



COURT OF APPEAL FOR ONTARIO

CITATION: Rutman v. Rabinowitz, 2018 ONCA 80

DATE: 20180131

DOCKET: C63148

Cronk, Huscroft and Nordheimer JJ.A.

BETWEEN

Ronald Rutman

Plaintiff (Respondent)

and

Saul
    Rabinowitz, Moishe Bergman, Artcraft Company Inc.,

John Doe 4 and John Doe 5

Defendants (Appellants)

Helen A. Daley and Michael Finley, for the appellants Moishe
    Bergman and Artcraft Company Inc.,

John J. Adair, for the appellant Saul Rabinowitz

Matthew P. Sammon and S. Jessica Roher, for the
    respondent

Heard: November 16, 2017

On appeal from the judgment of Justice Michael A. Penny
    of the Superior Court of Justice (Commercial List), dated November 30, 2016, with
    reasons reported at 2016 ONSC 5864.

By the Court:

INTRODUCTION

[1]

This is a case of serious, sustained, and
    baseless Internet defamation.

[2]

The respondent, Ronald Rutman, a Toronto
    chartered accountant and businessman, was subjected to an orchestrated Internet
    defamation campaign specifically designed to harm his personal and professional
    reputations. The campaign involved postings on the Internet of numerous
    defamatory allegations, including that he had engaged in tax fraud and was a
    thief and a cheat. The allegations were entirely without substance.

[3]

The defamatory statements were made by the
    appellant, Saul Rabinowitz, who admitted liability at trial.  The trial judge found
    the appellants, Moishe Bergman and Artcraft Company Inc., jointly and severally
    liable for the defamation. He awarded: $200,000 general damages as against all
    three defendants; $200,000 aggravated damages and $250,000 punitive damages as against
    Rabinowitz; and $50,000 punitive damages as against Bergman.

[4]

Rabinowitz appeals the trial judges damages
    awards.  He argues that a total award of $400,000 compensatory damages
    ($200,000 general damages, plus $200,000 aggravated damages), is inordinately
    high.  According to Rabinowitz, awards of $50,000 for general damages and
    $50,000 for aggravated damages are at the upper end of the range for
    compensatory damages in cases like this one, where the plaintiffs reputation
    allegedly was unharmed by the defamatory conduct in question.

[5]

Rabinowitz offers only a qualified
    acknowledgement that punitive damages are appropriate in this case.  He submits
    that an award of punitive damages is justified if, and only if, the overall compensatory
    damages awarded by the trial judge are substantially reduced.  In this event,
    Rabinowitz says, a rational award of punitive damages would be in the range of
    $25,000 to $50,000.

[6]

Bergman and Artcraft appeal from the joint and
    several liability holding against them.  In the alternative, they seek to
    reduce the quantum of the general damages award to $25,000.  Bergman also seeks
    to vacate the punitive damages awarded against him.

[7]

For the reasons that follow, the appeal is
    dismissed.

BACKGROUND IN
    BRIEF

[8]

Rutman is a partner at the accounting firm
    Zeifmans LLP, where he has worked for over 40 years.  He is also a board member
    and Chair of the Independent Trustees of H&R Real Estate Investment Trust (H&R
    REIT), a publicly traded real estate trust that manages over $13 billion in
    assets and investments, and he serves on the boards of directors of several
    charitable organizations.  It is undisputed that he enjoys an excellent
    reputation in Toronto, has been successful in business, and plays an active
    leadership role in his cultural and religious communities.

[9]

Rabinowitz and Bergman were Rutmans long-time business associates.
    Rabinowitz managed Artcraft Limited,
[1]
a company owned by Rutman.  Bergman was responsible for sales.  The three men
    were also all members of Torontos Orthodox Jewish community and shared many
    common friends and acquaintances.

[10]

In June 2007, Rabinowitz and Bergman commenced
    proceedings against Rutman and Artcrafts predecessor companies over control of
    the business. A settlement was reached in August 2007, under which Bergman and Rabinowitz
    agreed to purchase most of the Artcraft assets from Rutman, and all parties provided
    mutual full and final releases of all claims as against each other, save only
    in respect of the settlement and the transactions contemplated under it.

