one of public interest; and

3. The comment must be “fair” in that it must “represent an honest expression of the real view of the person making the comment”.

[74] Mr. Sewid bears the onus of proving each element of the defence. There is one more important aspect to the defence. The defence of fair comment may be lost if the plaintiff can prove that the statement was made maliciously.

[75] Mr. Sewid need not prove that his comments were true but he must show that they were comments rather than statements of fact. Distinguishing between comment and fact is frequently difficult. An oft-cited example of this difficulty may be found in Barltrop v. Canadian Broadcasting Corp. (1978), 86 D.L.R. (3d) 61 (N.S.C.A.(A.D.)), at 73:

The vital distinction is pointed up by Ferguson, J., in Myerson v. Smith’s Weekly Publishing Co., Ltd. (1923), 24 S.R. (N.S.W.) 20 at p. 26, quoted by Fleming, supra, at p. 512:

To say that a man’s conduct was dishonourable is not comment, it is a statement of fact. To say that he did certain specific things and thus his conduct was dishonourable is a statement of fact coupled with a comment.

This distinction is fundamental. An assertion of fact can never be defended as fair comment. See also Ross v. New Brunswick Teachers’ Association (2001), 201 D.L.R. (4th) 75 (N.B.C.A.), at para. 55.

[76] The test for distinguishing between fact and comment is whether the ordinary reasonable person could recognize the communication as a comment based on true facts, rather than a bare statement of fact.

[77] The comment must also be based on a foundation of true facts. Such a foundation allows for the comment’s reader to arrive at his or her own conclusion regarding the author’s ultimate opinion. These true facts must be distinguishable from the comment itself, either through the author’s express presentation of the facts or through their being well-known to the reader: Barltrop at 73.

[78] Absent a proper factual foundation, the defence of fair comment will fail. In McDonald’s Corporation, at para. 591, the English Court of Appeal concluded that:

Bare statements, which are not obviously capable only of being expressions of opinion, will usually be statements of fact. The same such statements may be comment, if there are also facts stated or indicated upon which the statements are comment. The defence will fail if the facts upon which the statements are comment are not shown to be sufficiently true to support the comment as objectively fair.

[79] On the question of malice, Mr. Sewid’s comments must not contain any imputation of corrupt or dishonourable motives on the party whose conduct is criticized unless such imputations are warranted by the facts. See Vogel v. Canadian Broadcasting Corp., [1982] 3 W.W.R. 97 (B.C.S.C.) at 173. Malice deprives any comment of the necessary element of fairness.

[80] To be fair comment, the comment must engage the public interest. The courts have generally interpreted that broadly. See Reynolds v. Times Newspapers, [1999] 4 All E.R. 609 (H.L.) at 614-615.

[81] Finally, the test for whether an impugned comment is fair and honest consists of both objective and subjective elements: Cherneskey v. Armadale Publishers, [1979] 1 S.C.R. 1067. To be objective, the comment must be fair in the sense that a person could honestly express the opinion based on the proved facts (at 1100). As set out in Defamation Law in Canada, at 15-80:

The test is whether any person, “however prejudiced and obstinate, could honestly hold the view expressed by the defendant.” In other words, on the basis of the proved facts, could a fair-minded person honestly express that opinion?

Concerning the subjective part of the test, the Court in Cherneskey (at 1086-87) concluded that the publisher of the comment must subjectively believe the comment to be true.

[82] The defence of fair comment fails in the present case for the following reasons.

[83] With the possible exception of the reference to “possible environmental concerns with their operating practices”, the statements were presented as facts rather than as comment based on true facts. Even if any might be interpreted as comment, the website did not include any substratum of fact in support. This includes the statements referring to the possible environmental concerns. In the result, the reader had no means of assessing the comment.

[84] I have also found that Mr. Sewid published the defamatory comments to injure the plaintiffs’ businesses and to gain an economic advantage. In my view, Mr. Sewid acted maliciously. This alone is sufficient to deprive him of the defence of fair comment. For all these reasons, Mr. Sewid failed to establish the defence of fair comment.

[85] I turn next to the question of damages. I will start with the applicable legal principles and then discuss the evidence respecting damages.

[86] Once libel is proved, harm to the plaintiff’s reputation is presumed. The plaintiff need not prove general damages. See Home Equity Development, at para. 155. The appropriate amount of general damages depends on the precise circumstances of the case. The court usually considers factors such as the nature and circumstances of the publication of the libel; the nature and position of the victim of the libel; the possible effects of the libel statement upon the life of the plaintiff; and the actions and motivations of the defendants. As each libel case is unique, there is little to be gained from a detailed comparison of libel awards. See Hill, at para. 187.

