Reasons for Judgment of the Honourable Madam Justice Saunders:

[1]                In 1996, Dr. Ager, a geophysicist and the respondent in this appeal, sold an interest in mineral claims known as the "Josh" property, to Delgratia Mining Corp.  When an expert report said the property was without mineral value and another said it was valueless and used the term "salting", the value of the shares of Delgratia plunged.  It was, in the trial judge's term, a "debacle".  Litigation concerning the collapse ensued.

[2]                In February 2000, Canada Stockwatch published articles referring to Dr. Ager, the Josh property and the events with Delgratia — re-named Central Minera Mining Corp.

[3]                Dr. Ager successfully sued the owner of Stockwatch, Canjex Publishing Ltd., the author, Mr. Mudry, and the editor, Mr. Woods, in defamation.  In reasons for judgment that may be found at 2003 BCSC 891, Mr. Justice Shaw found the articles defamatory of Dr. Ager, and ordered general damages in his favour in the amount of $200,000; aggravated damages in the amount of $50,000; further aggravated damages in the amount of $50,000 against Canjex and Mr. Woods only; a mandatory injunction requiring the removal of the defamatory passages in the articles from Stockwatch's Internet site; and special costs.

[4]                In this appeal Canjex, Mr. Mudry and Mr. Woods contend that the learned trial judge erred in finding liability, in assessing the quantum of damages, and in awarding special costs.

[5]                The events leading to the collapse of the share value of Delgratia occurred, as noted by the trial judge, in the shadow of the Bre-X Mining scandal.

[6]                In 1996, Dr. Ager transferred a 40 percent interest in the Josh property to Delgratia, with provision for Delgratia to acquire a further interest.   Dr. Ager, who had about 30 years experience in exploration and development of mining properties, became president of Delgratia.  As president, he signed press releases referring to the gold value of the property.  He believed then and, as the trial judge found, still believes, that the Josh property contained a significant quantity of gold.

[7]                In 1997, after press releases were issued concerning assay results from test holes, Delgratia commissioned two experts to assess the property.  One called the property valueless and expressed the opinion that test samples had been salted. The second report said the property was without mineral value.

[8]                The storm that followed included media attention and a precipitous fall in stock value.  In August 1997, Dr. Ager resigned as president.  He has since taken back the Josh property and spent his own money and time seeking to establish gold value on it. 

[9]                Delgratia continued, re-named Central Minera.  In 1999, two senior officers of Central Minera, Mr. Lavarack and Mr. Manning, resigned their positions.  The company sued Mr. Lavarack and Mr. Manning, alleging misdeeds.  They counterclaimed for constructive dismissal.  Dr. Ager was not a party to the action but was said, in the affidavits of Mr. Lavarack and Mr. Manning, to have engaged in wrongdoing, along with others.

[10]            Initially the court file was sealed.  When the Supreme Court of British Columbia unsealed it, Mr. Mudry read those affidavits along with a written submission from Mr. Abrioux, counsel to Mr. Lavarack and Mr. Manning, reflecting their allegations.  Using that material, Mr. Mudry wrote the articles in issue in this appeal, referring to the court file as the "Civelli-Alexander file".  Mr. Woods approved their publication for February 1, 2 and 3, 2000.

[11]            The portions of the articles said by Dr. Ager to be defamatory, with underlining of portions considered by the trial judge to be particularly relevant, are these:

a)         The 1 February 2000 article:

The departures were also allegedly prompted by the "apparent willingness of Civelli and Siegrist, on behalf of the majority shareholders, to give credence to Charles Ager. Ager was the individual who had introduced the company to the Josh property, and who had persuaded the board of the company that his family trust held a half interest in the ownership of the vendor Philgold Investments Inc., and who was implicated in the misleading disclosures of information regarding the assays on the test holes on the property which had given rise to the class action litigation," states Mr. Lavarack in his defence.

...

The just-unsealed file casts a spotlight on the Central Minera recovery scheme of Mr. Alexander, Mr. Ager, Mr. Civelli and his secretive offshore clients.

b)         The 2 February 2000 article:

B.C. Securities Commission                                                  BCSEC

Street Wire...BCSC target Alexander, Civelli, Ager in Delgratia file

The secret Civelli-Alexander file sheds significant light on one of Canada's biggest recent stock frauds, the Delgratia Mining salt job...

... which probed the Delgratia salt job fraud.

... the offshore company of controversial geologist Charles Ager which vended in to Delgratia the worthless salted Josh property in Nevada for $13-million (U.S.). The secret file also reveals that a mysteriously tampered geological report may have been sent to inquiring Nasdaq officials.

The top-secret documents also allege Mr. Lavarack and Mr. Manning were ousted from Central Minera when they refused to go along with a bizarre scheme of Mr. Civelli and Mr. Alexander to show there really was gold at the salted Josh property.

...

While Lavarack's June 2 affidavit remains sealed and at least one of Mr. Manning's affidavits is also still sealed, Mr. Abrioux described their contents to the judge in blunt terms. "It is submitted that the Lavarack and Manning affidavits set out a strong prima facie case of a fraud of significant proportions being perpetrated on the company by Dr. Charles Ager and, perhaps his associate Terry Alexander," stated Mr. Abrioux in his outline.

The defence lawyer told the judge that Central Minera had not presented any evidence to the court which either defended or explained the conduct of Mr. Ager and Mr. Alexander.

The outline also reveals that before his ouster, Mr. Lavarack, acting on behalf of Central Minera, was about to compel Mr. Ager to contribute to a class action settlement, or sue the vendor of the salted property if he did not pay his share.

In early May of 1999, in the wake of Mr. Lavarack and Mr. Manning's ouster, Central Minera had a new board which was more favourable to Mr. Ager, Mr. Alexander and Mr. Civelli and their find-the-phantom-gold scheme. New president Gordon Ellis was a former business associate of Mr. Ager, according to one affidavit, still sealed. Mr. Alexander's personal secretary, Anne Eilers, was appointed corporate secretary.

"It is submitted that, with the present composition of the plaintiff's board of directors an action by it against Ager will never take place. That is why Lavarack and Manning have instructed counsel to seek leave of the court to commence a derivative action," stated Mr. Abrioux's outline, noting a still-sealed affidavit of Mr. Manning.

In March of 1999, before Mr. Lavarack was terminated, Vancouver lawyer Hein Poulus, representing Central Minera, drafted a statement of claim against Mr. Ager. This draft and all other details remain sealed in the secret Civelli-Alexander file.