[11]

Rabinowitz and Bergman were not satisfied with some
    terms of the settlement. In August 2008, notwithstanding the prior delivery of
    the releases, they sought to enjoin Rutman from exercising certain rights under
    the settlement agreement.  They also sought to issue a fresh statement of claim
    containing serious allegations of professional impropriety against Rutman in
    respect of the Artcraft business, including tax fraud. The court refused
    Rabinowitzs and Bergmans injunction request. Further discussions ensued and
    the settlement agreement was amended. The proposed fresh statement of claim was
    never issued.

[12]

The Internet defamation campaign against Rutman
    began on August 18, 2008 with the creation of an email account by Rabinowitz
    (handrmember@ gmail.com), using an Artcraft computer.  Rabinowitz used this
    account to send anonymous emails to Rutmans business partners at Zeifmans
    concerning suspicious activities/transactions done by your firm.  He also
    used it to send an email to the managing director and trustees of H&R REIT,
    suggesting that Rutman be investigated for money laundering and tax evasion
    fraud.

[13]

Rabinowitz also used an Internet bulletin board
    website known as GigPark to post numerous negative reviews about Rutman, each
    purporting to be authored by a different person.  These postings described Rutman
    as a thief and a bastard and someone who deserves to be behind bars, among
    other defamatory things.

[14]

In late September 2008, Rabinowitz learned that
    Rutman was refusing to pay an outstanding invoice from an Artcraft supplier,
    Laptide Industries Ltd. This prompted Rabinowitz and Bergman to consider, and
    ultimately to commence, litigation to force Rutman to pay. It was also the
    trigger for further defamatory postings on the GigPark site.

[15]

Rabinowitz attempted to spread the defamatory
    comments widely.  At trial, he acknowledged the postings were made with malice
    and that he used the names of Rutmans business partners and his son in the
    postings in an attempt to maximize Rutmans pain and suffering.

[16]

In December 2008, the appellants retained
    counsel to prosecute the Laptide litigation. Over time, Rabinowitz escalated the
    Internet defamation campaign by impersonating Rutman using fake email addresses
    and by sending defamatory emails about Rutman from anonymous addresses to his
    friends, family, business associates, and members of Torontos Orthodox Jewish
    community.  Further defamatory emails about Rutman were sent to H&R REIT and
    to the media using anonymous email addresses and additional postings were made
    about Rutman on the GigPark site.  Rabinowitz continued to allege serious
    wrongdoing, including criminal behaviour by Rutman.  The GigPark postings, for
    instance, described Rutman as a tax cheater, corrupt, a cheater who should
    be reported, a crook, a swindler, a thief and a master of tax fraud,
    among other derogatory things.

[17]

In April 2009, Rabinowitz swore an affidavit in
    the Laptide litigation denying his involvement in these matters, but eventually
    admitted that he committed perjury in doing so. He attempted to frustrate
    Rutmans investigation into the anonymous emails by installing software on his
    computer in an attempt to hide his IP address, with the intent of making
    additional defamatory statements about Rutman on the Internet. He later enlisted
    the assistance of
an Artcraft employee in charge of technology
for this purpose, and installed further software designed to delete
    and destroy electronic data.

[18]

Rabinowitzs defamatory activities persisted
    over a lengthy period.  They were unrelenting, insidious and reprehensible.

TRIAL JUDGES DECISION

[19]

In April 2009, Rutman sued Rabinowitz, Bergman
    and Artcraft for damages in defamation, among other matters.  Rabinowitz admitted
    liability for the defamatory statements.  Bergman denied that he participated
    with Rabinowitz in the publishing of those statements and Artcraft denied any
    responsibility for Rabinowitzs actions.

[20]

At trial, Bergmans evidence was that he never
    agreed to the campaign; was not aware of it until April 19, 2009, when he sent
    an email message believing it was going to Rutman when in fact it was in
    response to another fraudulent email sent by Rabinowitz, stating Wishing you
    much luck!; and that he never condoned, encouraged, or sought to benefit from
    the campaign.

[21]

All the defendants pleaded justification as a
    defence to Rutmans claim.  They did not abandon this defence until mid-trial, when
    it became apparent that it could not succeed.

[22]

The trial judge found that the words complained
    of were defamatory, were about Rutman, and were published to a third party.  He
    rejected Bergmans evidence on all key points, holding, in effect, that Bergman
    had knowingly encouraged and assisted Rabinowitz in his defamatory attacks
    against Rutman.

