In an interesting recent decision by the Ontario Court of Appeal, the Court held that statements made by an enforcement agency, in this case the Competition Bureau, in relation to a criminal investigation, can be defamatory (see: TPG Technology Consulting Ltd. v. Canada (Industry Canada) 2012 ONCA 87 (Ont. C.A.)).
This decision is interesting for the Court’s analysis of Canadian defamation law, including the test to strike out a defamation claim, as well as its discussion of the distinction between statements that merely describe an accused being charged or investigated compared to those that suggest an accused is guilty of an offence.
According to the appellants, the Bureau’s charges against them and others of bid-rigging in violation of section 47 of the Competition Act and the manner in which those charges were communicated to the public were part of a “deliberate and malicious effort” to discredit and harm them. The Bureau’s position was that the appellants had been charged with bid-rigging and the following statements were incapable of bearing a defamatory meaning:
“As a result of the agreement, the bidders were allegedly able to maximize the rates at which services were to be provided to the various departments.
… the Bureau’s best weapons to combat these secret criminal anti-competitive agreements. …
Some recent studies suggest that in cases where bid-rigging occurs, the price paid for the good or service typically increases by about 20 percent. …
The Bureau found evidence indicating that several IT services companies in the National Capital Region secretly coordinated their bids in an illegal scheme to defraud the government by winning and dividing contracts, while blocking out honest competitors. …
Bid-rigging is a criminal offence where bidders secretly agree not to compete or to submit bids that have been pre-arranged among themselves. Their goal is to thwart the competitive tendering process and inflate prices to purchasers.
Charges laid against 7 companies and 14 individuals based on allegations that the parties entered into agreements to coordinate their bids in an illegal scheme to defraud the government by winning and dividing contracts for information technology services.”
The motions judge had struck the appellants’ defamation claim on the ground that the allegedly defamatory words were incapable of bearing defamatory meaning.
On appeal, the Ontario Court of Appeal set aside that order and in its decision provided guidance for determining whether such claims should be dismissed at the pleadings stage pursuant to a motion to strike.
As the Court noted, a motion to strike should succeed only where it was “plain and obvious” that the impugned statement was not capable of bearing defamatory meaning, citing Mantini v. Smith Lyons LLP (2003), 64 O.R. (2d) 516 (C.A.).
The Court held that the lower court judge had correctly characterized the issue, as to whether the respondents “went beyond simply stating that the appellants had been charged with bid-rigging” and, specifically, whether the statements implied that they had “engaged in conduct more serious and blameworthy.”
In this regard, the Court reasoned, relying on several secondary authorities, that reporting that someone was under investigation, or had been charged with, a criminal offence was not the same as saying that a person had committed the crime “unless there is something in the language … that suggests the plaintiff’s guilt.” The Court held, however, that reports of arrest or charges can nevertheless be capable of conveying a defamatory meaning “where it is stated, either directly or by clear implication, that an offence has been committed, and the qualifications contained in any of the surrounding statements are not sufficient to outweigh or nullify the effect of what appears to be a plain statement of fact,” citing Shave v. West Australian Newspapers Ltd., [2000] W.A.S.C. 172 (S.C.).
The Court distinguished between reports that merely state that a person was under investigation (or charged with an offence) from those that assert “directly, or by clear implication, that the plaintiff has been involved in … a criminal offence.”
The appellants’ pleadings raised questions of fact that were not capable of being determined on a pleadings motion, the Court found. It also found that the lower court judge failed to delineate the stages of the process to determine whether a statement was capable of defamatory meaning – one involving a question of law and the other a question of fact (i.e., whether the challenged words actually conveyed defamatory meaning).
In specifically considering the Bureau’s statements in issue, the Court held that it was at least arguable that they suggested that the appellants were guilty of fraud and price inflation. The Court also held that it was not plain and obvious that the impugned statements were incapable of bearing a defamatory meaning.
Based on these reasons, the Court allowed the appellants’ appeal and set aside the motion judge’s order dismissing the appellants’ defamation claim.
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