"Obviously, if Mr. Poulus had ultimately been instructed to proceed with the action against Mr. Ager on behalf of the company, then the information which the plaintiff now seeks to be sealed would undoubtedly have been in the public domain since it would have formed the basis of the allegations against Ager," stated Mr. Abrioux in his outline.

c)         The 3 February, 2000 article:

B.C. Securities Commission                                      BCSEC 

Street Wire...BCSC target Alexander keeps Delgratia lawyers busy

... including controversial Swiss financier Carlo Civelli, now-banned stock promoter Terry Alexander and worthless-property peddler Charles Ager.

After Delgratia, since renamed Central Minera, collapsed amid revelations of a salt job in its flagship Josh property in Nevada, the trio allegedly hatched a scheme to resurrect the salted property by finding some gold in early 1999, in a seemingly bizarre last-minute bid to thwart the settlement of a class action and lift the cloud of controversy surrounding the property and its players.

THE SHOWDOWN AND TERRY'S TALK OF CHUCK'S TANK

Central Minera president Eric Lavarack strongly opposed the find-the-phantom-gold scheme, then suggested the only way to regain any credibility would be to hire a reputable outfit like Strathcona Minerals, which confirmed the massive Bre-X Mineral salt job at Busang in Indonesia.

Mr. Civelli, Mr. Alexander and Mr. Ager were less than enthusiastic about hiring Strathcona, especially after Mr. Alexander had been allegedly leaking a Saskatchewan geologist's report which purportedly showed the Josh property truly had some real gold. "Terry Alexander said Ager won't allow them on the property and there might even be a tank guarding the gates," states former Central Minera finance vice-president David Manning in an unsealed affidavit.

... led the company to pay $13-million (U.S.) for Mr. Ager's worthless Josh property.

The find-the-phantom-gold scheme of Mr. Civelli, Mr. Alexander and Mr. Ager had Mr. Sierchio, who had been handling the class action defence in the United States, in a tizzy last spring. The New York lawyer was particularly upset that the Saskatchewan geologist's favourable Josh report was being leaked around.

"Each leak was traced back to Alexander or his secretary Eilers. The understanding these shareholders had was that we had confirmed that there actually was gold in Nevada and since we found gold, the lawsuits would disappear," states Mr. Manning in his affidavit.

...

The third advantage was the most intriguing. "It will forestall further proceedings for derivative actions to be launched by Central Minera against Charles Ager, Philgold Investments Inc., Nevada Gold Corp., Valley Gold Corp. and other individuals with respect to the salting issues surrounding the Josh property and the obvious fraud contained therein," stated Mr. Webster.

Philgold was the vendor of the dubious Josh property. In November of 1996, Delgratia paid Philgold $5-million (U.S.) and one million shares, at a deemed value of $7.87 (U.S.), for a 40-per-cent interest in Nevada Gold, which owned 100 per cent of Valley Gold, which owned 100 per cent of the Josh property. Philgold and Nevada Gold are both domiciled in the offshore haven of the British Virgin Islands.

On March 21, 1997, after a spate of negative media articles and a Nasdaq stock halt, Delgratia finally revealed that Philgold was owned 50 per cent by a trust of Mr. Ager's family. The press release asserted the other half was owned by an unrelated trust for European investors.

Mr. Civelli's interest in the Delgratia case was revealed five months later. "In a meeting on August 7, 1997, Howard Shiffman (US class action attorney) stated that Ager told him that Carlo Civelli was the owner of the other 50 per cent of Philgold. Terry Alexander confirmed this but said Civelli didn't get any of the money," states Mr. Manning in his affidavit.

[Emphasis added by the trial judge.]

[12]            Dr. Ager commenced an action for defamation, alleging the articles meant  that:

(a)        the Plaintiff was guilty of certain dishonest and dishonourable conduct as follows:

(i)         the peddling of a worthless resourced property, known as the Josh property, the mineral samples of which had been salted, to a publicly listed company ("Delgratia");

(ii)        being a party to a massive stock fraud;

(iii)       being a party to a scheme to defraud Delgratia and its shareholders;

(iv)       being a party to the salting of mineral samples; and

(v)        being a party to misrepresentations in order to further a stock fraud.

[13]            The appellants made four answers:  (1) that the words were not defamatory as alleged but that they were capable of the defamatory meaning that Dr. Ager’s conduct included "the peddling of a worthless resource property, known as the Josh property . . . to a publicly listed company (Delgratia)", a meaning said to be fair comment; (2) that portions of the statements complained of were fair comment, including "the Delgratia Mining salt job" and "Delgratia salt job fraud" and "Mr. Ager … and their find-the-phantom-gold scheme " from the 2 February, 2000 article, and " Alexander and worthless-property peddler Charles Ager" and "the find-the-phantom-gold scheme of . . . Mr. Ager" from the 3 February, 2000 article; (3) that portions of the 3 February article and words pertaining to salting were true; (4) that the balance of all words complained of were protected by qualified privilege, being a fair, balanced and accurate reporting of a litigation proceeding. 

I.          Fresh Evidence Application

[14]            At the commencement of the hearing of this appeal, the appellants presented an application to adduce as fresh evidence the Reasons of an Administrative Law Judge of the United States Department of the Interior in United States of America v. Pass Minerals et al. (8 May 2003).  These Reasons, which declared claims in an area with geology similar to the "Josh" claims "invalid for failure to make a discovery of a valuable mineral deposit", were published after the trial but before the Reasons for Judgment of the trial judge in this case.  Portions were said to be relevant to the issues on appeal.

[15]            Counsel for Dr. Ager objected to introduction of this evidence, saying it was not "evidence" but was simply a decision concerning other property in proceedings to which Dr. Ager was not a party.

[16]            In my view, the evidence sought to be tendered does not meet the test for admission of fresh evidence.  The decision of the Administrative Law Judge did not concern the "Josh" properties addressed in this case, is not binding upon Dr. Ager, and is not evidence of the facts therein found.  Rather, it is evidence that claims of similar geology have been found invalid by the Administrative Law Judge.

[17]            Accordingly, it falls short of the test for admission of fresh evidence.  I would dismiss that application and I have not considered the evidence tendered in reaching my conclusion.

II.         The Issues

1.         Liability

[18]            The trial judge found that the truth of the passages for which justification was claimed either had no significant bearing on the case, or were of no assistance to the defendants.  This issue of truth (no. 3 above) is not raised on this appeal.  Rather, on the issue of liability, the appellants say that the trial judge erred in determining the meaning of the words complained of.  They say, as well, that the defence of qualified privilege for fair reporting of judicial proceedings applies where pleaded, as does the defence of qualified privilege. 