[23]

Specifically, Bergman admitted at trial that he was
    not on speaking terms with Rutman, had no reason to be wishing him luck, and
    that he had changed his story about the incriminating much luck email
    mid-trial after discussions with Rabinowitz in preparation for trial. The trial
    judge found that Bergman had utterly failed in his disclosure obligations and
    routinely deleted emails notwithstanding his knowledge of the terms of an
Anton
    Piller
order requiring him to preserve evidence.  In addition, contrary to a
    court order, he failed to produce his Blackberry device until two years
    following the date of the
Anton Piller
order, and admitted that he gave
    false evidence in answer to discovery undertakings about the email address he
    was using.

[24]

The trial judge also held, contrary to Bergmans
    contention, that there was no evidence that Bergman disapproved of Rabinowitzs
    Internet defamation campaign and had told him to stop.  Indeed, there was evidence
    that Bergman had corresponded with Rabinowitz using the fake Rutman email
    address Rabinowitz had created  evidence that was revealed only as a result of
    a forensic inspection of Rabinowitzs computer. The tone and context of these
    communications were inconsistent with Bergmans claim that he was opposed to
    Rabinowitzs conduct and wanted him to stop.

[25]

The trial judge further found that, at least by mid-April
    2009, Bergman knew Rabinowitz had been using fraudulent Internet postings to
    defame Rutman, had been sending fraudulent defamatory emails to H&R REIT,
    and that Rabinowitz was engaged in a campaign to cause pain and injury to
    Rutman.  For example, Bergmans and Rabinowitzs lawyer at the time (not
    counsel on appeal) had threatened to contact the Canada Revenue Agency (the CRA)
    with allegations of tax fraud against Rutman if Rutman refused to settle the
    Laptide litigation on their terms.  The lawyer further suggested the email
    campaign against Rutman would stop if he accepted the settlement proposal.  In
    doing so, the lawyer had acted at all times on instructions from Rabinowitz and
    Bergman, and had kept both men apprised of all developments.

[26]

The trial judge also made clear findings in
    support of his holding that Artcraft was vicariously liable for the Internet
    defamation campaign mounted against Rutman.  He found that Rabinowitz and Bergman,
    as the controlling shareholders, directors, and directing minds of Artcraft,
    had authorized the use of company equipment and employees to effect the defamatory
    campaign against Rutman.

[27]

Specifically, the trial judge found that Artcraft
    computers and email servers were used in the Internet defamation campaign and
    that an Artcraft employee, at Rabinowitzs request, provided assistance in
    perpetrating the campaign and in attempting to avoid detection.  In addition, as
    mentioned above, Rabinowitz and Bergman authorized their lawyer to use the
    defamation campaign as a bargaining chip in settlement negotiations concerning
    the Laptide dispute, litigation in which Artcraft Limited was a named party.

[28]

Finally, as described above, the trial judge
    awarded $200,000 general damages against Rabinowitz, Bergman and Artcraft,
    jointly and severally; $200,000 aggravated damages and $250,000 punitive
    damages against Rabinowitz; and $50,000 punitive damages against Bergman.

ISSUES

[29]

The appellants raise four issues on appeal:

A.

Liability
: Bergman and Artcraft

1)

Did the trial judge err by misconstruing the test for concerted action
    liability?

2)

Did
    the trial judge err by inferring Bergmans knowledge of the Internet defamation
    campaign?

3)     Did the
    trial judge err by misconstruing the test for the vicarious liability of
    Artcraft?

B.
Damages
: All Appellants

4)    Did the
    trial judge err in assessing damages?

DISCUSSION

A.
Liability
: Bergman and Artcraft

1)       Did the trial judge err by misconstruing the
    test for concerted action liability?

[30]

Bergman argues that joint liability in
    defamation requires either approval or publication of the defamatory statements
    at issue, neither of which occurred in this case:
Hill v. Church of
    Scientology of Toronto
, [1995] 2 S.C.R. 1130, at para.
    179;
Lawson v. Burs, Succamore and Jim Pattison Broadcasting Ltd
.
,
[1976] 6 W.W.R. 362, at para. 17;
Kent
    v. Postmedia Network Inc.
,
2015 ABQB 461, 77 C.P.C. (7th)
    419, at para. 77.

[31]

More particularly, Bergman submits there was no
    evidence at trial that he wrote or repeated the defamatory statements at issue
    and, consequently, he could not be held jointly and severally liable on the
    basis of the concerted action doctrine. At its highest, Bergman contends, he
    knew of Rabinowitzs plan and did nothing to stop it.  However, he says, he was
    under no duty to do so; passivity does not render him a joint tortfeaser. Rather,
    active assistance in the commission of a tort is required:
Sea
    Shepherd UK v. Fish & Fish Limited
,

[2015]
    UKSC 10, at paras. 55 and 57-60,
per
Lord Neuberger.

