[1] On October 8, 1999, the Vancouver Sun published a headline on its front page stating "Shakedown of developer alleged". The article was written under the by-line of Harold Munro and Rick Ouston. In the story which followed and which was continued on the whole of page A16 and on most of page A17, details of the alleged shakedown and related aspects of the story are set out. An overview of the content of the story is found in paragraphs 2 to 4 which state:

[2] The article goes on to state:

[3] Mr. Thomas says that in the article and others referred to below Ms. McMullan defamed him. Ms. McMullan says the allegations are true and pleads justification as her only defence. The onus to prove this defence rests upon Ms. McMullan. If Ms. McMullan is found liable, however, she seeks contribution and indemnity from Mr. Stewart who made the allegations to her, and from the reporters and newspapers who published the allegations.

[4] The allegations have their origin in a telephone call made by Mr. Stewart to Ms. McMullan in May 1999. Unknown to Mr. Stewart, Ms. McMullan made notes of the conversation. In the call Mr. Stewart claimed he was asked by Mr. Thomas to make a $10,000 contribution to the municipal political organization known as the Langely Leadership Team (LLT), and to join the Greater Vancouver Regional District Business Council (GVRDBC) for a fee of $10,000. Mr. Thomas was then president of the GVRDBC. The October 8 article also states, "The councillor wrote in the notes that Stewart said: 'GT [Gregory Thomas] says mayor in his pocket. Tells [mayor] what to do'."

[5] On October 9, the Vancouver Sun published a shorter follow-up article on portions of page A1 and page A2. The follow-up article contained a brief summary of some of the allegations reported on October 8. It also reported that Ms. McMullan said she would file a formal complaint with the RCMP.

[6] On October 11, a third article was published on page A4. It briefly reviewed what Ms. McMullan had said about Mr. Stewart's claims of a shakedown although it does not name Mr. Thomas. The article primarily reported on what was said to be an election campaign practice in Langley of making $99 contributions to avoid disclosure of the donor's names. It appears from the article that, whether they were correct or not, a number of people were of the view that the Municipal Act (R.S.B.C. 1979, C. 290; now the Local Government Act, R.S.B.C. 1996, c. 323) only required such disclosure for donations of $100 and above.

[7] On October 13, 1999, a fourth article was published in The Sun on pages B1 and B4. The headline states "RCMP look at political 'shake-down' claim." The article reports that Ms. McMullan filed a formal report with the police. It repeated Ms McMullan's allegations contained in the October 8 article.

[8] On October 10, 1999, the Langley Times published a story on page 7 under the headline "Thomas denies allegations". It contained Mr. Thomas' denial of the allegations, information about the story in the Vancouver Sun and comments from Ms. McMullan. The article stated that Ms. McMullan had "received a call from Stewart in May saying he was being 'shaken down'." The article also reports Ms. McMullan as saying, "I had only his [Stewart's] word" and, "All I had was a telephone call. I hoped The Sun would investigate and bring it to public attention."

[9] On October 12, 1999, the Langley Advance News published an article on page 5 under the headline "Legal action considered". The article repeats some of the allegations in the October 8 Vancouver Sun article and reports Mr. Thomas' plan to take legal action. The article states, "McMullan said she has 'new information' and would take it to the police this week."

[10] On October 12, 1999, Ms. McMullan was interviewed on radio station CKST. She repeated her earlier comments about a telephone call from Ewen Stewart alleging that he had been "shaken down" by Gregory Thomas.

[11] On October 15, 1999, the Langley Times published an article under the headline "Thomas asks for apology." Ms. McMullan is reported as saying that she had no intention of apologizing and that the information was now in the hands of the police. Included in the article are quotations from Ms. McMullan:

[12] The background leading to the publication of these articles is extensive. Because Mr. Stewart's allegation of a shakedown by Mr. Thomas turns very much on what inferences are to be drawn from the timing of events and the nuances of the conversations that took place, it is necessary to review the evidence in some detail.

[13] Mr. Stewart is engaged in the real estate development and construction business. In 1998, through a series of transactions, he acquired North West Langley Arenas Ltd. and became its president. In 1995, before Mr. Stewart's involvement in the company, the Township of Langley had agreed to rent ice time in the proposed arena but because of financial problems the arena's construction was not completed.

[14] It was Mr.Stewart's view that if the construction of the arena were to be completed it was important to reach a revised agreement with the Township of Langley on its rental of ice time. He understood that the arena had been a controversial issue in the Township. For that reason and because he did not have extensive business experience in Langley he concluded that it was important to obtain some information and understanding of the political environment in the Township.

[15] At the time the Langley Township Council consisted of the Mayor, Mr. Scholtens, and six Councillors. The mayor and three councillors were associated with the LLT. The other three, including Ms. McMullan, were not.

[16] Mr. Stewart first met Mr. Thomas on January 21, 1999. The meeting was arranged and attended by Mr. Zebroff, a realtor retained by Mr. Stewart to assist him with the commercial leasing aspect of the project. It was also attended by Mr. Schacter, a realtor who worked in the same office as Mr. Zebroff. Mr. Schacter was a member of the Township school board and a fundraiser for the LLT. It was Mr. Schacter who suggested to Mr. Zebroff that Mr. Thomas might be a knowledgeable person to contact. Mr. Schacter did not stay for the whole of the meeting.

[17] Mr. Stewart described the meeting as a "get to know you" kind of meeting. He advised Mr. Thomas that his concern was whether the Township wanted or needed more ice time. Mr. Stewart said in evidence that Mr. Thomas provided them with information about his background and about the make-up of the Langley Township Council. He advised Mr. Stewart that he had managed the mayor's last election campaign. Mr. Thomas also described the GVRDBC as an organization formed to promote the view of business on issues in the Greater Vancouver Regional District.

[18] Mr. Stewart stated that Mr. Thomas offered some good advice about the arena, and offered the opinion that an arena was still a good idea but that its financing was likely to be an important issue with the Council.