A.         Defamation

[19]            On the meaning of the words the trial judge wrote, referring to his underlining replicated earlier:

[24]      Subject to the various defences, I am of the view that the particular passages in the articles that I have underlined are defamatory of Dr. Ager.

[25]      On a plain reading of the underlined passages in the context of the whole of the articles, I find that the passages allege dishonourable and dishonest conduct. That conduct includes: peddling a worthless salted mineral property to Delgratia; being a party to a massive stock fraud; being a party to a scheme to defraud Delgratia and its shareholders; being a party to the salting of mineral samples; and being a party to misrepresentations in order to further a stock fraud.

[26]      It is clear that such allegations of dishonourable and dishonest conduct would harm the reputation of any geophysicist in the mining industry. I find, therefore, that the allegations set out in the Stockwatch articles are defamatory.

[20]            While agreeing that the articles implicated Dr. Ager in a failure to disclose, the appellants contend that the articles do not reasonably bear the meaning that Dr. Ager was aware of the Josh property's lack of value, or was implicated either in salting or in the sale of a salted property.  In making this submission, they refer to Colour Your World Corp. v. Canadian Broadcasting Corp. (1988), 38 O.R. (3d) 97, 156 D.L.R. (4th) 27 (C.A.), application for leave to appeal dismissed, [1997] S.C.C.A. No. 170, and say that as evidence cannot be called on the meaning of words, this Court is in as favourable a position as the trial judge to determine the correct meaning of the words even though the meaning of words is a question of fact.

[21]            This Court must give deference to the trial judge on questions of fact.  The long line of cases of the Supreme Court of Canada culminating in Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33 make that policy approach clear.  The deference is based upon the better position of a trial judge, who is able to see and hear first-hand the evidence of witnesses and to appreciate and to explore the nuances and interrelationships of the evidence, and policy which favours finality of the legal process. 

[22]            It may be, considering that evidence cannot be called on the meaning of words and giving full weight to the interests of the community in maintaining robust public comment and freedom of expression, that a relaxation of the standard of review as it applies to the meaning of words in a defamation case may be appropriate.  Traditionally, Courts of Appeal have not been shy to guard against a narrow perspective on public expression, as in Colour Your World.  However, that question does not need to be resolved in this case.  In my view, considering the audience to whom the words were communicated, it is a reasonable conclusion that a reasonably thoughtful and informed reader (per the test set out in R. E. Brown, The Law of Defamation in Canada, 2nd ed. vol.1 (Toronto: Carswell, 1999 loose-leaf updated 2004, release 2 at 5-5 to 5-16 and 5-62 to 5-64) would find that the words had the meaning attributed to them by the trial judge.  The essence of Dr. Ager’s complaint is that the articles implicated him in salting or in selling a property known by him to have been salted.  The trial judge agreed with Dr. Ager.  In my view, the conclusion of the trial judge is reasonable given the description of Dr. Ager in the article of 2 February, 2000: “vendor of the salted property”.  While a discerning reader might also take the alternative meaning that he sold property that was later salted, the question for us is not whether more than one meaning may be taken, but whether a reasonable reader would take the defamatory meaning ascribed to the words by the trial judge.

[23]            It follows that I would not accede to this ground of appeal.

B.         Fair Reporting

[24]            In finding the defence of fair reporting did not apply, the trial judge said:

[42]      In the second article, Mr. Mudry said:

The unsealed portions of the secret Civelli-Alexander file reveals that Mr. Civelli, or his publicity-shy offshore clients, allegedly owned half of Philgold Investments, the offshore company of controversial geologist Charles Ager which vended in to Delgratia the worthless salted Josh property in Nevada for $13-million (U.S.). The secret file also reveals that a mysteriously tampered geological report may have been sent to inquiring Nasdaq officials.

[43]      The impression created by the above paragraph is that Dr. Ager sold a salted property to Delgratia. This message is not a fair and accurate report of the contents of the court file. The allegations in the documents in the file do not suggest that Dr. Ager sold a salted property to Delgratia.

[44]      A similar impression is given by Mr. Mudry's opening paragraph in the third article:

The top-secret Civelli-Alexander file offers an intriguing behind-the-scenes look into the activities of several Delgratia Mining players, including controversial Swiss financier Carlo Civelli, now-banned stock promoter Terry Alexander and worthless-property peddler Charles Ager.

[45]      The word "peddler" in the expression "worthless property peddler" is clearly used in the pejorative sense. When read in context, the message it conveys is that Dr. Ager was fraudulently implicated in selling a salted property to Delgratia. The expression "worthless property peddler" is not used in the materials in the court file. It is Mr. Mudry's creation. The materials do not allege that Dr. Ager was fraudulently implicated in selling a salted property. In my view, the impression created by the above quoted passage is inaccurate and unfair.

[46]      In the third article, Mr. Mudry reports that Mr. Ager and two others "allegedly hatched a scheme to resurrect the salted property by finding some gold in early 1999". When read in context, the innuendo is that Mr. Ager and two others conspired to resurrect the Josh property by dishonestly "finding" gold. This innuendo is not a fair and accurate summary of the allegations in the court file. The allegations were that Dr. Ager and others pressed Delgratia to commission a further report regarding the salting question and the gold value of the property. There was no allegation that the proposed report was for the purpose of dishonestly "finding" gold.

[47]      In the second and third articles, Mr. Mudry uses the expression "find-the-phantom-gold scheme". This is Mr. Mudry's mischaracterization of Dr. Ager and others pressing for further independent testing of the property. In context, it implies a dishonest scheme to "find" non-existent gold. That is neither fair nor accurate reporting.

[25]            In addition, he held:

[48]      Mr. Mudry's second article states that the British Columbia Securities Commission ("BCSC") was targeting Mr. Ager in the Delgratia file. There was no suggestion of this in the court file, nor did Mr. Mudry have any evidence to support this assertion. That is neither fair nor accurate reporting.

[49]      When all the foregoing unfair and inaccurate aspects of Mr. Mudry's reporting are considered together and in the context of the articles as a whole, I find that they are so serious as to disentitle Mr. Mudry to the defence of fair and accurate reporting of a judicial proceeding. I say so because, in my view, the incorrect and unfair assertions by Mr. Mudry infect the whole of the reporting of what he found in the court file. His characterizations of Dr. Ager's conduct lend a sense of credence or believability to the otherwise untested allegations in the affidavits of Mr. Lavarack and Mr. Manning and in Mr. Abrioux's written submission.

[50]      Accordingly, I find that neither the statutory nor the common law defence of fair and accurate reporting of a court proceeding is available to the defendants.