[32]

We reject this ground of appeal.

[33]

Concerted action may occur in a variety of ways. 
    Generally, it involves a common design or conspiracy. In
Botiuk v. Toronto
    Free Press Publications Ltd.
, [1995] 3 S.C.R. 3, the Supreme Court of
    Canada adopted the following formulation of the law regarding concerted action liability
    as set out by John G. Fleming in
The Law of Torts
, 8th ed. (Sydney: Law Book Co., 1992), at p. 255:

The critical element of [concerted action
    liability] is that those participating in the commission of the tort must have
    acted in furtherance of a common design.  Broadly speaking, this means a
    conspiracy with all participants acting in furtherance of the wrong, though it
    is probably not necessary that they should realize they are committing a tort.

[34]

The difficulty, of course, is determining the
    degree of involvement or connection necessary to meet the requirements of
    concerted action liability.  Canadian authorities suggest that concerted action
    liability arises when a tort is committed in furtherance of a common design or
    plan, by one party on behalf of or in concert with another party: see Lewis N. Klar
    & Cameron S.G. Jefferies,
Tort Law
, 6th ed. (Toronto:
    Thomson Reuters, 2017),
at p. 657; G.H.L. Fridman,
The
    Law of Torts in Canada
, 3rd ed. (Toronto: Carswell, 2010), at p. 856.  In
The
    Law of Torts
, 10th ed. (Sydney: Thomson Reuters, 2011), at p. 302,
Fleming puts it this way: [k]nowingly assisting, encouraging or
    merely being present as a conspirator at the commission of the wrong would suffice,
    so too would any form of inducement, incitement or persuasion which procures
    the commission of the wrong.  And, W. Page Keeton, in
Prosser and Keeton on
    the Law of Torts,
5th ed. (Minnesota: West Publishing Co., 1984), at p.
    323, states:

All those who, in pursuance of a common plan
    or design to commit a tortious act, actively take part in it, or further it by
    cooperation or request, or who lend aid or encouragement to the wrongdoer, or
    ratify and adopt the wrongdoers acts done for their benefit, are equally
    liable.

[35]

The key point is that concerted action liability
    is a fact-sensitive concept. Lord Neuberger emphasized as much in
Sea
    Shepherd
, at para. 56, reiterating Bankes LJs admonition from
The Koursk
,
[1924] P 140, at p. 151 that [i]t would be unwise to attempt
    to define the necessary amount of connection, and that each case must depend
    on its own circumstances.  We agree.

[36]

In our view, on the facts here, the trial judge
    was correct to hold that the test for concerted action liability was made out
    in respect of Bergman.  That Bergman did not publically approve or repeat the
    defamatory statements at issue does not absolve him from liability for
    Rabinowitzs tortious conduct. Bergman was not merely a passive or silent observer
    of the Internet defamation campaign. There was ample evidence at trial to
    support the trial judges conclusion that there was a common design between
    Bergman and Rabinowitz to cause harm to Rutman, not only by the campaign of
    defamatory statements but also by threats of litigation and reports to the CRA
    levied against Rutman in order to exhort him to settle the parties Laptide
    dispute on terms favourable to Bergman and Rabinowitz.

[37]

It was not necessary for the trial judge to find
    that Bergman was an active participant in the Internet defamation campaign from
    the outset in order to attract joint and several liability. The trial judge
    found that Bergman was aware of the campaign at least by the end of April 2009
    and was willing to use it to his potential advantage.  Bergman did not simply
    agree with or acquiesce in Rabinowitzs campaign.  To the contrary, on the
    trial judges factual findings, he was involved in authorizing the use of Artcraft
    equipment and personnel to facilitate the defamation campaign; he jointly
    authorized his lawyer to use the defamation campaign and threats of an adverse
    report concerning Rutman to the CRA in an effort to extort an advantageous
    settlement of the Laptide litigation; and, contrary to court order, he deleted
    and destroyed emails and other data relevant to his involvement in the Internet
    defamation campaign.

[38]

It was therefore open to the trial judge to hold
    that the foundation for a finding of concerted action liability had been
    established, thus rendering Bergman jointly and severally liable for defamation. 
    We see no reversible error in this holding.