[19] Mr. Stewart says that he asked Mr. Thomas if he was available to give advice or to act as a consultant. He says that Mr. Thomas replied that he was not a consultant but if Mr. Stewart wanted advice from him he could become a member of the GVRDBC, Mr. Thomas' employer. Mr. Stewart does not recall any discussion at that meeting about the cost of membership. Mr. Stewart said that the impression he was left with was that if he joined the GVRDBC the membership fee would be Mr. Thomas' compensation. He said that he understood that Mr. Thomas would be doing whatever was needed to help get a lease through Council, but that such help might have been "offering good advice".

[20] Mr. Stewart said in cross-examination that the $99 political contributions were not discussed at the January 21 meeting.

[21] It is Mr. Stewart's evidence that, although Mr. Thomas "never put it that way", he inferred that Mr. Thomas had considerable influence with the mayor.

[22] Mr. Thomas says that in the January 21, 1999, meeting he gave Mr. Stewart "all kinds of good advice" in relation to the proposed ice rink. Mr. Stewart had offered to hire him as a consultant. Mr. Thomas says that he advised Stewart he was not a consultant but that he would be happy to give advice. He told Mr. Stewart that if Mr. Stewart wanted to help him out he could join the GVRDBC which Mr. Thomas described as a business organization focussed on regional government. It is his evidence that he advised Mr. Stewart that he would not contact councillors and that he had no influence over any public official. He said he did not want them to be under any misapprehension about that.

[23] Mr. Thomas says that in the first meeting Mr. Zebroff asked about the $99 donation scheme and that he told Mr. Zebroff and Mr. Stewart that any number of persons could make $99 donations to municipal campaigns.

[24] It is Mr. Zebroff's evidence that on January 28, 1999, Mr. Thomas dropped in to the real estate office while he and Mr. Schacter were present. There was a discussion among them about $99 cheques but Mr. Zebroff said that Mr. Thomas did not usually get involved in discussions about money.

[25] On February 25, 1999, there was an impromptu meeting of Messrs. Schacter, Thomas and Zebroff at the real estate office. Mr. Zebroff says it was Mr. Schacter who was pressing him to make a donation to the LLT. They discussed the use of $99 cheques. Mr. Zebroff agreed in cross-examination that Thomas "was keenly promoting the GVRDBC." Mr. Thomas also made suggestions for promoting the ice rink such as developing an advisory board composed of prominent Langley citizens and engaging someone such as a former NHL hockey player to make public announcements concerning the arena. At that meeting Mr. Zebroff says that there was a suggestion that he and Mr. Stewart should not work through the staff of the Township but rather at the political level. He could not recall if the suggestion came from Mr. Thomas or from Mr. Schacter.

[26] Mr. Zebroff says that on March 6 he received from Mr. Schacter a list of names of 7 LLT candidates and three organizations. He was requested to provide 10 cheques in the amount of $99 payable to each of the ten names on the list. Mr. Zebroff wrote a set of cheques to each of the names from him and a further 10 from his wife. He expected that Mr. Stewart and his staff would write the remaining eight sets of cheques. Mr. Zebroff delivered his sets of cheques to Mr. Stewart but Mr. Stewart never passed them on. Mr. Zebroff's wife subsequently requested the return of cheques issued in her name and Mr. Stewart returned them.

[27] In cross-examination Mr. Stewart agreed that most of the $99 payment pressure was coming from Mr. Zebroff and that the pressure on Mr. Zebroff was coming from Mr. Schacter. He also agreed that between January 21 and March 16 he had become horribly offended by the request to pay $10,000 to the LLT using the $99 procedure. He stated that he viewed Mr. Thomas as a lobbyist on his company's behalf and didn't think there was anything wrong with that but he was extremely uncomfortable in making out cheques to a political party.

[28] Mr. Stewart says that as a result he made a decision to go "the staff route" and meet with the municipal manager and attempt to negotiate a new lease for ice time at the arena. Some meetings took place with the manager and other staff and steps were taken in preparation of a lease. It was Mr. Stewart's view that this route was meeting with progress through March and into mid-April. It is Mr. Stewart's evidence that in mid-April the tone of discussions with municipal staff changed. He says that the municipal manager had contacted Mr. Stewart's lawyer and that the upshot was that it was necessary to seek from the Council a direction to staff that would permit staff to negotiate a lease.

[29] Mr. Stewart had met with Mr. Thomas a second time on March 30. Mr. Stewart says that during the meeting there was lengthy discussion about joining the GVRDBC. A membership fee of $10,000 was discussed. He says he asked Mr. Thomas to send him an invoice. In cross-examination he agreed he was implying to Mr. Thomas that he was interested in becoming a member. Mr. Stewart says that at that meeting Thomas advised him not to go the staff route but to pursue his goal at the political level. Mr. Stewart says that "implicit in that" was the idea that Mr. Thomas would have some say in the decision.

[30] Mr. Zebroff attended the meeting but only for the first part. While he was in attendance there was no discussion of paying any money to the LLT or the GVRDBC.

[31] Mr. Thomas says that there had not been much progress on the arrangements concerning the ice rink since the January 21 meeting. It is his evidence that at the March 30 meeting he reiterated his advice about getting user groups on side to support the leasing of ice time by the Township and other advice. He says that the emphasis of the meeting was on getting the development of the ice rink moving. He says further that in the course of the luncheon Mr. Stewart said that he hoped to make a contribution to the LLT.

[32] Mr. Thomas also says that at the meeting Mr. Stewart had said he would try to get his financial partner interested in the GVRDBC. Mr. Thomas asked if he could send an invoice and to whom it should be made out. Mr. Thomas says that on the basis of that discussion he sent a letter on behalf of the GVRDBC to Mr. Stewart as President of Casula Investments Ltd. welcoming his interest in the organization and enclosing an invoice for $10,000 membership fees.