[26]            The appellants contend that the trial judge erred in rejecting the defence of fair reporting.  They say that, apart from paragraphs of the article defended as fair comment, the articles were fair reporting of the judicial proceedings between Mr. Lavarack and Mr. Manning on one side and Central Minera on the other.  The legal proceedings included numerous allegations of fraud and misconduct on Dr. Ager’s part, although he was not a party to the proceeding. 

[27]            The action was defended on the basis of both fair comment and fair reporting. The trial judge opted to deal with the issue of fair reporting before fair comment.  However, in their statement of defence most of the words that were addressed by the trial judge as carrying the sting derived from connecting Dr. Ager to a valueless property, salting and a scheme, were defended on the basis of fair comment, with the balance of the words defended as fair reporting.

[28]            The trial judge dealt expressly with five portions of the articles which he found were not a fair report of the court file. These were, in his paras. 42 and 43, the words, ". . . vended in to Delgratia the worthless salted Josh property"; in his paras. 44 and 45, the words, "worthless-property peddler Charles Ager", in his para. 46, the words "allegedly hatched scheme to resurrect the salted property by finding some gold in early 1999"; in his para. 47, the words "find-the-phantom-gold scheme"'; and in his para. 48, the reference to the British Columbia Securities Commission targeting Dr. Ager in the Delgratia fie. All of these examples, except the last, were defended not on the defence of fair reporting but on the defence of fair comment.  That is, the appellants never pleaded that the first four were information derived from the court file or from court proceedings.

[29]            The trial judge, in discussing the qualified privilege that attaches to fair reporting of legal proceedings, referred with approval to Risk Allah Bey v. Whitehurst (1868), 18 L.T.N.S. 615 (Q.B.) and Delegal v. Highley (1837), 6 L.J.C.P. 337, 132 E.R. 677.  In the former, Cockburn C.J. said at 619:

. . . [I]f you are of opinion that, looking at the whole of these communications, they do not contain a fair, honest, and faithful representation of what passed under the proceedings of that trial, but that, yielding to the impressions of the moment or with the idea of making his articles as taking, as attractive, and as effective as possible, the writer has gone beyond the legitimate bounds of privilege, and that on these considerations he has stated that which is unfair and prejudicial to the man about whom he was writing — if you think there are passages where the reporter is merely repeating his own statements — you are bound to say so by your verdict.

[30]            In Delegal, Tindal C.J. said at 345:

But it is an established principle, upon which the privilege of publishing a report of any judicial proceedings is admitted to rest, that such report must be strictly confined to the actual proceedings in court, and must contain no defamatory observations or comments from any quarter whatever, in addition to what forms strictly and properly the legal proceedings.

[31]            Relying upon those authorities, the trial judge concluded:

[39]      A report of legal proceedings which goes beyond simply reporting on the proceedings and includes defamatory declarations of the reporter will likely result in the loss of the protection of privilege.  This proposition is long established in our law. …

[32]            With respect, I consider that the proposition in Delegal, with the accretion of subsequent cases, has been softened, and would accept the description in Patrick Milmo, Q.C. & W.V.H. Rogers, eds., Gatley on Libel and Slander, 10th ed. (London: Sweet & Maxwell, 2004) at 13.46:

13.46   It has been said that for privilege to apply a report "must be strictly confined to the actual proceedings in court, and must contain no defamatory observations or comments from any quarter whatever, in addition to what forms strictly and properly the legal proceedings."  This is true if, e.g. the report contains comment inextricably mixed with what happened in court or remarks plainly unconnected with the proceedings, but the proposition needs to be qualified in two ways.  First, if an article contains an accurate report and comment which is separable from it, the report may be defended as a fair and accurate report and the comment as fair comment.  Secondly, a more liberal view is now taken of what forms the "legal proceedings" than was once the case. …

[Footnotes omitted.]

[33]            Much the same approach is noted in R. E. Brown, The Law of Defamation in Canada, supra, vol. 2 (loose-leaf updated 2004, release 2) at 14-31:

If the report is otherwise fair, a court will permit some degree of literary license on the part of the reporter.  The privilege will not be defeated merely because of the writer's flamboyant and embellished style of reporting, or the employment of vivid word descriptions, or even because he is "flippant" and "smart alecky" in order to attract reader interest.

[34]            I think it is now clear that a defamatory publication can be defended on the basis both of fair reporting and fair comment, with one defence applying to some portions and the other defence to other portions.  Such was the case in Taylor-Wright v. CHBC-TV, a Division of WIC Television Ltd., [1999] B.C.J. No. 334 (S.C.), affirmed (2000), 82 B.C.L.R. (3d) 50, BCCA 629, wherein the learned trial judge accepted the defence of fair comment as to certain aspects of the impugned broadcasts, and fair reporting as to other aspects.  Likewise in Thore v. Mudry, [1999] B.C.J. No. 1693 (S.C.) (QL), the trial judge invoked both fair comment and fair reporting in dismissing the action.

[35]            I turn then to the phrase pleaded, and rejected by the trial judge, as fair reporting: "BCSC target Alexander, Civelli, Ager".  The appellants contended that the word "target" modified only "Alexander" and not, as well, Dr. Ager.  The trial judge found otherwise.   That is, I think, he concluded that the word "target" was used as a verb and not as an adjective.  In my view, that conclusion was open to the trial judge.  Further, the information contained in the phrase does not reflect anything in the court file.  Here the defence of fair reporting was correctly rejected.

[36]            The phrase, on the other hand, is minor in the context of the other allegations in the articles, and alone is insufficient to cause harm above the harm done by the balance of the articles.  The award of damages must rest on more than this phrase.

[37]            The central issue is fair comment, to which I now turn.

C.        Fair Comment

[38]            The trial judge rejected the defence of fair comment, referring to Kerr v. Conlogue (1992), 65 B.C.L.R. (2d) 70, [1992] 4 W.W.R. 258 (S.C.) and saying:

[54]      The articles give the appearance of reporting on a legal proceeding. On reading the articles, I find that the line where reporting ends and comment of Mr. Mudry begins is not readily ascertainable. What is Mr. Mudry's opinion as distinct from factual reporting of the legal proceeding is quite unclear. The reader is not put in a position where he or she can reasonably recognize what is comment and what is not and evaluate that which is comment. Accordingly, the defence of fair comment is not available to the defendants.