[87] General damages are intended to provide comfort for personal distress and to vindicate one’s reputation, including one’s business reputation: The Law of Defamation in Canada at 25-16.

[88] In this case, both plaintiffs are corporations rather than human beings. Corporations are incapable of suffering personal distress and may not receive general damages under that particular head. The plaintiffs may only receive damages for injury to their business reputations.

[89] Proof of general economic loss may demonstrate injury to a business’s reputation. In Walker v. CFTO Ltd. (1987), 37 D.L.R. (4th) 224 (Ont. C.A.), the leading case on corporate libel damages, the Ontario Court of Appeal held that corporations generally should not receive large awards for loss of reputation, unless economic loss is also shown. The court relied, in part, on Lewis v. Daily Telegraph Ltd., [1963] 2 All E.R. 151 (H.L.), at 156:

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.

In Lewis, the court went on to say that such injury could include goodwill, as well as loss of income.

[90] In Brown v. Cole (1998), 61 B.C.L.R. (3d) 1 (C.A.), at para. 107, the British Columbia Court of Appeal included within general damages “social damage and possible economic damage which may result but which cannot be expressly proven.” Southin J.A. went on to assert that this aspect was “particularly important, in my opinion, in defamation in the mass media.” In my opinion, the potential audience reach creates a parallel between multiple internet publications and publications in the mass media.

[91] The Court of Appeal applied Brown in Pressler v. Lethbridge (2000), 86 B.C.L.R. (3d) 257, to uphold a defamation award of $50,000 for damage to a pharmacy career. See Pressler, at paras. 93-94.

[92] I observe that general economic loss may also be an independent head of general damages, along with injury to the plaintiff’s reputation and injury to the plaintiff’s feelings: Hubert v. DeCamillis (1963), 41 D.L.R. (2d) 495 (B.C.S.C.), at 510‑11. This is important when a plaintiff establishes economic loss but without sufficient precision to support a claim for special damages. A claim for special damages, on the other hand, requires more specific proof.

[93] A corporate plaintiff may also claim special damages for specific economic loss that was caused by the defamation. Special damages, unlike general damages, are not presumed. The plaintiff must allege and prove special damages at trial. Such losses must be the “natural and proximate result” of the defamatory publication, and capable of monetary measurement. Such losses must also be established with “reasonable certainty” and must be more than mere “speculation and surmise” (Law of Defamation in Canada at 25-24, 25-156).

[94] Special damages are exceptional in defamation cases because it is usually difficult to ascertain the extent of the damage to one’s reputation. See Hodgson v. Canadian Newspapers Company Ltd. (2000), 49 O.R. (3d) 161 (C.A.), at paras. 67‑69.

[95] There are two other categories of damages to consider in defamation cases: aggravated and punitive, or exemplary, damages. The plaintiffs pleaded both here. Corporate plaintiffs cannot receive aggravated damages because aggravated damages are intended to compensate for mental distress and hurt feelings: see Walker at 233. In Pinewood Recording Studios Ltd. v. City Tower Development Corp. (1998), 61 B.C.L.R. (3d) 110 (C.A.), an action brought in nuisance, negligence and trespass, the British Columbia Court of Appeal agreed with this principle. The court concluded, at para. 72, that:

It is very doubtful that aggravated damages can be awarded to a corporation, given that the purpose of such damages is to compensate for intangible injury such as mental distress or hurt feelings resulting from the wrong in question…It is difficult to see how a corporation can have injured feelings, as distinct from loss of business reputation or character.

[96] Plaintiffs’ counsel relied on Home Equity Development in support of the claim for aggravated damages but, in that case, there was a personal plaintiff as well as the two companies that he controlled. It is clear from the analysis of aggravated damages that the award of aggravated damages related to the impact on the individual plaintiff’s reputation rather than to his businesses. See paras. 163 – 174.

[97] The principals of the plaintiff companies are not parties to this proceeding. Accordingly, I decline to award aggravated damages.

[98] Punitive damages, on the other hand, are available to a corporate plaintiff. Punitive damages are awarded against a defendant in exceptional cases for “malicious, oppressive and high-handed” misconduct that “offends the court’s sense of decency”. See Hill, at para. 196. Unlike compensatory damages, punitive damages are to punish the defendant rather than to compensate the plaintiff: see Whiten v. Pilot Insurance, [2002] 1 S.C.R. 595, at para. 36.

[99] The test for punitive damages is whether the defendant’s conduct “represents a marked departure from the ordinary standards of decent behaviour” (Whiten at para. 36). Punitive damages should only be awarded where the compensatory damages are insufficient to achieve the objectives of punishment and deterrence: see Hill at para. 196. Punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of misconduct, the relative vulnerability of the plaintiff, and any advantage or profit gained by the defendant (Whiten at para. 94).