[33] Mr. Thomas passed on to Mr. Davies, Mr. Stewart's expressed interest in making a contribution to the LLT. Mr. Davies is a solicitor who practices in Langley. He had some previous association with Mr. Thomas through the Chamber of Commerce and knew Mr. Thomas to be active in the LLT. On two or three occasions before 1999 he had been requested by Mr. Thomas to contact certain individuals and solicit a political contribution to the LLT.

[34] In 1999, Mr. Davies was asked by Mr. Thomas to seek a political contribution for LLT candidates from Ewen Stewart. Mr. Davies had never met Mr. Stewart but was aware of his business because of legal work Mr. Davies had done for lenders who loaned money to Mr. Stewart's company. Mr. Davies did not know that Mr. Stewart was involved in an ice arena.

[35] On April 7, 1999, Mr. Thomas faxed to Mr. Davies a list of names of candidates for municipal offices who were associated with the LLT. The list also included the Langley Leadership Team Campaign, the Township Taxpayers League and the Town Electors Public Safety Association.

[36] Mr. Davies wrote a note on the list that $99 contributions could be made to each of the named persons or organizations "without disclosure".

[37] Mr. Davies faxed the list and note to Mr. Stewart on April 13, 1999. It was his evidence that there was no discussion between him and Mr. Thomas of any relationship between Mr. Stewart and Mr. Thomas. He also agreed that Mr. Stewart's reaction to his telephone call was non-committal and not different from that of other people whom he had dealt with in the context of fundraising.

[38] On April 28, 1999, Mr. Stewart filed a Delegation Request to appear at the Township Council meeting on May 3, 1999, to discuss an ice rental agreement with the Township. It is Mr. Thomas' evidence that he did not know that a vote on the arena project was coming before Council. He says that he never at any time spoke to the mayor or municipal staff about the project.

[39] On May 3, Mr. Stewart appeared before Council and outlined his proposal for the ice rental agreement. The minutes of that meeting indicate that he requested the Council to direct staff to negotiate an agreement having been advised that staff were not prepared to proceed without a Council motion.

[40] A motion by Councillor McMullan that staff negotiate an agreement subject to review by Council was defeated. Two councillors who were members of the LLT and Ms. McMullan voted in favour of the motion. Mr. Stewart was not entirely certain of the procedure that followed his presentation to the Council and incorrectly believed that the vote had been in camera. He was not present for the vote and, in forming his understanding of the outcome, relied to some extent on newspaper reports of the meeting. It was nevertheless on the basis of this vote that Mr. Stewart reached a conclusion that confirmed in his mind that there had been a "shakedown". In cross-examination by counsel for Mr. Thomas, Mr. Stewart was asked:

[41] At some point following the Council meeting, Mr. Stewart phoned Ms. McMullan. The date of the call is not certain but the length of the call accords with Mr. Stewart's cell phone record of a 58 minute call on May 31, 1999. Approximately one-half of the call dealt with complaints of a shakedown. The other half concerned the project itself. Mr. Stewart did not tell Ms. McMullan that his complaint was confidential. He denies that he phoned Ms. McMullan because she was running for mayor. Ms. McMullan made notes of the call.

[42] Mr. Stewart agrees that in the course of the conversation Ms. McMullan suggested he take his complaint to the police and the newspaper. He says that he did not do so because he had an economic interest to protect. He agrees he used the word "shakedown". He denies that he told Ms. McMullan that Mr. Thomas had said he had the "mayor in his pocket" although Ms. McMullan's notes contain that phrase. He may have told Ms. McMullan that he was going to make it his personal ambition "to get these guys."

[43] Ms. McMullan thought the telephone conversation took place earlier than May 31 but on the basis of Stewart's cell phone record she agrees it could have been May 31. She says that throughout the call she suggested to Mr. Stewart that he go to the RCMP. Eventually she suggested he go to Mr. Munro of the Vancouver Sun because the newspaper has investigative reporters. She says that she had no idea whether what Mr. Stewart was saying was true. She says she passed on to Mr. Munro the developer's information that he had been shaken down.

[44] She also says that "All I knew that when I talked to Harold Munro I said I had no way of knowing if this was true."

[45] She agreed that she knew this information could be "politically devastating" to her political opponents. She said, however, that because a developer was coming to her alleging what may be criminal activity, she thought it was part of her oath of office to do something about it and "to protect the Township of Langley".

[46] Although Ms. McMullan says that within a few days of the May 31 conversation, Mr. Munro told her that Stewart had shown him all the documents, this evidence appears to be wrong in terms of timing. Such a conversation probably took place in October, not late May or early June.

[47] Between May and October, Ms. McMullan says she had a number of conversations with Mr. Munro on a variety of issues but they only talked about Mr. Stewart's allegations in generalities. In late September Ms. McMullan met Mr. Munro at the Skytrain station and rode with him on the train. At that time she gave him a copy of her notes of the May conversation. It is her evidence that she did not discuss the content of the notes with Mr. Munro.

[48] The next time Ms. McMullan spoke to Mr. Stewart after the May 31 call was October 5, three days before the first Vancouver Sun article. It was a 23-minute phone call from Ms. McMullan which Mr. Stewart says came "out of the blue". Ms. McMullan told Mr. Stewart that she needed his help. At first Mr. Stewart thought Ms. McMullan was fundraising for her mayoral campaign. He says it became clear, however, that she was looking for his help politically. Ms. McMullan urged Mr. Stewart to "go public" with his allegation and to speak to the reporter, Mr. Munro. Mr. Stewart refused. He says that it wasn't in his interest to do so and he wasn't interested in getting involved in a political campaign in Langley. In cross-examination Ms. McMullan agreed that if Mr. Stewart was not willing to make his allegations on the record that she was prepared to make them. She agreed that when Mr. Munro and Mr. Ouston interviewed her in October she knew that they were doing so for the purpose of obtaining her quotes for an intended newspaper article.