2)       Did
    the trial judge err by in inferring Bergmans knowledge of the Internet
    defamation campaign?

[39]

In his factum, Bergman argues that, even
    assuming he knew of Rabinowitzs defamatory activities, it could not be
    inferred that he knew of them prior to April 19, 2009.  He submits that the
    trial judge impermissibly used his rejection of Bergmans evidence as proof of
    the affirmative proposition that Bergman knew of Rabinowitzs wrongdoing from
    the outset.

[40]

Bergman did not press this ground of appeal at
    the appeal hearing.  This was a prudent decision.  In our view, on this record,
    this ground has no merit.

[41]

The trial judges appreciation of the evidence
    and his fact finding are entitled to deference from this court.  His factual
    findings can be disturbed by a reviewing court only if they are tainted by
    palpable and overriding error.  No such error has been established here.  In
    particular, it was open to the trial judge on the evidentiary record to
    conclude there were sound reasons for disbelieving Bergman's claim that he
    never agreed to Rabinowitz's Internet defamation campaign, and was unaware of
    it until April 19, 2009.  This finding was supported, for instance, by the
    evidence of their lawyers knowledge of the campaign, as well as the email
    exchanges between Bergman and Rabinowitz using the fraudulent account that
    Rabinowitz had established in Rutmans name  the disclosure of which Bergman had
    sought to keep from the court.

[42]

This ground of appeal fails.

3)       Did
    the trial judge err by misconstruing the test for the vicarious liability of
    Artcraft?

[43]

Bergman and Artcraft submit that, while the
    trial judge stated the correct test for vicarious liability, he erred in
    applying it.  Specifically, he failed to consider if, at the material times, Rabinowitz
    was acting as Artcraft, as opposed to acting on his own behalf.  Bergman and
    Artcraft argue that Rabinowitzs campaign directed at amending the settlement
    agreement among the parties was harmful to Artcraft, rather than helpful, in
    that Rabinowitz sought to have funds returned to him and Bergman, the recovery
    of which would have imposed liabilities on Artcraft.  There was, therefore, no
    rationale for attributing Rabinowitzs personal misconduct to Artcraft.  Moreover,
    they contend, there was no evidence that Rabinowitzs defamatory activities were
    part of his employment.

[44]

We do not accept these submissions.

[45]

The trial judge considered and rejected the same
    arguments Bergman and Artcraft now raise on appeal regarding Artcrafts
    vicarious liability.  Recall that the trial judge found that Rabinowitz and
    Bergman were the controlling shareholders, directors, and directing minds of
    Artcraft, and that they authorized the use of company equipment and employees
    to perpetrate the Internet defamation campaign and to try to conceal their
    involvement in it.

[46]

On this evidentiary record, these critical
    findings are unassailable.  They establish that Artcraft became associated with
    the defamatory statements at issue, that it was an authorized vehicle for the
    misdeeds of Rabinowitz and Bergman and, consequently, that it was vicariously
    liable on this basis:
Botiuk
, at paras. 89-90.
    There is no requirement that actions inure to the benefit of a corporation in
    order for the corporation to be held vicariously liable.

[47]

Accordingly, this ground of appeal also fails.

B.
Damages
: All Appellants

4)       Did
    the trial judge err in assessing damages?

[48]

Rabinowitz argues that the trial judges total
    damages award of $650,000 as against him is irrational and incoherent.  It is
    irrational, he submits, because it ignores or discounts the evidence at trial,
    including Rutmans alleged admission that he suffered no reputational harm from
    Rabinowitzs wrongful conduct.  And it is incoherent, he says, because it is
    inconsistent with awards in similar cases.

[49]

These factors, Rabinowitz argues, support only a
    modest award of $100,000 in compensatory damages in this case ($50,000 general
    damages, plus $50,000 aggravated damages).  Further, Rabinowitz says, if, and
    only if, the compensatory damages awarded at trial are substantially reduced,
    is an award of punitive damages justified, in the amount of $25,000 to $50,000.

[50]

Bergman, for his part, attacks the trial judges
    damages awards as against him on three grounds.

[51]

First, general damages.  Bergman argues the
    trial judge was obliged to focus his damages analysis on the wrong Rutman
    complained of and the injuries he sustained.  He submits that, as framed in his
    pleading, the defamatory sting or wrong of which Rutman complained was
    limited to the illusion created by the Internet defamation campaign that
    multiple people held negative views about him, which harmed his reputation. 
    Consequently, to the extent the trial judge awarded general damages for
    injuries arising from the contents of the GigPark postings, he erred.