[100] In the present case, the plaintiffs claim damages for lost revenues (special damages), general damages and aggravated damages. Both abandoned, albeit conditionally, their claim for exemplary, or punitive, damages. But, as I set out above, the plaintiffs as corporations are not entitled to aggravated damages. Accordingly, I propose to consider their claims for general and special damages, and then consider whether to award punitive damages.

[101] Counsel for the plaintiffs submitted that Wego suffered a revenue loss of $259,000 as a direct consequence of the defamation and that, in addition, a fair and reasonable award for general damages is $100,000. The business is now for sale. Wego contends that it will not be able to recover any significant amount for goodwill in light of the damage attributable to the defamation. This, in effect, according to Wego, is the measure of damage to the reputation of the company. In argument, counsel suggested that the awards sought would satisfy the need to punish Mr. Sewid and obviate any need for punitive damages.

[102] Counsel further contended that Northern Lights suffered a proven economic loss of $198,000 based on the calculations of Mr. Arcese referred to below. As to general damages, Northern Lights contended that the loss of goodwill has been about $100,000 to date. Finally, it took the same position as Wego respecting its claim for punitive damages. On this basis, Northern Lights sought a total award of $298,000 excluding its additional claim for aggravated damages.

[103] I did not find the evidence of economic loss sufficiently complete or reliable to accept the economic loss calculations of either plaintiff. Nor did I accept their calculations of the loss of goodwill. In each case, the principal of the company relied on limited factors to calculate past and projected losses. The underlying financial data was incomplete, particularly for Northern Lights, and, in any event, expert evidence would be required to accept the reliability of the conclusions. While the principals tried their best, in each case, the approach was demonstrably simplistic and failed to take into account obvious factors.

[104] Northern Lights was well established before 2005. It not only operated a kayak fleet but also operated a cruise vessel, the Spirit Bear, in the same general area. This duality created difficulties in assessing the reliability of the financial evidence and summaries presented because the expenses for operating the Spirit Bear must differ significantly from the expenses of operating the kayak fleet. I am not persuaded that the Profit and Loss Comparison or the information summaries in evidence adequately delineated between the two aspects of Northern Lights' business.

[105] Wego, on the other hand, was still a relatively new company in 2004 and made a profit for the first time that year, albeit a minimal one. Leaving aside the obvious difficulty in determining the economic loss for a fledgling business, the records show a steady increase in business before the publication of the villageisland.com webpage in February 2005. Following publication, Wego then sustained a significant net loss in 2005. The 2005 loss was almost double the previous loss in 2003.

[106] I turn below to the evidence in more detail.

[107] The financial statements for Wego showed the following pattern starting with a net loss: 2003 - ($16,088); 2004 - $7,195; 2005 - (30,166). Comparative sales figures are in evidence. For the period, 2002 to 2005, gross sales were $90,927, $131,096, $210,395 and $138,608 respectively. This evidence suggests that whatever ground Wego gained by 2004, it significantly lost in 2005. According to Mr. Danyliw, sales grew 65 per cent between 2002 and 2003; another 62 per cent between 2003 and 2004; and in 2005, sales dropped 18 per cent. Wego did not tender any evidence of sales figures for 2006.

[108] Mr. Danyliw testified that the client base for each of the years 2002 to 2006 were as follows: 2002 - 78; 2003 - 129; 2004 - 209; 2005 - 171; and 2006 - 140.

[109] Using 209 as a little more than break even point, it is apparent that the decline in 2005 carried through to 2006.

[110] I accept that Wego sustained a loss in 2005 and likely sustained a further loss in 2006. Mr. Sewid contends that is inconsistent with Wego’s own in-house financial projection as at July 31, 2006. That document projected a profit for 2006 but the author assumed 172 guests for the year which never came to pass. Accordingly, the projection was just that, a projection.

[111] Calculating the Wego loss is difficult. Mr. Danyliw estimated the “financial loss” at about $189,000. He did not explain that estimate. Mr. Danyliw did not expressly factor in costs so it appears the estimate was the loss of gross sales. By my calculation, Wego would not have achieved additional gross sales of $189,000 in 2005 even if growth had continued uninterrupted. It follows that it could not have achieved net sales in that amount.

[112] I do not accept Mr. Danyliw’s estimate of loss. It was not sufficiently complete or helpful. I am not persuaded that any reliable estimate of past loss attributable to the publication of the web page is possible on the evidence.

[113] Northern Lights relied on a summarized profit and loss comparison for 2004 to 2006. That document did not break down the income and expenses between the kayaking fleet and the operation of the Spirit Bear. Nor did it attribute commission income to the year in which it was earned rather than received.

