Written Reasons by:
The Honourable Mr. Justice Hollinrake

Concurred in by:
The Honourable Madam Justice Huddart
The Honourable Madam Justice Saunders

[1] This is an appeal by two of the defendants, Market News Publishing Inc. ("Market News") and Robert Shore ("Shore"), from the assessment of damages in a libel case by a judge alone. That assessment was in favour of the respondent David Baines ("Baines") in the sum of $250,000.

[2] The libel giving rise to this assessment was written by the defendant George Chelekis and through an arrangement with the appellant Shore was published in Market News, Shore's company, in October 1994.

[3] I reproduce here the entirety of the Order in the court below:

[4] The position of the appellants is that the award of $250,000 for compensatory damages is "inordinately high". As can be seen from the Order as against the appellants, no damages were assessed as aggravated as such nor were punitive damages awarded against them, although they were sought by the respondent Baines at trial.

[5] The judgment below can be found on QuickLaw at [1998] B.C.J. No. 848 (S.C.).

[6] The background and findings of the trial judge are set out in his reasons and I intend to refer to those reasons at some length. I reproduce now those portions of the judgment below which I think are of significance to this appeal.

The evidence tendered at trial confirms that description of Chelekis.

[5] The articles which are the subject matter of this action first appeared in a business publication called the Bull & Bear, published in Florida, U.S.A. The first of the articles appeared in the August 1994 edition of the Bull & Bear, and the second article appeared in the October 1994 edition of the Bull & Bear which came out in late September of that year.

[6] The Defendant, David J. Robinson, was the publisher and editor of the Bull & Bear as it was then called. Robinson now publishes and edits a similar paper, printed in the same format and known as the Bull & Bear Financial Report. Robinson resides and works out of Longwood, Florida.

[7] The Defendant, Bull & Bear Financial Newspaper Inc. ceased to exist as a corporation on July 23, 1994. The Plaintiffs do not now seek judgment against the defunct corporation.

[8] Market News Publishing Inc. ("Market News") is based in Vancouver, British Columbia. It distributes business information in Canada and to the United States. Robert Shore is the owner and alter ego of Market News. Market News distributes its information by means of electronic communication to private investors, but of importance to this case, Market News supplies its material to other news distributors, particularly Star Data and Bloomberg. By supplying its material to Bloomberg, Market News can, and sometimes does, achieve worldwide distribution of the material it publishes.

[9] On October 4, 1994, shortly after the second of the articles was published, the Plaintiffs took action on the articles published in the Bull & Bear. Later that day Chelekis published the press release alleged to be defamatory. The action tried before me, a successor action to that first action, was started in May of 1995 and was a claim for damages for the two articles, the press release and a slander made on May 5, 1995.

[10] At first there were other Defendants in the proceedings, Canadian Corporate News Inc., and its publisher, Peter Hunt. The claim against those Defendants was for the press release published by them on October 4, 1994. By the time the matter came to trial, the action against Canadian Corporate News and its publisher had been withdrawn.

[7] I interject here to say that Canadian Corporate News Inc. published a disclaimer and apology on October 6, 1994 which was acceptable to the plaintiffs.

[8] In terms of chronology there was an article written by Chelekis and published in the August 1994 edition of the Bull & Bear. While this article was found to be defamatory it did not involve the appellants.

[9] I continue with my references to the judgment below:

[10] I go back to judgment references.

[25] The second article was more inflammatory than the first article. It implied that Baines and du Plessis were in receipt of illegal payments. Included in the article are the following passages:

[26] I construe the second article as saying that Baines and du Plessis have conspired with others, or have acted at the behest of others, to aid short sellers in the stock market. Those statements I find on the evidence to be a deliberate lie on the part of Chelekis. I construe this second article as saying that Baines and du Plessis conspired with unnamed others to drive down share prices; that they did so to benefit themselves or to assist short sellers and they have been illegally paid off for so doing. If they did, that would be a criminal offence under what is now s. 380(2) of the Criminal Code:

(2) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, with intent to defraud, affects the public market price of stocks, shares, merchandise or anything that is offered for sale to the public is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years.