[49] Ms. McMullan made notes of her October 5 conversation with Mr. Stewart. The notes state, "I will likely get elected but need your help". They also state, "this will sink them. I need help." Mr. Stewart says that these comments were made by Ms. McMullan.

[50] Mr. Stewart was contacted by Mr. Munro a number of times beginning in May. He said little of substance to Mr. Munro until early October when Mr. Munro contacted him again about the shakedown. Mr. Stewart says that at that time Mr. Munro agreed to their discussion being off the record and on that basis he went on to discuss the shakedown with Mr. Munro. He said he told Mr. Munro the same story as he gave in evidence before the court including his feeling that he had been the victim of a shakedown. He also showed Mr. Munro the series of cheques which Mr. Zebroff had brought to Mr. Stewart.

[51] Mr. Munro covered the Langley Town Council meetings as part of his work as a reporter. He had spoken to Ms. McMullan a number of times about a number of matters but does not recall whether Ms. McMullan informed him of the alleged shakedown by telephone or at a council meeting. In his examination for discovery evidence read in at trial he agreed that he would not have run the story solely on the basis of what Ms. McMullan told him.

[52] Between May and October 1999, Mr. Munro gathered information through a series of interviews with other people including Mr. Davies, Mr. Thomas, and Mr. Schacter. He could find no other developers who would confirm being pressured for campaign donations in exchange for support for their projects.

[53] Mr. Munro was also assisted by Mr. Ouston in gathering information for the articles. Mr. Ouston interviewed Ms. McMullan, Mayor Scholtens and Mr. Zebroff.

[54] Mr. Bucholtz is the reporter who wrote the articles which were printed in the Langley Times on October 10 and 15, 1999. Because of deadlines the articles were largely based upon the October 8 article in the Vancouver Sun. Mr. Bucholtz did have conversations with Mr. Thomas and Ms. McMullan but did not take other steps to determine whether the shakedown allegation was true.

[55] Mr. Bateman is the reporter who wrote the articles which were printed in the Langley Advance News on October 12 and October 15. Mr. Bateman spoke to Mr. Thomas and Ms. McMullan. He agreed that Ms. McMullan told him that she had only Mr. Stewart's word about the allegations.

[56] In cross-examination Mr. Thomas agreed that he made the denial of the allegations to Mr. Bateman in the hope that they would be published and that the story of October 12 was a "fair assessment". He agreed that given the articles already published in the Vancouver Sun the articles in the Langley newspapers probably helped him out.

[57] Counsel for Ms. McMullan also called Mr. Moeller, a Langley businessman. He gave evidence of being solicited for funds by Mr. Thomas in 1999. He stated that he was asked to make a contribution to the GVRDBC initially in the amount of $10,000 but reduced to $5,000. It was his evidence that Mr. Thomas informed him that the funds would be used for the LLT. Mr. Thomas agreed that he had sent Mr. Moeller an invoice for fees to become a member of the GVRDBC. He denied that he was soliciting funds for the LLT or that he told Mr. Moeller that the funds would go through the GVRDBC to the LLT.

[58] Three major issues arise in the action:

1.    Did Ms. McMullan defame Mr. Thomas?

2.    If so, to what measure of damages is Mr. Thomas entitled?

3.    If Ms. McMullan is liable are the third parties also at fault and liable to contribute to and indemnify her in the degree to which they are at fault?

[59] Ms. McMullan has pleaded the defence of justification and bears the onus of proof of that defence. What she must prove is described in Gatley on Libel and Slander: 9^th ed. (London: Sweet & Maxwell, 1998) Vol. 1, p. 238:

The gist or sting of the words used by Ms. McMullan in this case is primarily that Mr. Thomas tried to "shakedown" Mr. Stewart. There is no question that in its natural and ordinary meaning this expression is defamatory. The applicable definition of "shakedown" in The Concise Oxford Dictionary, 9^th ed. is to "extort money from". I have no difficulty in recognizing that it extends to an attempt to extort money. It is also broad enough to incorporate the act of influence peddling, an offence under the Criminal Code, R.S.C. 1985, c. C-46.

[60] In cross-examination Mr. Stewart put his understanding this way:

[61] I am satisfied that Mr. Stewart believed that he had been shaken down. Whether his belief was true, however, calls for careful examination of the evidence.

[62] One aspect of that examination is the timing of the events that led Mr. Stewart to his conclusion. Mr. Stewart met Mr. Thomas on only two occasions, January 21 and March 30, 1999. Mr. Stewart, assisted by Mr. Zebroff, sought out Mr. Thomas as a person who was said to have knowledge and information about the political environment in Langley Township. Mr. Stewart's evidence is that the scheme of $99 political donations was not discussed at the January 21 meeting. The subject of joining the GVRDBC was discussed but Mr. Stewart's evidence is that he does not recall any discussion about the cost of membership.

[63] By March 16, Mr. Stewart, however, had become offended by what he considered to be a request to pay $10,000 to the LLT using the multiple $99 cheque procedure. Between January 21 and March 16, the evidence indicates that there had been considerable pressure put upon Mr. Zebroff by Mr. Schacter to make political donations using the $99 cheque procedure. On March 6, Mr. Schacter presented Mr. Zebroff with a list of the names of candidates and organizations to which the cheques should be made out. On March 8, Mr. Zebroff delivered his 20 cheques to Mr. Stewart. Mr. Stewart agreed that most of the pressure on him for $99 cheques was coming from Mr. Zebroff and that the pressure on Mr. Zebroff was coming from Mr. Schacter.

[64] The most troubling aspect of the allegations arises out of the manner in which funds were solicited for the LLT. The $99 practice and in particular, the manner in which it was said that cumulatively one could donate indirectly thousands of dollars is unseemly. Although it is not necessary for me to decide in this case, the practice is probably illegal. In my view the evidence indicates that Mr. Thomas was not an active participant in this activity.

