Court of Appeal dismisses Baines defamation appeal

On March 9, 2012, the Court of Appeal dismissed the appeal of David Baines and others from a judgment finding Mr. Baines (a newspaper columnist) and the other appellants (members of the paper's editorial staff, the paper's publisher and its proprietor) liable for defaming the Hon. Edward M. Lawson, a former member of the Senate.  

At paragraph 7 of its reasons in Lawson v. Baines, 2012 BCCA 117, the Court of Appeal set out the relevant portion of Mr. Baines' article (the underlined words being those complained of):

At the same time that Bulldog morphed into Arctic Oil & Gas, Sterling appointed Senator Edward Lawson as a director and gave him 50,000 restricted shares.

Lawson served 34 years in the Canadian Senate before retiring in 2004, making him the longest-serving senator in B.C. history.  He also served as international vice-president of the Teamsters Union for more than 26 years, a position which often landed him in controversy.

In June 1988, the US. Department of Justice filed a lawsuit under the Racketeer-Influenced [and] Corrupt Organizations Act alleging that the Teamsters Union and the union's entire executive board (including Lawson), plus 26 purported mob figures, had hijacked the union from its members.

Several months later, the suit was dropped after union executives signed a settlement agreeing to union reform.

In 2003, the union presented Lawson with the James R. Hoffa Lifetime Achievement Award in honour of the former Teamsters president. This is an award that only a Teamster could love.

Lawson also suffered the embarrassment of being identified as a close associate of Ed Carter, who along with partner David Ward was caught in a huge stock bribery scam in the mid-1980s.

Evidence at the criminal trial of Carter and Ward was that the two promoters gave Lawson shares of their rigged companies, and Lawson flew them, often free of charge, on the Teamsters executive jet he had at his disposal.

In 1986, David Ward's wife, Carol, and Lawson's wife, Beverly, became embroiled in another stock fiasco while serving as directors of an Alberta Stock Exchange company called Boston Financial Group Inc.

A Bahamian bank called Charterhouse Bank and Trust, long suspected of acting as a front for insiders, had bought 90 per cent of Boston's free-trading stock and had promptly dumped $291,000 worth of stock without filing insider trading reports.

The bank claimed it was acting as agent and couldn't reveal its clients' identity. Although regulators suspected the stock belonged to insiders or related parties, its beneficial ownership was never established.

Sterling said he met Lawson in Vancouver several months ago. "He offered to come on board [with Arctic Oil & Gas] because he believes that there is a significant benefit to be had for the country of Canada from this project," he said in an interview Tuesday.

In his statement of claim the Respondent plead (para. 14):

In their natural and ordinary meaning and in the context of the March 12 Article as whole, the false, malicious and defamatory words in the March 12 Article, bore and were understood to bear the following meanings, which are false and defamatory:

a)         The Plaintiff is corrupt;

b)         The Plaintiff was guilty of corruption under the U.S. Racketeer-Influenced Corrupt Organizations Act in his capacity as a member of the executive of the international Brotherhood of Teamsters union (the “Teamsters Union”) and that he only avoided criminal conviction under that Act by entering into a plea bargain with the U.S. government;

c)         The Plaintiff abused his office and position of trust with the Teamsters Union for his own personal benefit and financial gain by providing Ed Carter and David Ward with free travel on a Teamsters Union executive jet in exchange for free shares in companies which had been manipulated dishonestly for personal gain by Mr. Carter and Mr. Ward; and/or

d)         One or more of the above.

The appellants argued that the trial judge was incorrect in his finding that the words complained of were capable of being defamatory. The Court of Appeal found that the issues of whether or not the judge's finding would be upheld was whether or not he was correct.  The trial judge stated (quoted at paragraph 28 of the Court of Appeal's reasons) that:

[40]      As this is a trial without a jury it is not necessary for me to make an initial finding as to whether the words complained of are capable of bearing the inferential meaning alleged in the statement of claim. My task is to decide whether they in fact do bear that inferential meaning. While I must consider the words as a whole in the context of the entire column, I do propose to focus on those portions of the words complained of that make assertions with respect to Senator Lawson's involvement with Carter and Ward.

[41]      In my view the words complained of could possibly bear two inferential meanings. The first is that alleged in paragraph 15 of the statement of claim. The second is that Senator Lawson is a unethical person of poor judgment, who allows himself to become involved with questionable individuals and organizations and to gain from such involvement.

[42]      I do not think that Senator Lawson can succeed if the words bear only the second inferential meaning. I say this because to my mind that meaning would be distinct and of a different character from the defamatory meaning alleged in the statement of claim. If such is the case, Senator Lawson will not have succeeded in proving the allegations contained in paragraph 15 of the statement of claim.

[Emphasis added.]

The Court of Appeal upheld the judge's finding on this point, holding that "…the trial judge was correct in finding the the words complained of are capable of bearing the inferential meaning [plead in paragraphs 15(a) and (15(c) of] the statement of claim…" (para. 31).

The next ground of appeal was whether or not the trial judge was reasonable in holding that the worlds complained of were in fact defamatory.  The appellants argued that this part of the test should also be judged on a standard of correctness; however, after a lengthy discussion of the relevant law and secondary sources, Mr. Justice Hinkson, writing on behalf of the unanimous panel, found that the standard of review was reasonableness.  

The Court of Appeal held that the trial judge's conclusion, that the words complained of would lead an ordinary person to the conclusion that Senator Lawson had, among other things, played in active role in a scheme, abused his office, associated with convicted criminals and was corrupt, was reasonable (paras. 62-63).  The Court of Appeal concluded that the finding of the trial judge were not unreasonable and dismissed the appeal.

To read the full decision of the Court of Appeal, click here. 

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