[27] There are comparable offences of a criminal nature in other jurisdictions.

[28] Some would construe the articles ... to be hyperbole, but many would accord them some credence. The Defendant Shore, who is a man with some knowledge of what was going on in the Vancouver stock market, gave the following answers to questions on his examination for discovery held before the trial:

[29] In his testimony at trial, the Defendant Shore, equivocated as to whether he and Market News had published Chelekis' second article, ... which had been published as hard copy in the Bull & Bear, September/October edition. Shore did not concede that he had sent the October material ... to Bloomberg and Star Data.

[30] I have concluded from the circumstantial evidence that Shore did on or before October 4, 1994, publish the article ... entitled, "Vancouver Stock Exchange: A Short Seller's Paradise Revealed" and I have concluded he did transmit that article to Star Data and to Bloomberg.

[31] On October 4th, the second Chelekis article ... came to the attention of the Plaintiffs. The Sun issued the following press release:

[32] On October 4th and 5th, the next day, Chelekis issued a news release, which was really an advertisement to publicize his October article in the Bull & Bear and its distribution on various computer networks. That press release read:

[33] Chelekis sent the October 4th press release to a U.S. wire service called Business Wire and from there the October 4th press release was picked up by Canadian Corporate News, an affiliate of Business Wire.

[34] I interpret the October 4, 1994 press release to say in effect that Baines received illicit payments from short sellers to write critically about certain stocks trading on the VSE. Further that Baines was himself responsible for death threats he received. Those statements are implications of fact [that] are false and false to the knowledge of Chelekis.

[11] The judge went on to note that Chelekis "did not relent and continued to taunt Baines" and then reproduced this fax from Chelekis to a Mr. Proselandis at the Vancouver Sun dated December 19, 1994 which read:

[12] The judge concluded his reasons as to compensatory damages as against the appellants and Chelekis saying:

[13] The judge then turned to aggravated and punitive damages and said this:

[52] Chelekis' conduct was arrogant, vindictive and continuous. As he said in his letter of December 19, 1994 to Proselandis, "This program will continue until Mr. Baines is left with zero for credibility."

[53] Chelekis carried on his campaign of vilification with the intention that Baines be left with no credibility. His intention was to destroy Baines' career. With that in mind he arranged for the publication and re-publication of his articles with the intention they would reach a world wide audience. He did reach the world wide audience.

[54] The other defendants willingly participated in the distribution of Chelekis' material but I am not persuaded their conduct merits an award of aggravated or punitive damages.

The judge went on to award $100,000 aggravated damages and $100,000 punitive damages against Chelekis.

[14] In awarding $250,000 compensatory damages, the judge did not specifically refer to joint liability but it is clear from the Order, which I have reproduced above, that the liability was joint and several.

[15] That this award of $250,000 for compensatory damages is on a joint and several basis is, in my view, of some significance in this case. That is so because it brings into play against the appellants not only their own conduct but to some extent that of Chelekis. In saying this I am mindful of the fact that aggravated damages as such were awarded against Chelekis only and not against either of the appellants.

[16] This concept of joint liability was referred to in Botiuk v. Toronto Free Press Publications Ltd., [1995] 3 S.C.R. 3. Under the heading "Joint Liability", Cory J. said this at pp. 27-28:

The judge below found that the appellants "willingly participated in the distribution of Chelekis' material". The fact is that after the August 1994 publication of Chelekis' libel in the Bull & Bear, the appellant Shore knew what was going on. On his examination for discovery read in at trial, there is this exchange:

[17] In my opinion, the facts of this case led inevitably to a finding of joint and several liability. To the credit of the appellants, their counsel did not take issue with this conclusion of the judge below.

[18] As I said above, the judge below did not award aggravated damages against these appellants. While the trial judge was not prepared to characterize their conduct such as to call for an award of aggravated damages, that does not mean their conduct was not an aggravating factor to be reflected in the award of compensatory damages. As I view it, the conduct of these appellants throughout this matter created a substantial aggravating factor when it came to the assessment of compensatory damages. The judge was entitled to take into account the conduct of the appellants throughout the entire matter including the law suit itself right up to the judgment. See the judgment of Southin J.A. in Brown v. Cole, [1999] 7 W.W.R. 703 (B.C.C.A.) at para. 84.