[65] Mr. Stewart did not meet with Mr. Thomas for the second time until March 30. In the course of that meeting there was discussion about Mr. Stewart or his company joining the GVRDBC at a fee of $10,000, but little or no discussion of the $99 political contributions. Mr. Stewart encouraged Mr. Thomas to send him an invoice for GVRDBC membership which Mr. Thomas did on April 5.

[66] It was not until April 7 that Mr. Thomas contacted Mr. Davies and provided him with a list of names to send to Mr. Stewart and it was not until April 13 that Mr. Davies sent the list.

[67] In determining whether Mr. Thomas engaged in a shakedown of Mr. Stewart it is necessary to review both Mr. Thomas' conduct and his intention. I recognize that Mr. Thomas' intention must largely be inferred from his conduct. In reviewing Mr. Thomas' conduct, I take the following surrounding matters into account:

1.    Messrs. Stewart and Zebroff initiated the contact with Mr. Thomas and they came to him to draw upon his apparent political knowledge.

2.    At the first meeting Mr. Thomas gave Messrs. Stewart and Zebroff some advice about promoting the arena and he also made comments about his political relationship and history with the mayor and with the LLT.

3.    At the first meeting Mr. Thomas promoted the GVRDBC and sought to have Mr. Stewart or his company become a member.

4.    At the first and second meetings with Mr. Stewart Mr. Thomas advised against using the "staff route" to achieve a lease of ice time between the Township and Mr. Stewart's company.

5.    Mr. Thomas used Mr. Davies as the means of providing the names of candidates and organizations to whom Mr. Stewart could make contributions. I note that while Mr. Davies refers to the practice of $99 contributions his evidence makes no reference to proposed contributions in the amount of $10,000.

6.    On April 28 Mr. Stewart filed a delegation request to appear before the Township Council and on May 3 he appeared before Council. A motion by Councillor McMullan that staff negotiate an agreement subject to review by Council was defeated. I find that Mr. Thomas did not know of the delegation request or the motion until after May 3.

7.    As a result of the Council vote Mr. Stewart concluded that he had lost the vote because he had not paid $10,000 to the LLT and $10,000 to join the GVRDBC.

8.    Although Council did not approve Councillor McMullan's motion it did not end its negotiations with Mr. Stewart. That is evident from Mr. Stewart's letter of May 12, 1999 to the mayor and council.

[68] Counsel for Ms. McMullan has submitted that Mr. Thomas is not a credible witness and that his evidence conflicts with the evidence of Messrs. Schacter, Davies and Moeller. I do not find the conflict with the evidence of Mr. Schacter to be significant, and note as well that Mr. Schacter confirmed that Mr. Thomas was not an active fundraiser for the LLT in 1999. The conflict with the evidence of Mr. Davies was on the issue of whether Mr. Thomas had dealt with Mr. Davies in Mr. Davies' capacity as a solicitor, thereby making their communications subject to privilege. This objection was taken by Mr. Thomas on the advice of counsel on his examination for discovery but not at trial. I am not satisfied that Mr. Thomas used Mr. Davies' fundraising assistance as a means of concealing his own involvement. The conflict with the evidence of Mr. Moeller was essentially related to whether the GVRDBC was also being used as a vehicle to raise political donations for the LLT. While Mr. Moeller was an objective witness, I found his recollection to be somewhat vague and therefore not reliable.

[69] I do not agree with the submission of counsel for Ms. McMullan that if Mr. Thomas' story is true it necessarily follows that Mr. Stewart invented the shakedown allegation. The fact that Mr. Stewart drew particular inferences from the events which occurred does not mean that they were the only reasonable inferences or that they were correct. It is clear that Mr. Stewart's conclusions were heavily influenced by the vote of the Township Council on May 3 and further influenced by the fact that he believed his negotiations with Township staff to be progressing well. The Council vote, however, must be seen in light of a lengthy history of financial concerns about the arena, the resulting political nature of the decision, and the fact that the Council did not, although Mr. Stewart seems to have so inferred, reject any future relationship with the arena.

[70] In summarizing this assessment of the evidence I conclude that Mr. Thomas was keen to promote the GVRDBC to Mr. Stewart. I also conclude from the evidence and my own observation of him as a witness that it was important to Mr. Thomas to be seen as a political insider. I am not satisfied on the balance of probabilities, however, that Mr. Thomas was attempting to engage in a shakedown of Mr. Stewart. As a result, I conclude that Ms. McMullan has not proven the truth of the comments she has made about Mr. Thomas.

[71] An issue related to the alleged shakedown is whether Ms. McMullan's repetition of the allegations in the radio broadcast on station CKST on October 12, 1999, constituted a libel of Mr. Thomas. It was submitted by counsel for Ms. McMullan that the comments constitute slander and, because special damages are not claimed by Mr. Thomas, this part of the claim must fail. In my view that submission is answered by s. 2 of the Libel and Slander Act, R.S.B.C. 1996, c. 263, which constitute defamatory words in a broadcast as libel. In addition, words imputing a crime, as do the allegations in this case, constitute an exception to the requirement for special damage.

[72] In addition to the allegation of a shakedown the October 8, 1999 Vancouver Sun article written by Mr. Munro refers to the statement in Ms. McMullan's notes that "GT says mayor in his pocket. tells [mayor] what to do". Mr. Thomas says that this is a further defamatory statement.

[73] Counsel for Ms. McMullan notes that the article precedes the quote with, "The councillor wrote in the notes that Stewart said". He argues that Ms. McMullan's notes do not attribute the quoted words to Mr. Stewart, Mr. Thomas or anyone else and therefore the libel was not published by Ms. McMullan, but rather by Mr. Munro.

[74] The quotation is drawn from Ms. McMullan's notes which she gave to Mr. Munro. In her evidence at trial Ms. McMullan stated that she thought Mr. Stewart used the quoted words but she could not recall what he said immediately before or after them. In my opinion the words are defamatory and Ms. McMullan is liable for them.

