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Civil Litigation, Defamation

Everyone loses in cautionary New Brunswick defamation case

A recent New Brunswick decision is a cautionary tale for all involved in defamation claims, Toronto lawyer and mediator Howard Winkler tells AdvocateDaily.com.

The case involved a gallery owner who won $3,000 in damages and costs from an artist who badmouthed her online during a dispute over payment.

But Winkler, principal and founder of Winkler Dispute Resolution, says the gallery owner’s victory rang somewhat hollow, considering the small recovery, as well as the time and cost of bringing the action, seeking between $25,000 and $50,000 in general damages alone.

“This decision is a cautionary tale in several respects,” Winkler says. “Not only should people be careful about what they post online, but they must also be careful when deciding what to sue someone over.”

According to the court ruling in the case, the events in question date back to late 2013, when one of the artist’s pieces was sold by the gallery for $4,000. About a year after the sale, when the gallery owner told the court she was suffering from business and personal problems, the artist was still waiting for his full share. He then took to Facebook to vent his frustrations in a post, part of which accused the gallery owner of “theft.”

Separately, the artist won around $750 from the gallery owner, including costs, in a small claims action he launched over the underlying payment dispute.

According to Winkler, the defamation case came down to the artist’s use of the word “theft,” which the judge invoked in dismissing his defences of both justification and fair comment.

“Everyone is entitled to comment fairly on matters of public interest and such comments are protected against claims of defamation. That does not include a reference to someone as engaging in a criminal activity such as theft,” wrote the judge, who noted the distinction between a person who steals and someone who avoids paying debts. 

Winkler, who was not involved in the matter and comments generally, says the case was a close one, and that the result could easily have gone the other way.

“The word ‘theft’ suggested an element of criminality to this judge, but in the context of the overall post, another judge or reasonable reader could easily have come to the conclusion that the meaning was not defamatory and that the use of the word 'theft' meant nothing more than that the gallery owner was keeping money that properly belonged to the artist,” he says. “In matters like this, the result is often a bit of a crapshoot.”

In addition, Winkler says the case demonstrates the inadequacy of the judicial system when it comes to dealing with matters of reputation.

“The impact of defamatory posts, particularly online, is immediate, but here, it was not resolved until many years later,” he says. “The passage of time was so great, that both parties had probably moved on with their lives.”

If anything, Winkler notes the court case and subsequent news coverage merely rehashed a dispute that makes neither side look good.  

“For the gallery owner, this was a victory with respect to the judgment, but it’s possible it did more harm than good by reminding everyone about the fact she had broken a promise to pay an artist,” he says.  

The $450 the gallery owner won in costs is also likely to pale into significance with her legal fees, even though the action proceeded under New Brunswick’s simplified procedure, says Winkler, noting that both sides were represented by counsel at trial.

“From a financial perspective, everyone lost, especially when you put it in the context of a sculpture that was valued at $4,000,” he says.

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