[19] In their Statement of Defence filed July 4, 1995, the appellants pleaded:

In the Amended Statement of Defence filed on behalf of these appellants dated September 8, 1997 these paragraphs were withdrawn. September 8, 1997 was the first day of the trial which was almost three years after the publication of the libel by the appellants.

[20] In that same Amended Statement of Defence, Market News referred to an apology it had published, and pleaded s. 10 of the Libel and Slander Act. That apology came in letter form on August 25, 1997 and was published September 3, 1997 - five days before the trial. It is interesting to note that the appellant Shore did not apologize. It is in my view significant to look at Shore's examination for discovery which was held just shortly before the trial as to his bona fides:

Q What I am asking the witness, it goes of course to the damages issue, and I think I am entitled to ask it in fairness whether, sir, as of 1995, you had come to the conclusion that you could not defend these statements as being -- as having been true?

A I had to rely on the veracity of an author to sit down and do it. I felt that there was enough that was true, that there was enough in there that was in fact accurate, that there was enough that I knew and enough that other people had known as well.

Q All right. You keep saying words to the effect that you thought enough of it was true, enough of what Chelekis was saying was true, I am gathering from that, that you didn't think everything he was saying was true?

A I felt there was a substantial portion if [sic] it that was true and I didn't know of any that couldn't be proven or that wasn't necessarily nor did I know of anything that would make them untrue.

Q Okay, so you thought a substantial portion of it was true, and then you thought, you didn't know for sure that -- or you thought that a substantial portion of it was true and you didn't know for certain that anything was untrue, is that a fair summary?

A That's a fair summary.

Again, on that same discovery:

[21] I have already referred to the fact that Chelekis paid $2 to the appellants to have his libel published by Market News, thinking this would protect Shore and Market News to some extent from liability.

[22] As I said above in these reasons, the trial judge found that the appellants "willingly participated in the distribution of Chelekis' material".

[23] There was no evidence of the appellants making any investigation to verify the material coming from Chelekis. They were content to accept Chelekis' word that the articles were true with nothing more to rely on than his word. One would have thought that, in the face of the enormity of the allegations against the respondent Baines' integrity, some investigation would have been made to verify the truth of the statements before running what had to be a substantial risk of publishing them as the appellants did.

[24] I have no doubt that the trial judge was mindful of all these surrounding circumstances in arriving at the assessment he did for compensatory damages against the appellants. In my opinion, the kindest thing that can be said about the conduct of these appellants throughout was that they were cavalier with respect to their publication of this libel and showed no regard whatsoever to the damage being done to the respondent Baines. They must answer for that conduct in damages.

[25] Counsel for the appellants says the highest these damages should be against his clients is $100,000 and submits a more realistic figure would be $50,000. He referred us to various articles and a summary he had prepared of damages in defamation cases. He says the highest awards found, excepting the award for compensatory damages in Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, are in the area of $200,000. The answer to this submission is found in Hill at p. 1205 where Cory J. said:

[26] In Botiuk (above) Cory J. said this at pp. 37-38:

[27] It may be that these compensatory damages are on the generous side but, in my opinion, when one considers that Baines is a journalist with his professional interest in stock markets, the enormity of the libel, the conduct of the appellants I have referred to above, and the finding of the trial judge that they "willingly participated in the distribution of Chelekis' material" leading to a finding of joint liability, I do not think it can be said that these damages are "inordinately high", "wholly out of proportion to the injury", or a "wholly erroneous estimate of the damage suffered". See Southin J.A. in Cole v. Brown, (above) at para. 51.

[28] I would dismiss the appeal.

"The Honourable Mr. Justice "Hollinrake

I AGREE: "The Honourable Madam Justice Huddart"

I AGREE: "The Honourable Madam Justice Saunders"