[75] It is alleged that Ms. McMullan further defamed Mr. Thomas in her statement quoted in the Langley Advance News of October 12, 1999, that she had "new information" and would take it to the police that week. In her evidence at trial Ms. McMullan said that the "new information" was the article in the Vancouver Sun and the fact that the article had been reviewed by the paper's lawyers before publication. I do not accept Ms. McMullan's explanation of her statement. In my view she implied and intended to imply that she had obtained further substantive evidence of the alleged shakedown. She did not have such evidence and this statement added to the sting of the libel.

[76] Mr. Thomas also claims that he was defamed by Ms. McMullan in a publication in the Langley Advance News on October 12, 1999, under the headline "McMullan 'harassed' dissidents". The article refers to the contents of a 1996 tape recording of a conversation between Ms. McMullan and Mr. Dean Drysdale who later became a Langley Township Councillor. The recording was made by Mr. Drysdale without Ms. McMullan's knowledge. The article does not refer to the shakedown allegations or surrounding events. Mr. Thomas agreed in cross-examination that he encouraged Mr. Drysdale to take the tape to the newspaper and was happy to see the story published. He also agreed that he had decided to "fight back" to ensure that Ms. McMullan would not succeed in her campaign to become mayor in the approaching election.

[77] I agree with the submission of counsel for Ms. McMullan that if any of the comments on the tape were defamatory of Mr. Thomas they were slander and not libel. As Mr. Thomas makes no plea of special damages, the claim against Ms. McMullan must fail (see Gatley on Libel and Slander 9^th ed. (London: Sweet & Maxwell, 1998) Vol.1, p. 69).

[78] In summary, the primary sting of the libel is contained within the allegation of a shakedown by Mr. Thomas. It is exacerbated by Ms. McMullan's release of her note of the conversation with Mr. Stewart in which it was stated that Mr. Thomas had the mayor "in his pocket", and further exacerbated by Ms. McMullan's statement that she had "new information" to take to the police.

[79] At para. 182 of Hill v. Church of Scientology of Toronto (1995), 126 D.L.R. (4^th) 129 the Supreme Court of Canada noted the factors that may be taken into account in assessing general damages by reference to Gatley on Libel and Slander, 8^th ed. (London: Sweet & Maxwell, 1991) at pp. 592-3. Identified as factors in para. 1451 of the text are:

[80] Mr. Thomas is a 40-year-old businessman who has lived in Langley since 1973. He has been active for many years in political organizations at the municipal, provincial and national level. In the mid-1980s he worked in Ottawa as an assistant to two cabinet ministers. He has also participated in a number of community organizations in the Langley area. It is Mr. Thomas' belief that future political activity has been wiped out because he is now seen as a liability to those he may wish to assist and support

[81] Mr. Thomas is a registered mortgage broker but not presently active in that employment. At the time of the publications Mr. Thomas' main source of income was his employment with the GVRDBC. It is his evidence that it was necessary for him to resign that position following the publication of the allegations and that he has suffered a loss of income as a result. While Mr. Thomas has not claimed special damages for loss of income, I note that in Hodgson v. Canadian Newspapers Co. (2000), 189 D.L.R. (4^th) 241 (Ont. C.A.) Sharpe J.A. stated at para. 69:

While the evidence is not well documented, I am satisfied that Mr. Thomas suffered loss of income following the defamation.

[82] Mr. Thomas' wife described her observations of the effect of the publication upon her husband. She said that Mr. Thomas became stressed, withdrawn and short tempered and it affected his relationship with his wife and children. Mr. Thomas reduced income has had a financial impact upon the family. In addition Mrs. Thomas testified that friends who were initially supportive appeared to change their opinions over time.

[83] The libel is a serious one in that the allegation of a shakedown implies extortion and influence peddling. Both are criminal offences. The libelous comment was initially made in a newspaper of wide circulation throughout the province and repeated in both newspapers circulating in the Langley area. It was repeated again by Ms. McMullan on radio station CKST. It was exacerbated by Ms. McMullan's additional statements that she had new information to take to the police.

[84] In addition, Ms. McMullan refused to apologize to Mr. Thomas, she alleged in her pleadings but did not prove that the alleged conduct of Mr. Thomas was part of a pattern of conduct by him, and she unsuccessfully maintained a plea of justification throughout the case. I consider these matters to be aggravating circumstances.

[85] I think that Ms. McMullan believed the allegations to be true. I think her initial position was that as a councillor in the Township of Langley she had some duty to take steps in relation to Mr. Stewart's allegations. In my view, however, the fact that she was running for mayor in October caused her to act not only out of a sense of duty but out of a desire to advance her political campaign against the LLT. This is evidenced by her comment to Mr. Stewart that if he would make his allegations public, "This will sink them." In spite of that, I do not think Ms. McMullan's conduct was such that it gives rise to an award of punitive damages. This is not a situation "where the defendant's misconduct is so malicious, oppressive and high-handed that it offends the court's sense of decency" (Hill v. Church of Scientology of Toronto, at para. A96).

[86] In Taylor-Wright v. CHBC-TV (2000), 82 B.C.L.R. (3d) 50 (C.A.) Esson J. A. stated at para.68:

In Taylor-Wright the defamation related to the misapplication by the plaintiffs of funds donated for a food bank. Esson J.A. upheld awards of damages of $25,000 and $35,000 to the two plaintiffs but found them to be at the low end of the range. I consider the nature and circumstances of the defamation of Mr. Thomas to be more serious than in that case.

[87] I have reviewed the cases referred to by counsel. I have considered that Mr. Thomas has suffered some pecuniary loss and that there are aggravating circumstances. Taking these matters into account, I have concluded that Mr. Thomas is entitled to general damages in the amount of $70,000.