[52]

Next, like Rabinowitz, Bergman stresses that
    Rutman sustained no pecuniary losses or reputational injury as a result of the
    Internet defamation campaign.  Rutman, Bergman says, was the epitome of a
    thick-skulled plaintiff and his reputation survived unscathed.

[53]

As a result of these factors, Bergman maintains,
    only modest general damages are warranted, in the amount of $25,000.

[54]

Finally, Bergman submits that, as his
    involvement in the defamation campaign was minimal, no award of punitive
    damages against him is sustainable.

(i)

Standard of review

[55]

In the leading case of
Hill
, t
he Supreme Court of Canada addressed the standard of appellate
    review applicable to a jurys award of general damages in a defamation case. 
    Citing the decision of this court in
Walker v. CFTO Ltd.
(1987), 59 O.R. (2d) 104, at p. 110, the Supreme Court cautioned, at
    para. 161, the assessment of damages is peculiarly the province of the jury
    and an appellate court is not entitled to substitute its own judgment as to
    the proper award for that of the jury merely because it would have arrived at a
    different figure.  Instead, at para. 162,
Hill
instructs that, as outlined in
Walke
r, the reviewing court should consider whether:

[T]he [jury] verdict is so inordinately large
    as obviously to exceed the maximum limit of a reasonable range within which the
    jury may properly operate or, put another way, whether the verdict is so
    exorbitant or so grossly out of proportion to the libel as to shock the courts
    conscience and sense of justice.

See also
Whiten v. Pilot
    Insurance Co.
,
2002 SCC 18, [2002] 1 S.C.R. 595, at para.
    108.

[56]

A different and less deferential standard
    applies to appellate review of a jury award of punitive damages.  Appellate
    review in these circumstances is based upon the courts estimation as to whether
    the impugned award serves a rational purpose.  As the Supreme Court explained
    in
Hill
, at para. 200:

Unlike compensatory damages, punitive damages
    are not at large.  Consequently, courts have a much greater scope and
    discretion on appeal.  The appellate review should be based upon the courts
    estimation as to whether the punitive damages serve a rational purpose.  In
    other words, was the misconduct of the defendant so outrageous that punitive
    damages were rationally required to act as deterrence?

[57]

This rationality test applies both to the
    issue whether a punitive damages award should be made and to the question of
    its quantum:
Whiten
, at para. 101.  Further, [i]n
    the case of punitive damages, the emphasis is on the appellate courts
    obligation to ensure that the award is the product of reason and rationality. 
    The focus is on whether the Courts sense of reason is offended rather than on
    whether its conscience is shocked:
Whiten
, at
    para. 108.

[58]

Accordingly, if an award of punitive damages,
    together with the compensatory damages awarded, produces a total sum that is
    so inordinately large that it exceeds what is rationally required to punish
    the defendant, it will be reduced or set aside on appeal:
Whiten
, at para. 109.

[59]

This case, however, was a judge-alone trial.  In
Barrick Gold Corp. v. Lopehandia
(2004), 71
    O.R. (3d) 416, at para. 25, this court accepted the following statement by the
    Newfoundland Court of Appeal in
Farrell v. St. Johns Publishing Co.
,
[1986] N.J. No. 19, at p. 13, as an accurate description of the
    standard of review applicable to an award of compensatory damages in a
    judge-alone defamation case:

In assessing damages in a libel action, a
    judge, sitting without a jury, has a great deal of latitude and the Court of
    Appeal will not readily interfere with his award unless it is satisfied that he
    arrived at his figure either by applying a wrong principle of law or through a
    misapprehension of the facts or that the amount awarded was so extremely high
    or so low as to make it an entirely erroneous estimate of the damages. 
    [Citations omitted.]

[60]

We will address the appellants attacks on the
    damages awarded by the trial judge in turn, with these standard of review
    principles at the forefront.

(ii)

Compensatory damages

(a)

Absence of evidence of actual harm

[61]

The appellants maintain that the trial judge
    erred in quantifying compensatory damages by failing to accord sufficient or
    any weight to Rutmans alleged concession at trial that he suffered no
    pecuniary losses or reputational injury as a result of the Internet defamation
    campaign.  As a result, they assert, only modest compensatory damages were
    appropriate.