[114] Northern Lights also relied on a summary showing the number of kayaking guests and total income. That summary shows: 2004: 332 guests - $381,647.46; 2005: 226 guests - $295,701.25; 2006: 280 guests - $355,288.52. While it is apparent that the number of guests declined in 2005 and then regained substantial ground in 2006, the summary also notes that the 2004 number was less than the previous year. I am also unable to determine the net loss to the kayak operation from either of the summaries.

[115] I do not accept that the loss of potential bookings and consequent economic loss can be calculated with any reliable precision. Mr. Arcese attempted to do so, based on existing Northern Lights records, but I am not persuaded that the process produced a reliable result. I do not accept his calculations in that regard.

[116] I decline to award special damages to either plaintiff.

[117] Even though I cannot determine the plaintiffs’ respective economic losses with any precision, I am entitled to take the losses into account in fixing general damages. General damages for defamation may have an economic component even though it is incapable of precise quantification. Further, I am satisfied that, in each case, the bookings declined following the initial publication of the defamatory comments. I also accept these other important factors.

1. The downwards spike in guests for both plaintiffs in 2005 was attributable to the publication and republication of the villageisland.com website. There were no other identifiable factors to explain such a drop within weeks after the website came online.

2. Wego would have continued to grow at about the same rate as it had the previous two years. Nonetheless, it is apparent that 2004 was little more than a break even year. It is unlikely that it would have made a significant profit in 2005 and 2006 even if there had not been a defamatory publication.

3. Northern Lights made a reasonable decision at the end of the 2005 season to plan fewer trips for 2006 than in 2004. This was because Northern Lights had to commit to and pay most of the costs at the beginning of the season. Northern Lights had to modify its business plan for 2006 by committing to fewer kayaking trips because it did not then know how long the website would remain in operation. Accordingly, I do not fault Northern Lights for operating at less than full capacity in 2006.

[118] I also accept that much of the bookings in any given year in the eco-tourism business come from returnees or persons referred by past guests. I take into account that there was a loss of opportunity to obtain business and future goodwill that will carry somewhat forward into the future.

[119] Taking into account all the factors set out, I award Wego general damages of $100,000 and Northern Lights general damages of $150,000. This leaves the question whether the compensatory damages are sufficient to achieve the objectives of punishment and deterrence. With that in mind, I turn to the question of punitive damages.

[120] I take into account that the publication was malicious. Mr. Sewid intended to harm the business interests of the plaintiffs with a view to removing them as competitors or, at least, forcing them to do business with him.

[121] There is an additional indicator of malice respecting Northern Lights arising out of an aspect of the publication not yet mentioned in my reasons. In mid-March 2006, the website reference to Northern Lights read as Northern “Exploitations”. Regardless of when this change was made, it was obviously intended as a derogatory reference. After the service provider removed access to the webpage, Mr. Sewid, or Ms. Westergaard on his behalf, moved it to a different page and, at that point, removed the reference to Northern Exploitations. By March 14, 2006, the webpage had been altered again to republish the reference to “Exploitations”. The webpage was not finally removed until the court continued the injunction against Mr. Sewid as an interim order on April 28, 2006, some 14 months after the initial publication.

[122] Counsel for the plaintiffs also contended that I should also take into account the conduct of Mr. Sewid during the trial. I am reluctant to do so. There is an obvious danger that I would be punishing Mr. Sewid for conduct attributable to Ms. Westergaard who assisted his defence.

[123] I am satisfied that Mr. Sewid’s conduct is deserving of punishment and deterrence. I am further satisfied that the awards for general damages are not sufficient and that there should be a modest additional award of punitive damages in the circumstances. I award punitive damages to Wego of $2,500 and to Northern Lights of $5,000.

[124] Having found in favour of the plaintiffs respecting their claims for general and punitive damages, I summarize the awards as follows:

WEGO
1.	General Damages	$100,000
2.	Punitive Damages	2,500
	TOTAL	$102,500
NORTHERN LIGHTS
1.	General Damages	$150,000
2.	Punitive Damages	5,000
	TOTAL	$155,000

[125] In addition, the plaintiffs are entitled to their costs throughout on Scale B. Apart from instructing counsel, the plaintiffs are limited to a single bill of costs to avoid duplication. I grant leave to speak to the effect of any Offer to Settle if the outcome at trial supports a different cost order under the Rules of Court.

“M.D. Macaulay, J.”
The Honourable Mr. Justice M.D. Macaulay

Citation:	*WeGo Kayaking Ltd. et al v. Sewid, et al,*
	2007 BCSC 49