[88] In paragraph 9 of her Third Party Notice Ms. McMullan pleads:

In her Notice Ms. McMullan relies on the facts pleaded in her Statement of Defence. In her Statement of Defence she pleads that each of the third parties spoke to her and that she told them what she had been told by Mr. Stewart. She states, however, that each of the third parties also spoke to others and, in making their decisions to publish, each of them relied on the statements of others and not on the statements made to them by Ms. McMullan.

[89] Each of the third parties submits that Ms. McMullan's pleadings are not sufficient to support a cause of action against them. They say that there have not been pleaded material facts which constitute a cause of action, and, in particular, there is no claim that the third parties defamed the plaintiff. They say that, as a result, the third party claim should be dismissed.

[90] While the third parties individually advance additional defences which will be addressed below, I will first deal with the ground that no claim is made that the third parties defamed Mr.Thomas.

[91] Ms. McMullan's third party claim is founded on s. 4 of the Negligence Act, R.S.B.C. 1996, c. 333. Section 4 provides:

4(1) If damage or loss has been caused by the fault of 2 or more persons, the court must determine the degree to which each person was at fault.

(2) Except as provided in section 5 if 2 or more persons are found at fault

[92] It is clear that "fault" in s. 4 extends beyond negligence to include intentional torts such as defamation (see Brown v. Cole (1995), 14 B.C.L.R. (3d) 53 (C.A).

[93] The interpretation of s. 4, however, has proven to be difficult. Its application was explored in Brown v. Cole and, earlier, explored in more detail in Tucker (Public Trustee of) v. Asleson (1993), 78 B.C.L.R. (2d) 173 (C.A.). In Asleson the plaintiff settled with one of the defendants prior to trial. The issue was whether the settlement severed the joint and several liability imposed by s. 4 of the Negligence Act. While that issue does not arise in this case, the interpretation of s. 4 set out in the decision is significant.

[94] In Asleson Southin J.A. referred to passages in Glanville Williams' book Joint Torts and Contributory Negligence, (London: Stevens & Sons Limited, 1951) c.1, p.1, and concluded at para. 108 that s. 4 applies to "several concurrent tortfeasors." Several concurrent tortfeasors are tortfeasors whose torts concur in the chain of causation to produce the same damage.

[95] At para 116 Southin J.A. states:

[96] In my view, by pleading s. 4 of the Negligence Act, Ms. McMullan has pleaded that the third parties are several concurrent tortfeasors in causing the damage alleged by Mr. Thomas. In paragraph 9 of her Third Party Notice Ms. McMullan also refers to Mr. Thomas' allegations that Mr. Stewart's statements were "untrue, incomplete, or misleading". In addition, Ms. McMullan's Statement of Defence refers to the publications made by the third parties. I note that none of the third parties brought an application seeking particulars. I conclude that in pleading s. 4 of the Negligence Act, by referring in paragraph 9 of her Notice to untrue, incomplete or misleading statements, and by referring to the publications of the third parties, Ms. McMullan's third party claim has been adequately pleaded. As a result her claim for contribution is properly before the court.

[97] The third party claim against Mr. Stewart is based in large measure on Ms. McMullan's allegation that the Vancouver Sun published the defamatory statements in reliance on what Mr. Stewart said to its reporters. In support of that position Ms. McMullan refers to the evidence of Mr. Munro that he would not have run the story "solely on the basis" of what Ms. McMullan told him. Ms. McMullan says that the only other source identified was Mr. Stewart and inferentially Mr. Stewart was the "operative cause" of the publication.

[98] There is very limited evidence before the court of the factors that led to a decision by the Vancouver Sun to publish its articles. I am satisfied that Ms. McMullan's willingness to disclose the allegations was an important factor. I am not satisfied that the suggested inference of Mr. Stewart's being the "operative cause" is supported by the evidence.

[99] Counsel for Ms. McMullan argued further that Mr. Stewart's confirmation to Mr. Munro of his allegations constituted an authorization by him of the publication of the allegations. He submits that Mr. Stewart is therefore liable for the republication of the defamatory remarks as was the defendant in St. Michael's Extended Care Centre Society v. Frost, (1994), 18 Alta. L. R. (3d) 65 (Q.B.).

[100] Mr. Stewart, however, resisted discussing his allegations with the media in spite of the urging of Ms. McMullan that he "go public" with them. It is clear from his evidence that he was concerned that any comment he might make to the media would jeopardize the contract he was seeking with the Township of Langley. As a result Mr. Stewart insisted that his conversation with Mr. Munro in October 1999 be "off the record".

[101] In Gatley on Libel and Slander, 9^th ed. (London: Sweet & Maxwell, 1998) Vol. 1, the author states at pp. 155-6:

The italicized portion of that statement is footnoted by the authors. They suggest that an "off the record" restriction is an example of a circumstance where the original publisher may not have authorised or intended a republication. In my view, an off the record conversation with a reporter is a circumstance where republication may not be the natural and probable result of the original publication. Such a result does not, in my view, conflict with St. Michael's Extended Care Centre Society v. Frost.

[102] Mr. Stewart understood an "off the record" comment to mean that what he told the reporter would not be printed or used in a public way. None of the defamatory statements particularized by Mr. Thomas is a statement attributed to Mr. Stewart. I am not satisfied that the publication of Ms. McMullan's statements in the Vancouver Sun was the natural and probable result of Mr. Stewart's conversations with Mr. Munro.

[103] As a result, I conclude that Ms. McMullan has not proved that Mr. Stewart caused the damage alleged and proven by the plaintiff. Mr. Stewart is not at fault in causing the damage to Mr. Thomas and Ms. McMullan is not entitled to a contribution from Mr. Stewart.

[104] The third parties, Mr. Bucholtz and Langley Times submit that the articles published by them October 10 and 15, 1999, are not defamatory, and if they were, they were made on an occasion of qualified privilege. Although both articles make substantial reference to Mr. Thomas' denial of the allegations and his demand for an apology from Ms. McMullan, they also republish Ms. McMullan's defamatory statements. In republishing her defamatory statements I conclude that the articles defame Mr. Thomas.

