



COURT OF APPEAL FOR ONTARIO

CITATION: Cable Assembly Systems Ltd. v. Barnes, 2019 ONCA
    1013

DATE: 20191223

DOCKET: C66641

Roberts, Zarnett and Jamal JJ.A.

BETWEEN

Cable
    Assembly Systems Ltd. and Brian Manese

Plaintiffs (Respondents)

and

Ben Barnes and The Corporation of the
    City of Brantford

Defendants (Appellants)

David A. Potts, for the appellants

Peter A. Downard and Dennis M. Touesnard, for the
    respondents

Heard: December 17, 2019

On appeal from the judgment
    of Justice R. John Harper of the Superior Court of Justice, dated January 29,
    2019, with reasons reported at 2019 ONSC 97.

REASONS FOR DECISION

[1]

The appellants appeal from the judgment that they pay the respondents
    general damages for defamation in the amount of $75,000 and punitive damages in
    the amount of $75,000.

[2]

The appellants raise numerous grounds of appeal
[1]
.
    The appellants challenge the trial judges findings of defamation, malice and
    abuse of public office and position and take issue with the award of punitive
    damages.

[3]

To provide a proper framework for the analysis of these issues, it is
    necessary to set out a brief factual background, including a summary of the
    trial judges reasons.

[4]

This action arises out of derogatory statements about the respondents
    that Ben Barnes, in his capacity as Manager of Network Services for the City of
    Brantford, made during a meeting on September 30, 2014, to Chris Earl, the
    sales representative of Belden CDT Inc. Mr. Barnes made all City decisions on
    the award of contracts for cabling services with a value of up to $25,000.
    Contracts of higher value were subject to a mandatory tender process.

[5]

Belden manufactured and supplied cable used in installation work
    required by the City of Brantford. The respondent, Cable Assembly Systems Ltd.
    (CAS), of which Brian Manese is the principal, is a Certified Systems Vendor
    (CSV) of Belden cable. From the mid 1990s to 2013, CAS performed all the
    cable installation work for the City of Brantford.

[6]

From 2011 to 2013, Mr. Barnes caused the City to continue to engage CAS.
    Issues arose between Mr. Barnes and Mr. Manese. Mr. Manese objected to the
    Citys use of other cable installers without providing specifications for the
    projects or stipulating required standards of cables. Mr. Barnes criticized the
    quality of CAS work. Mr. Manese escalated the dispute, meeting with Mr.
    Barnes superior, Helen English, and then her superior, Darryl Lee. Still
    frustrated by what he perceived as an unsatisfactory response from the City, Mr.
    Manese raised his concerns about Mr. Barnes with a City councillor.

[7]

Aware of Mr. Maneses complaints about him, Mr. Barnes met on September
    30, 2014, with Mr. Earl and complained about CAS workmanship, describing it as
    poor. He showed Mr. Earl photographs of CAS work, without disclosing that the
    issues depicted in the photographs had been resolved well over a year earlier.
    He urged Belden to certify as a CSV a contractor Mr. Barnes was using, Ramkey,
    incorrectly stating that CAS was the only Belden CSV in the City of Brantford.
    Mr. Barnes also stated that Brantford Hydro would not use CAS, although
    CAS had never performed or sought to perform any work for Brantford Hydro. He
    also intimated that there was an issue with his predecessor and Mr. Manese and
    the number of invoices, and that he was happy to say that he had reduced that
    number.

[8]

In their statement of defence, the appellants denied the latter two
    statements, but admitted that Mr. Barnes had uttered the other statements and
    claimed they were true or made with an honest belief in their truth and as fair
    comment, and published on an occasion of qualified privilege.

[9]

The trial judge rejected the appellants defences. He found that Mr.
    Barnes had made all the statements attributed to him, that they were defamatory
    of the respondents and that he acted in a malicious manner in response to Mr.
    Maneses complaints, by attempting to malign the reputation of CAS and Mr.
    Manese with Belden. The trial judge also concluded that Mr. Barnes abused his
    position as a public officer by making the defamatory statements and by
    refusing for improper or ulterior motives to hire the services of CAS after
    October 2014.

[10]

Finding
    that CAS reputation was placed in serious jeopardy by Mr. Barnes statements,
    which could have had a serious negative impact on CAS business, the trial
    judge determined that the damage to CAS reputation merited damages in the
    amount of $75,000. He did not award any damages for the tort of abuse of public
    office; however, the trial judge concluded that Mr. Barnes malicious actions
    and abuse of his position warranted an award of punitive damages in the amount
    of $75,000.