[62]

This submission is problematic for several
    reasons.  First, it is trite law that general damages in libel cases are
    presumed from the very publication of the false statement.  The injured
    plaintiff bears no obligation to prove actual loss or injury:
Hill
,
at para. 167;
    Raymond E. Brown,
Brown on Defamation
, loose-leaf, 2d ed. (Toronto: Thomson
    Reuters, 2017), at 25.1.  The appellants focus on the alleged lack of
    pecuniary or
reputational damage to Rutman discounts this
    foundational principle.

[63]

Second, as the Supreme Court pointed out in
Hill,
at para. 172, special damages for pecuniary loss are rarely claimed
    in libel actions and are often exceedingly difficult to prove.  Thus, the
    whole basis for recovery for loss of reputation usually lies in the general
    damages award:
Hill
, at para. 172.  This case
    is no exception in this regard.

[64]

Third, we do not accept the suggestion that
    Rutman conceded at trial that he sustained no reputational damage as a result
    of the defamatory statements at issue.  The record, in our view, confirms
    merely that he acknowledged that he was unaware of any specific injury to his
    reputation.

[65]

The inability to point to specific reputational
    harm is not an admission that such harm did not occur.  To the contrary, the
    courts have accepted that, [t]he consequences which flow from the publication
    of an injurious false statement are invidious and that, [a] defamatory
    statement can seep into the crevasses of the subconscious and lurk there ever
    ready to spring forth and spread its cancerous evil.  The unfortunate
    impression left by a libel may last a lifetime:
Hill
, at paras. 168-169.

[66]

The injurious effects of defamatory statements
    regarding a professional are particularly acute.
Hill
, which involved libelous statements about a young lawyer who went on
    to achieve great professional success, is a case in point.  As the Supreme Court
    stressed, at paras. 180-181, a lawyers reputation is of paramount importance. Clients,
    colleagues and the courts depend on the lawyers integrity, and [a]nything
    that leads to the tarnishing of a professional reputation can be disastrous for
    a lawyer. The defamed lawyer has no way of knowing what members of the public,
    colleagues and others may have been affected by the defendants defamatory
    allegations or of being certain who may have  accepted the false allegations of
    wrongdoing levied against him.

[67]

These comments are apposite here.  The
    importance of a reputation for integrity and trustworthiness is not confined to
    lawyers.  It applies equally to other professions and callings, including
    chartered accountants and tax advisors like Rutman:
Botiuk
,
at paras. 91-92.

[68]

This leads to an additional, key consideration. 
    This is an Internet defamation case.  As this court held in
Barrick
, at para. 28, the pernicious effect of defamation on the Internet,
    or cyber libel, distinguishes it, for the purposes of damages, from
    defamation in another medium.  Consequently, while the traditional factors to
    be considered in determining general damages for defamation remain relevant
    (for instance, the plaintiffs conduct, position and standing, the nature and
    seriousness of the defamatory statements, the mode and extent of publication,
    the absence or refusal of any apology or retraction, the whole conduct and
    motive of the defendant from publication through judgment, and any evidence of
    aggravating or mitigating circumstances:
Hill
,
    at para. 185), they must be examined in light of the Internet context of the
    offending conduct.  Justice Blair explained in
Barrick
, at para. 31:

[O]f the criteria mentioned above, the mode
    and extent of publication is particularly relevant in the Internet context, and
    must be considered carefully.  Communication via the Internet is instantaneous,
    seamless, inter-active, blunt, borderless and far-reaching.  It is also
    impersonal and the anonymous nature of such communications may itself create a
    greater risk that the defamatory remarks are believed.  [Citation omitted.]

[69]

He continued, at para. 34:

It is true that in the modern era defamatory
    material may be communicated broadly and rapidly via other media as well. The
    international distribution of newspapers, syndicated wire services, facsimile
    transmissions, radio and satellite television broadcasting are but some examples.
    Nevertheless, Internet defamation is distinguished from its less pervasive
    cousins, in terms of its potential to damage the reputation of individuals and
    corporations, by the features described above, especially its interactive
    nature, its potential for being taken at face value, and its absolute and
    immediate worldwide ubiquity and accessibility.  The mode and extent of
    publication is therefore a particularly significant consideration in assessing
    damages in Internet defamation cases.