[105] Were the defamatory statements published on an occasion of qualified privilege? In Moises v. Canadian Newspaper Co. (c.o.b. Times Colonist) (1996), 24 B.C.L.R. (3d) 211 (C.A.) at para. 19 the Court of Appeal affirmed the definition of such an occasion as stated by Lord Atkinson in Adam v. Ward, [1917] A.C. 309 (H.L.) at 334:

The Court of Appeal both distinguished Parsons v. Windsor Star (1989), 71 O.R. (2d) 5 (Ont.H.C.) at paras. 66-70 and rejected the argument that qualified privilege will attach whenever a newspaper republishes a story in a fair and balanced manner.

[106] The Court recognized, however, that several of its decisions have upheld a plea of qualified privilege although the words complained of were published to the public generally. Express mention was made of Parlett v. Robinson (1986), 5 B.C.L.R. (2d) 26 (C.A.). A similar case frequently referred to is Stopforth v. Goyer (1979), 97 D.L.R. (3d) 369 (Ont. C.A.). Counsel for Mr. Bucholtz and the Langley Times submits that the privilege should also apply in the case at bar.

[107] In both Parlett v. Robinson and Stopforth v. Goyer the defendants were individuals and not newspapers. They were found to have a duty to the public. Can it be said in this case that Mr. Bucholtz and the Langley Times had a duty to publish "to the world" such that it could be said this was an occasion of qualified privilege?

[108] The general position is stated in P.E. Brown, The Law of Defamation in Canada, 2^nd ed. Scarborough: (Carswell, 1994) Vol. 1, p. 866:

[109] The decision in Moises confirms the continuing validity of that statement and is binding on this court. In my view, no legal, social, or moral duty of the Langley Times has been made out. I conclude that the defence of qualified privilege claimed by Mr. Bucholtz and the Langley Times cannot succeed. In the result I find that they are parties at fault in the defamation of Mr. Thomas and that s. 4 or the Negligence Act applies. They are liable to contribute to the damages assessed against Ms. McMullan.

[110] The submissions made by the third parties Mr. Munro, Mr. Ouston and Southam Inc. in relation to the Vancouver Sun articles, and by the third parties Mr. Bateman and Advance Newspaper Ltd. in relation to the Langley Advance News articles are similar to those made by Mr. Bucholtz and the Langley Times. For the reasons I have stated concerning Mr. Bucholtz and the Langley Times, I conclude that in their republication of the defamatory statements of Ms. McMullan they defamed Mr. Thomas. They are, therefore, parties at fault and liable to contribute to the damages assessed against Ms. McMullan.

[111] As a result it is necessary to determine the degree to which each party is at fault. In making that determination there are a number of factors to take into account. I note the following considerations:

1.    Ms. McMullan is at fault for defamatory statements in three newspapers and one radio station;

2.    Ms. McMullan bears responsibility for the aggravating circumstances of refusing to apologize to Mr. Thomas, alleging but not proving that Mr. Thomas' conduct was part of a pattern of similar conduct, and unsuccessfully maintaining a plea of justification;

3.    Ms. McMullan actively pursued publication of the articles in the Vancouver Sun as is evidenced by her willingness to speak on the record to the reporters when she could not convince Mr. Stewart to do so;

4.    The Vancouver Sun articles characterized Ms. McMullan's statements as "allegations" and went on to publish Mr. Thomas' denial of them;

5.    Mr. Thomas initiated contact with the two Langley papers to make his denials, to give his side of the story, and to make known that he had demanded an apology from Ms. McMullan. His position was given prominence by the two newspapers even though the defamatory statements were also stated;

6.    The initial story in the Vancouver Sun was on its front page and it is a newspaper of much wider circulation that the two Langley papers. I consider this a factor in assessing the relative fault of the Vancouver Sun third parties and the two Langley papers.

[112] It is my conclusion that Ms. McMullan is primarily and substantially at fault for the defamation of Mr. Thomas. Because of its wider circulation and the prominence it gave to the story, I consider the fault of the Vancouver Sun third parties to be relatively higher than that of the two Langley papers.

[113] Section 4 of the Negligence Act requires the court to determine the degree "to which each person was at fault". In the third party claim as it relates to the newspapers there are essentially three "groups" of newspaper third parties. Submissions were made on that basis and arguments as to allocation of fault were put in terms of each newspaper group rather than the individual third parties. In spite of that, I consider Ms. McMullan's third party claim to have been made out against each third party except Mr. Stewart.

[114] Neverthless, I intend to assess the degree of fault as between the three newspaper "groups" in the hope and expectation that counsel can agree on an appropriate order that meets the requirements of s. 4. If counsel cannot agree, I will hear submissions on the allocation.

[115] I find Ms. McMullan to be 80% at fault. I find the "Vancouver Sun group" to be 10% at fault. I find the "Langley Advance group" to be 5% at fault. I find the "Langley Times group to be 5% at fault.

[116] In summary I conclude that:

1.    Ms. McMullan defamed Mr. Thomas

2.    Mr. Thomas is entitled to damages from Ms. McMullan in the amount of $70,000;

3.    Ms. McMullan's third party claim against Mr. Stewart is dismissed;

4.    Ms McMullan's third party claim against the other third parties is allowed, the degree of fault being allocated as follows:

i) Ms. McMullan is 80% at fault;

ii) The "Vancouver Sun Group" is 10% at fault;

iii) The "Langley Advance Group" is 5% at fault; and

iv) The "Langley Times Group" is 5% at fault.

[117] The parties reserved their submissions on costs until after judgment was rendered. In the event that counsel cannot agree on costs, they may be spoken to.

"Bryan F. Ralph, J."
The Honourable Mr. Justice Bryan F. Ralph

These Reasons for Judgment were released from the Vancouver Registry on February 6, 2002 and are date stamped accordingly.