[11]

We
    are not persuaded that there is any basis for appellate intervention with
    respect to the trial judges findings of defamation, malice and abuse of
    position. The trial judges findings are amply supported by the record and the
    appellants admissions in their statement of defence. He properly cited to and
    applied the governing principles to determine the issues of defamation, malice
    and abuse of position.

[12]

The
    trial judges determination that Mr. Barnes, in his capacity as a public
    officer of the City of Brantford, acted maliciously in that he made
    representations that were purposely false and misleading with the intention to
    damage the reputation of CAS (para. 36), was firmly grounded in the evidence
    that the trial judge was entitled to accept. So was the trial judges finding
    at para. 67 of his reasons:

Barnes comments in the meeting Earl were not germane or
    reasonably appropriate to the occasion of the September 30, 2014 meeting. I
    also find that Barnes had an ulterior motive. He was responding to the many
    complainants Manese had made about him to his superiors. As a result, he acted
    in a malicious manner by attempting to malign the reputation of CAS Ltd. and
    Manese. Give this finding the Defendants cannot rely on a defence of qualified
    privilege.

[13]

The
    trial judges findings foreclosed any defence of honestly held belief, fair
    comment or qualified privilege. The trial judges findings also supported his
    award of general damages.

[14]

We
    do not reach the same conclusion, however, with respect to the trial judges
    award of punitive damages. In our view, the trial judge erred in making this
    award.

[15]

The
    entirety of the trial judges rationale for his award of punitive damages
    appears at para. 76 of his reasons as follows: Given my finding that the
    actions of Barnes were malicious, and an abuse of his position, the Plaintiffs
    are entitled to punitive damages in the amount of $75,000. The trial judge
    sets out no basis for the Citys liability for punitive damages.

[16]

Punitive damages, unlike compensatory damages, are not at large.
    As a result, an appellate court has a much broader scope for review on an
    appeal from an award of punitive damages. As Cory J. stated in
Hill v.
    Church of Scientology of Toronto
, [1995] 2 S.C.R. 1130, at para. 197,
[t]
he
    appellate review should be based upon the court's estimation as to whether the
    punitive damages serve a rational purpose.

[17]

It
    is well established that punitive damages are exceptional for malicious
,
oppressive and high-handed
    misconduct that offends the court's sense of decency": per Binnie J. in
Whiten
    v. Pilot Insurance Co.
, 2002 SCC 18, at para. 36. They are only to be
    awarded where compensatory damages are inadequate to accomplish the objectives
    of retribution, deterrence, and condemnation:
Pate Estate v.
    Galway-Cavendish (Township)
, 2013 ONCA 669, at para. 211;
Filice v.
    Complex Services Inc.
, 2018 ONCA 625, at para. 57.

[18]

When considering whether to award punitive damages and in
    quantifying those damages where such an award is justified, trial judges must
    consider the punitive components of the compensation otherwise awarded and
    determine whether they adequately serve to achieve the objectives of retribution,
    deterrence and condemnation.
Failure
    to do so is an error in principle. See:
Pate
, at para. 214;
Filice
, at paras. 59-61.

[19]

In
    this case, the trial judge did not engage in any analysis of why the
    compensatory award that he decided on was inadequate to achieve the objectives
    of retribution, deterrence and condemnation. In failing to do so, he committed
    an error in principle.

[20]

In
    our view, the $75,000 compensatory award of general damages for defamation was
    adequate to achieve the objectives of retribution, deterrence and condemnation
    in the circumstances of this case. These circumstances involved utterances made
    during one meeting to an interlocutor sympathetic to the respondents which had
    no actual effect on their reputation or business interests. Aggravating
    circumstances that served to increase the award of general damages included the
    trial judges findings that Mr. Barnes acted maliciously and abused his
    position of public authority.

[21]

While Mr. Barnes conduct was not justified, the appellants will
    pay for his improper actions through the generous award of compensatory
    damages. As Binnie J. also said in
Whiten
at para. 123, Compensatory
    damages also punish. In many cases they will be all the punishment required.
    In our view, that is the case here. We therefore set aside the trial judges
    punitive damages award.

Disposition

[22]

As
    a result, we allow the appeal in part and set aside the award of punitive
    damages.

[23]

The
    appeal is otherwise dismissed.

[24]

In
    our view, success on this appeal was mixed. We make no order as to costs.

L.B. Roberts
    J.A.

B. Zarnett J.A.

M. Jamal J.A.





[1]
The appellants abandoned at the hearing of the appeal two new issues that the
    action should have been dismissed under s. 137.1 (Anti-Slapp provisions) of the
Courts of Justice Act

and in
    accordance with the principles articulated by the English Court of Appeal in
Jameel (Yousef) v. Dow Jones & Co. Inc.
,
    [2005] Q.B. 946 where the extent of the publication is small and the costs out
    of proportion to any harm.