[55]      There is a further reason for turning down the defence of fair comment. As a general rule, the defence of fair comment requires the defendant to show that the facts upon which the comment was based are true: Kerr v. Conlogue, supra, para [53]. There is, however, an exception to the general rule which allows for fair comment based upon statements made in court or in parliament, without having to prove the statements are true. …

[58]      To fall within the exception, it is a prerequisite that the reporting on the judicial proceeding be fair and accurate. …

…

[60]      In the present case, I have already held that Mr. Mudry's reporting of the legal proceedings involving Mr. Lavarack and Mr. Manning was neither fair nor accurate. It follows that the defendants cannot avail themselves of the exception allowing fair comment on statements made in judicial proceedings.

[Emphasis added.]

[39]            Thus, because the trial judge relied upon his discussion of fair reporting, one must consider the four portions of the articles criticized by the trial judge under the rubric of fair reporting, which are set out above in para. 24.

[40]            The defence of fair comment was described by Nemetz C.J.B.C. in Vander Zalm v. Times Publishers, Bierman, McLintock and Underhill (1980), 18 B.C.L.R. 210, 109 D.L.R. (3d) 531 [cited to B.C.L.R.] (C.A.) at 213:

The three elements of the defence of fair comment are well known.  First, the matter must be recognizable to the ordinary reasonable man as a comment upon true facts, and not as a bare statement of fact.  Secondly, the matter commented upon must be one of public interest.  There must, in short, be a public nexus between the matter and the person caricatured. In a case such as this, the cartoonist may not intrude upon the private life of a public man, no matter how interesting such an intrusion may be to the public, nor may he expose a private person to unsought publicity.  Finally, as explained by Diplock, J. (as he then was) in Silkin v. Beaverbrook Newspapers, [1958] 1 W.L.R. 743 at 747, [1958] 2 All E.R. 516 and by the Supreme Court of Canada in Cherneskey v. Armadale Publishers Ltd. [1979] 1 S.C.R. 1067, the comment must be "fair" in that it must, to quote Martland, J. in Cherneskey, supra at p. 1073, "represent an honest expression of the real view of the person making the comment." …

[Emphasis added.]

[41]            The trial judge here first rejected the defence of fair comment as fatally intertwined with the report of the judicial proceeding.  Second, on the basis that the defence could apply only if the judicial proceeding was fairly reported, and on his conclusion that it was not, he rejected the defence of fair comment.

[42]            As I have earlier explained, fair reporting was rejected as a defence of statements which were never defended as fair reporting.  Thus, the trial judge's secondary basis for rejecting the defence of fair comment cannot stand.

[43]            This leaves the primary ground.  Was the comment so intertwined with the report on legal proceedings that it could not be seen by the reader as comment?  The test is whether the comment is recognizable from the facts reported.  In the words of Brown, supra, at p. 15-27:

"A comment to be justifiable must appear as a comment and must not be mixed up with allegations of fact so that the reader cannot distinguish between what is fact and what is comment."  They must not become so entangled that inferences cannot be distinguished from facts.  In such a case, the defendant must accept the risk that what he or she has framed as an expression of opinion might reasonably be perceived by the public as a statement of fact, to which the defence of fair comment will not attach.  Any ambiguity in this regard will be resolved against the defendant.

[Footnotes omitted.]

[44]            In Jones v. Bennett (1967), 59 W.W.R. 449 (B.C.S.C.), Ruttan J., following Mitchell v. The Victoria Daily Times (No. 3) (1944), 60 B.C.R. 39 (S.C.), affirmed by the Supreme Court of Canada (1968), 2 D.L.R. (3d) 291, [1969] S.C.R. 277, said at 459:

[35]      Gatley quotes the decision of Bird, J., as he then was, sitting in this court in Mitchell v. Times Printing & Publishing Co., [1944] 1 WWR 400, 60 BCR 39, 81 CCC 42 (sub nom. Mitchell v. Victoria Daily Times) [1944] 2 DLR 239, where his lordship found there had been an inextricable combining of statements of fact and comment. So, in the present case, if Mr. Bennett's remarks contain any element of comment, that comment is so bound up in false statements of fact that his allegations are essentially ones of fact and he cannot rely on the defence of fair comment.

The trial judge here concluded that the comment could not be sufficiently disentangled from the fact. 

[45]            While it is true that comment may be colourfully and even pungently expressed, its defining characteristic is that the words must appear as comment.  Notwithstanding the able submissions of counsel for the appellants, I am not persuaded that the trial judge erred in finding that the words which were said to be comment were too entangled with the report of legal proceedings to have that protection.

[46]            Before us much attention was given to the phrase "peddler of worthless property".  While I consider those words a colourful expression of the author's view of the property (which indeed had undergone a dramatic alteration in public assessment of its worth), and the word "peddler" as the use of a perfectly good, but rather old-fashioned, English word, and thus would not base the damage award on that phrase, there is no escaping the more specific words "the vendor of the salted property".  The meaning taken by the trial judge of that phrase, which I earlier addressed in the context of the words' meaning, was not established to be true although all words pertaining to “salting” were defended as true.  The words “vendor of the salted property”, defended on the basis of fair reporting, were not specifically addressed by the trial judge in his discussion of that defence.  The phrase is similar to words defended as fair comment: “company of Charles Ager which vended in to Delgratia the worthless salted Josh property ... “.  In my view, the two phrases must be read together, and appear to allege as fact the meaning given by the trial judge, rather than appearing as comment or even a report on the contents of a court file. 

[47]            Those words alone, given the professional standing of Dr. Ager as a geophysicist, cannot be saved by the defences presented and are sufficient to establish liability.

[48]            It follows that I would not accede to the appeal from liability.

2.         Damages

[49]            I turn to damages.  The appellants appeal from both the order of general damages and the order of aggravated damages.

A.         General Damages

[50]            On the issue of general damages, ordered in the amount of $200,000, the appellants contend that: (1) the evidence as to the true state of affairs with the Josh property, Delgratia and Dr. Ager's role in the events that led to Delgratia's acquisition of the property and the sharp decline in its stock value was wrongly ignored by the trial judge; (2) the trial judge wrongly rejected as inadmissible evidence of acts of misconduct by Dr. Ager before publication of the articles; (3) the trial judge erroneously failed to address the substantial damage to Dr. Ager's general reputation from the many negative newspaper headlines published before the articles in question; and (4) certain evidence from Dr. Ager was opinion evidence and was wrongly admitted.

[51]            The last of these submissions may be dealt with briefly.  Evidence was adduced from Dr. Ager as to the presence of gold on the property; as to his opinion of the assay method that produced the high gold value later repudiated; as to the property not having been salted; and as to the meaning of certain words.  All that evidence, in my view, was properly admitted as relevant to the question of Dr. Ager's character, and tended to negate the contention he was a fraudster.  I would not give effect to this ground of appeal.

[52]            The other three submissions on general damages are different ways of approaching the same contention, that the damages awarded did not reflect the negative consequences of the following facts: those relating to Delgratia's acquisition of the Josh property; the overly positive assay results and subsequent disavowal of the same with the consequent fall of the stock value; Dr. Ager's role in the events; the odium that attached to the assayer; and the prior and proper publicity of these events.  They observe that Dr. Ager, himself, agreed that the scandal was the "biggest embarrassment of my life."

[53]            In his discussion of the assessment of damages, the trial judge declined a reduction to reflect the damaging fact that revelation of Delgratia's acquisition of the Josh property from a company owned fifty percent by an Ager family trust was not made until mid controversy and after Dr. Ager had signed press releases on behalf of Delgratia:

[30]      In my opinion, the truth or otherwise of these passages has no significant bearing on whether the articles as a whole, and particularly the parts which I have underlined, are defamatory of Dr. Ager.  None of my findings of defamation relate to the above two paragraphs.  This aspect of the defence of truth is therefore irrelevant.

[54]            On the damages assessment under the heading "Lack of Causation", he said:

[61]      The defendants contend that if there was defamation, the defamation caused no harm to Dr. Ager’s reputation.  The defendants submit that Dr. Ager’s reputation was badly damaged by the collapse of Delgratia amid attendant publicity in 1997 and 1998 and that the publication of the Stockwatch articles caused him no more harm than what had already been done.

[62]      In support of their position, the defendants rely upon numerous articles published in the media in 1997 and 1998 reporting on the collapse of Delgratia.  I have read these articles and compared them to the three Stockwatch articles published in February 2000.  In my view, there are significant differences.  The writers of the 1997-98 articles refrained from accusing Dr. Ager of fraud whereas in the Stockwatch articles in 2000, Mr. Mudry exercised no such restraint, stating that Dr. Ager was a peddler of a worthless salted property.  …

[63]      Although the 1997-98 articles will have had some effect upon Dr. Ager’s reputation because of his involvement with the Josh property and Delgratia, the three Stockwatch articles published in February 2000 had a considerably greater effect.  I find that Dr. Ager’s reputation suffered as a result of the publication of the Stockwatch articles.  I therefore reject the defence of lack of causation.

[55]            The trial judge then addressed the issue of Dr. Ager's reputation and allegations concerning his conduct, rejecting acts of prior misconduct as inadmissible:

[66]      All the above items except number (v) allege some form of misconduct.  Counsel for Dr. Ager contends that none of them (except number (v)) have been proven.  Counsel for the defendants argues that they have been proven.

[67]      Counsel for Dr. Ager also argues that these contested items are not admissible evidence on the issue of causation.

[68]      In my opinion, the law supports Dr. Ager’s position.  While general evidence of bad reputation is admissible and relevant, evidence of particular acts of misconduct is not admissible on the issue of reputation:  Gatley on Libel & Slander, 9th ed. (London:  Sweet & Maxwell, 1998) at 842, 845-46.

…

[72]      I conclude, therefore, that the disputed items of alleged misconduct cannot be relied upon by the defendants on the issue of causation.

[73]      For the foregoing reasons, I reject the defence of lack of causation.

And:

[96]      The defendants contend that there have been no damages proven because, they say, Dr. Ager’s reputation was already ruined by the publicity attached to the collapse of Delgratia in 1997 and 1998 and reports that the Josh property was salted and worthless.  I have already rejected this submission under the section entitled Lack of Causation.

…

[99]      Dr. Ager admits, however, that what took place in 1997-98 was the biggest embarrassment of his life and that he had a black eye from it.

…

[102]    I think it is inevitable that Dr. Ager’s reputation suffered some damage from the publicity attached to the events in 1997-98.  I accept that up to that time he had a good reputation for his work and for his integrity.

[103]    In 1997-98, the publicity attendant upon Delgratia and Dr. Ager was such as to make him a “controversial” geologist, to use the word used by Mr. Mudry.  The Stockwatch articles in February 2000 in effect changed that description to a “fraudulent” geologist.  This, I find, caused considerable harm to Dr. Ager’s reputation.  This occurred in the eyes of family members, former friends and business associates.  It also occurred in the eyes of persons involved in the mining industry, including those to whom he must look for financing.

[56]            Since the reasons for judgment were published, Gatley has appeared in its 10th edition, to which I have earlier referred.  In that work, relying upon Burstein v. Times Newspapers Ltd., [2001] 1 W.L.R. 579 (C.A.), it is said at 858-9:

A defendant may also plead in mitigation of damages the claimant's general bad reputation or directly relevant background contextual material that bears on the claimant's reputation.  In addition, the defendant may at trial rely in mitigation of damages on any evidence properly before the court, including evidence which has been primarily directed to an unsuccessful plea of justification or fair comment.

[Footnotes omitted.]

[57]            In Burstein, the impugned comments concerned particulars of the plaintiff's antecedent conduct.  The defence of fair comment was struck.  The issue before the court was whether the defendants were permitted to rely, in reduction of damages, on the facts pleaded in support of the defence of fair comment.  May L.J. reviewed Scott v. Sampson (1882), 8 Q.B.D. 491 (D.C.), Pamplin v. Express Newspapers (No. 2), [1988] 1 W.L.R. 116 and Speidel v. J. Plato Films Ltd., [1961] A.C. 1090.  After addressing the tactical procedural manoeuvrings encouraged by the state of the jurisprudence, and the report of the Supreme Court Procedure Committee on Practice and Procedure in Defamation, whose recommendation for a change to the law to permit consideration of instances of misconduct in the same sector of the plaintiff's life as that to which the defamation relates, was not reflected in legislation, May L.J. broadened the scope of misconduct to which a defendant could refer in contending for reduced damages.  In doing so, he said (at para. 41):

Considering the decision as to admissibility which the judge had to make in the present case in the first instance as a matter of case management and of what is just, I consider that some parts of the particulars on which the defendants wanted to rely should have been admitted.  There was a background context to the defamatory publication.  To keep that away from the jury was, I think, to put them in blinkers.   To determine the relevant background context and to confine it properly, it is necessary to start with the defamatory publication itself.

[58]            The appellants contend that the trial judge took too narrow a view of the scope of admissible evidence, and that in assessing damages, he should have considered  these factors:

i)          Dr. Ager chose to not disclose the fact that Delgratia was employing a secret proprietary technology, that was essentially experimental, to test for gold;

ii)         Company news releases, signed by Dr. Ager, referred to fire assays with no accompanying explanation that although conventional fire assays were employed, the sample preparation was anything but conventional;

iii)         Dr. Ager decided to use Mr. Gunnison and his facility and continued to do so even after it came to his attention that Mr. Gunnison had been convicted of a criminal offence that might have involved personal integrity;

iv)        Dr. Ager chose not to discontinue the testing of drill samples, or at least the announcement of the results of such tests, when he was advised by David Comacho that samples employed in the Mountford & Beattie audit were testing negative;

v)         Dr. Ager was the President and the Chairman of the Board of Directors of Delgratia.  He was Delgratia’s leader;

vi)        when the Delgratia scandal erupted, Dr. Ager retreated into an assertion that he was “just the technical guy”.  He never accepted any responsibility;

vii)        Dr. Ager allowed his passion for experimental science to colour his objectivity and thereby exposed Delgratia and its shareholders to unnecessary risks;

viii)       Dr. Ager was overly promotional.

[Emphasis in original.]

[59]            Some, but not all of those allegations were pleaded as particulars to the plea of fair comment.  Other paragraphs are responsive to the evidence adduced from Dr. Ager in refuting the meaning he pleaded — that he was fraudulent, and para. i) is certainly part of the story underlying the publication.  All are items that should have been considered by the trial judge.

[60]            In my view, the reasoning in Burstein is persuasive.  To the extent that the factors relied upon in mitigation of damages were otherwise particularized in the statement of defence, that they were supported by evidence, and that they are directly connected to the subject matter of the defamatory publication, they were factors to be considered in an assessment of damages.

[61]            The question is whether the damages should be reduced in response to those factors not considered by the trial judge.  The award of general damages is substantial.  We are urged to reduce the award, as this Court did in Brown v. Cole (1998), 61 B.C.L.R. (3d) 1 (C.A.), [1999] 7 W.W.R. 703, to keep the award within reasonable bounds.

[62]            In Brown v. Cole, Southin J.A. for the Court reviewed the purpose of compensatory damages, summarizing (at para. 107):

Compensatory damages - I put aside for the moment aggravating circumstances - in actions for defamation have many aspects:

1.         the compensation for "insult offered and pain given", to borrow the words of Lord Devlin in Rookes v. Barnard, [1964] 1 All E.R. 367 (U.K.H.L.) at 413;

2.         vindication of reputation;

3.         injury to pride and self-confidence - this may just be another way of saying "insult offered and pain given";

4.         social damage and possible economic damage which may result but which cannot be expressly proven - this is particularly important, in my opinion, in defamation in the mass media.

[63]            The award of damages was intended to compensate Dr. Ager for pain and insult, and the social and business loss, and to represent vindication.  He is a professional person injured in his professional reputation. I have no doubt that an allegation tying, as the trial judge found was so in this case, an experienced geophysicist to the salting of a property or samples, is as serious a blow as could be inflicted upon his professional reputation.  Reid L.J. in Cassell & Co. v. Broome, [1972] 1 All E.R. 801, said at 836, in a passage referred to in Brown v. Cole at para. 113:

Any one person trying to fix a sum as compensation will probably find in his mind a wide bracket within which any sum could be regarded by him as not unreasonable — and different people will come to different conclusions.  So in the end there will probably be a wide gap between the sum which on an objective view could be regarded as the least and the sum which could be regarded as the most to which the plaintiff is entitled as compensation.

[64]            In 1982, in Vogel v. C.B.C., [1982] 35 B.C.L.R. 7, 3 W.W.R. 97 (S.C.), $100,000 general damages and $25,000 aggravated damages were awarded for published allegations that the then Deputy Attorney General had abused his office.  Considering that more than 20 years have passed since the award in Vogel was made, an award of $200,000 is not so high as should be reduced by this Court in these circumstances.  While I might have awarded less, I cannot say the trial judge erred in assessing them at the high end of the appropriate range.

B          Aggravated Damages

[65]            I turn to the two awards of aggravated damages, one against all three defendants in the amount of $50,000, and the other against only Canjex and Mr. Woods in an identical amount.  By those two awards the total damages increased by 50 percent to $300,000.

[66]            In ordering aggravated damages against all three defendants the trial judge was brief:

[105]    Until about five weeks before the trial, the defendants pleaded truth to the contents of their articles.  At that point, they dropped the plea of truth except in matters which, in my view, are without significance. In addition, the defendants have never withdrawn the defamatory parts of the articles from internet access.  Those are aggravating circumstances calling for damages which I assess at $50,000.

[67]            The further sum of $50,000 was awarded on the basis of this reasoning:

[106]    The harm to Dr. Ager’s reputation was exacerbated by aspects of the articles published during and after the trial that I have dealt with above.  The articles were written by an employee of Stockwatch and vetted and approved by Mr. Woods.  There is no evidence that Mr. Mudry had anything to do with these articles.  In my opinion, the further harm done to Dr. Ager’s reputation as a result of these articles is substantial.  I assess further aggravated damages at $50,000.  This portion of the damages will be against Canjex Publishing Ltd. and Mr. Woods, but not Mr. Mudry.

[68]            The reference in para. 106 to articles published during and after the trial was to articles published ostensibly as reports upon the trial.  The reporting included descriptions of Dr. Ager's demeanor and answers, reference to Dr. Ager as "controversial" and reference to "another" of Mr. Lunny's "controversial" clients described as:

[82]      … an “alleged drug money launderer and Hells Angels associate”, arrested in an “undercover sting”, allegedly linked with “the contract killing of four underworld figures”, including a “former high-ranking Hells Angels member” and a “convicted Howe Street penny stock promoter”.

[69]            The articles also referred to the evidence of Mr. Mudry and Mr. Woods.  Reviewing all of the articles, the trial judge held:

[88]      While the derogatory comments about Dr. Ager’s demeanour and evidence might, if considered in isolation, be said to be fair comment on a matter of public interest, any suggestion of fairness is stripped away by the comparison of Dr. Ager with the other “controversial” client of Mr. Lunny who, the author reports, is alleged to be deeply involved in criminal activity.  In my view, this implied comparison infects the author’s reports and unfairly slants the reporting against Dr. Ager.  The effect is to exacerbate the damage to Dr. Ager’s reputation caused by the defamation.

[70]            The trial judge continued:

[89]      I conclude that I should take the articles published during the trial into account in assessing aggravated damages.

[71]            In addition to articles published during the trial, the trial judge also reviewed articles published by Stockwatch after the trial.  He found that the reporting "went beyond the bounds of fair reporting" and that the articles "served to unduly emphasize these allegations against Dr. Ager”.  He held as to the after-trial articles:

[91]      … I find that this was not fair and balanced reporting.  I also find that it subjected Dr. Ager’s reputation to increased harm.

[92]      I conclude that the second and third reporting of the complained-of matters should be taken into account in the assessment of damages.

[72]            The appellants contend that aggravated damages should not have been awarded because the trial judge failed to find actual malice.

[73]            In Hill v. Scientology of Toronto, [1995] 2 S.C.R. 1130, 126 D.L.R. (4th) 129,  the Supreme Court of Canada dealt with aggravated damages in a defamation case, affirming that they are compensatory in nature, and are to take into account "additional harm caused to the plaintiff's feelings by the defendant's outrageous and malicious conduct" (at para. 189).   At para. 190, the Court addressed the requirement of actual malice, a concept well known to the law of defamation in the context of defeating the defence of qualified privilege, saying a finding of actual malice is required for an award of aggravated damages:

If aggravated damages are to be awarded, there must be a finding that the defendant was motivated by actual malice, which increased the injury to the plaintiff, either by spreading further afield the damage to the reputation of the plaintiff, or by increasing the mental distress and humiliation of the plaintiff.  See, for example, Walker v. CFTO Ltd., supra, at p. 111; Vogel, supra, at p. 178; Kerr v. Conlogue (1992), 65 B.C.L.R. (2d) 70 (S.C.), at p. 93; and Cassell & Co. v. Broome, supra, at pp. 825-26.  The malice may be established by intrinsic evidence derived from the libellous statement itself and the circumstances of its publication, or by extrinsic evidence pertaining to the surrounding circumstances which demonstrate that the defendant was motivated by an unjustifiable intention to injure the plaintiff.  See Taylor v. Despard, supra, at p. 975.

[74]            The trial judge did not expressly find actual malice:

[93]      The issue of malice was argued by the parties.  As a matter of law, once publication of defamation has been proven, malice is presumed unless the defence establishes that the publication occurred on a privileged occasion:  The Law of Defamation in Canada, Vol. 2, supra, at 16-2 to 16-14.

[94]      In the present case, publication of defamation has been proven and the defence has failed to establish privilege.  It follows that malice is presumed by law.

[75]            In rejecting an order of punitive damages, the trial judge addressed the egregious nature of the defendants' conduct, but stopped short of expressly finding actual malice:

[108]    When I consider the full scope of the defendants’ conduct set out above, I conclude that it was egregious and properly deserving of punishment.  I also consider, however, that in the circumstances of this case, the combined award of general and aggravated damages is sufficient to achieve the goal of punishment and deterrence.  …

[76]            Counsel for Dr. Ager agrees, based upon Hill v. Church of Scientology, that an award of aggravated damages requires actual malice, but says the reasons for judgment of the trial judge implicitly contain the necessary findings:  Sienema v. British Columbia Insurance Co. (2003), 21 B.C.L.R. (4th) 321, 2003 BCCA 669 and B & A Bobcat and Excavating Ltd. v. Sangha, (1999), 118 B.C.A.C. 186, 1999 BCCA 49.  He says the statement rejecting punitive damages on the basis only that aggravated damages have been awarded implicitly recognizes the presence of actual malice.   Further, he points to the reference, odious he says, to “another controversial client” of Mr. Lunny which he says demonstrates the necessary malice.

[77]            While it may have been open to the trial judge to find actual malice, I do not think his reasons for judgment do so.  Rather, his paras. 93 and 94 replicated above deal with malice on the basis of presumption.  But that view of malice does not accord with the malice required for an assessment of aggravated damages described in Hill v. Church of Scientology.   

[78]            Nor do I consider that his reference to aggravated damages, in rejecting an award of punitive damages, recognizes the presence of actual malice.  One would expect his view of the presumption of malice to have been in his mind in discussing punitive damages. 

[79]            Should this Court, then, find actual malice demonstrated by the mid-trial and after trial reports of the case, particularly his reference to “another” controversial client of Mr. Lunny?  The answer, in my view, is no.  With respect, I do not consider the reference to Mr. Lunny's controversial (and now convicted) client demonstrates actual malice towards Dr. Ager.  The reasonable reader, no doubt, is aware that experienced counsel, including Mr. Lunny, represent clients of all stripes, and would conclude that the reputation of one client is not tainted by his lawyer’s varied client stable. 

[80]            It is also said on behalf of Dr. Ager that the award of damages is compensatory and the ultimate question is whether the order is a miscarriage of justice.  In my view, given the misconception of the applicable correct principle in this case, the award of aggravated damages cannot be supported provided that the damages awarded are otherwise sufficient to address the hurt, insult and damage to reputation.  In this case, the award of general damages is hearty.  Even without the award of aggravated damages, it represents full vindication for Dr. Ager and is sufficient to address the hurt, insult and damage to his reputation. 

[81]            The award of aggravated damages against all defendants was said by the trial judge to reflect the late abandonment of much of the defence of truth, and the failure to remove the articles from the company's Internet website.  While it is clear that conduct during the action, including persistent assertion of truth, may support aggravated damages as it may be a basis on which to conclude there is actual malice, there is some danger in awarding aggravated damages simply because a defence was asserted and then abandoned.  Repetition of defamatory words is undesirable and a defence of truth should not be asserted without a sound basis.  So too, however, it is undesirable to fetter a party's ability to present a full case to the court or to discourage abandonment of positions considered erroneous (or merely secondary).   The requirement for aggravated damages of a finding of actual malice acts as a balance to these competing tensions. 

[82]            Lastly, in awarding aggravated damages the trial judge referred to the continued presence of the offending articles on the company’s Internet website.   The Internet is a growing new medium of communication.  The trial judge correctly identified the articles’ continued presence on the website as a matter of serious concern.  It justifies the injunction granted.  However, in my view, retention of the articles on the website is not synonymous with actual malice.   Absent a finding of express malice, as is here the case, it follows from my earlier discussion that this factor does not support the award of aggravated damages. 

[83]            It follows from these reasons that I would allow the appeal against the award of aggravated damages.

3.         Special Costs

[84]            Lastly, there is the issue of special costs.

[85]            The appellants recognized in their submission that their strongest basis of complaint was a double counting argument.  That being so, and given my conclusion of aggravated damages, I would not interfere with the award of special costs.

III.        Conclusion

[86]            In summary, I would dismiss the application to adduce fresh evidence, and I would allow the appeal to the extent only of setting aside the order for aggravated damages.

“The Honourable Madam Justice Saunders”

I AGREE:

“The Honourable Chief Justice Finch”

I AGREE:

“The Honourable Madam Justice Rowles”