[70]

In this case, the trial judges reasons, at
    para. 221, indicate he recognized, correctly, the purposes of compensatory
    damages in libel cases, as well as the traditional considerations relevant to
    assessing the quantum of such damages, listed above.  They also confirm, at paras.
    236-238, he appreciated the requirement that the analysis of the damages
    occasioned by the extensive Internet defamation campaign be evaluated in the
    context of the unique and somewhat insidious nature of [I]nternet defamation
    and in light of the fact that the defamatory statements at issue were
    instantly available to an unknown number of recipients.

[71]

Further, in approaching his compensatory damages
    analysis, the trial judge observed, at para. 216:

Sometimes, for example, there may be
    relatively little demonstrable damage to reputation, but serious emotional
    distress; on other occasions, the need for public vindication will predominate;
    in yet other cases the financial consequences of damage to the reputation of
    the individual may represent the most serious feature.  [Citation omitted.]

This, too, was correct.

[72]

In applying these principles in this case, the
    trial judge made the following critical findings, at paras. 231-241:

(1)

notwithstanding Rutmans excellent reputation in
    the Toronto community and his professional success, he suffered real distress,
    hurt, humiliation and deep embarrassment as a result of the GigPark defamatory
    postings.  He was unable to sleep and work regularly, changed his religious
    observational habits to avoid encounters with people in his Toronto Orthodox
    Jewish community, and suffered fear of the unknown and the possibility that
    people would take the posted allegations seriously;

(2)   the existence of the GigPark postings was broadly known in
    Rutmans community, they were a topic of conversation at his synagogue, and a
    number of his clients accessed the GigPark site;

(3)   Rutmans fears and anxiety occasioned by the GigPark postings
    were exacerbated by the fact that he did not know how many people actually saw
    the postings;

(4)   Rabinowitzs admitted purpose in carrying out the Internet
    defamation campaign was to cause the precise pain and suffering experienced by
    Rutman;

(5)   the full extent of the dissemination of the defamatory
    statements was unknown because the GigPark postings also affected Rutmans
    online Google profile.  Any search of that profile in 2009 would have likely
    revealed one of the defamatory posts on GigPark;

(6)   the fraudulent emails directing people to the GigPark postings
    were sent to at least 240 people.  The relevant page on the GigPark site itself
    showed more than 5,000 viewings; and

(7)   the vindication of Rutmans good name was the most important
    factor in this case precisely because it is not known, given the means used to
    carry out the defamation campaign, what the true effect of that campaign was or
    could have been.

[73]

These facts, in the trial judges view,
    militated towards a significant general damages award.  We agree.

[74]

In addition, the nature and reach of the
    defamatory conduct supported such an award.  As the trial judge put it, at
    para. 243:

The defamation of Rutman was serious, ongoing,
    malicious and targeted directly at the communities where his reputation is most
    important.  The allegations in the GigPark posts went to the core of Rutmans
    reputation for honesty and integrity.

[75]

The
    trial judge concluded, at para. 247:

Having regard to the objectives of
    compensating Rutman for the damage to his reputation, vindicating his good
    name, and taking account of the distress, hurt and humiliation which the
    defamatory publication[s] caused, I grant an award of general compensatory
    damages in the amount of $200,000.

[76]

We see no error in the trial judges approach to
    or quantification of general damages.  He considered the controlling principles
    for the awarding of general compensatory damages in an Internet defamation
    case, and applied them to the facts as he found them.  His factual findings in
    this regard are not challenged on appeal.  The quantum of general damages that
    he awarded to achieve the purposes of such an award was well within his
    discretion and was amply supported by the evidentiary record.

[77]

Similarly, we see no basis to fault the trial
    judge for his award or quantification of aggravated damages.  We note that
    Rabinowitz has been unable to point to any specific error in the trial judges
    assessment of aggravated damages, contending merely that the total compensatory
    award of $400,000 was excessive.  We disagree.

[78]

The trial judge, for clear and detailed reasons,
    at paras. 252-260, found that the insidious nature of Rabinowitzs conduct
    compounded Rutmans suffering and angst; that Rabinowitz acted maliciously,
    motivated by anger and personal business self-interest; that his motives and
    conduct, including his malevolence and spite and the manner of committing
    the wrong, aggravated the injury done to Rutman, including to his dignity and
    pride; and that Rabinowitz admittedly acted to cause additional harm to Rutman. 
    On these findings, which also are not challenged on appeal, a significant aggravated
    damages award was clearly justified.

[79]

And, there is more.  Rabinowitz admitted that he
    was motivated by actual malice in conceiving and carrying out the Internet
    defamation campaign against Rutman.  He sought to obtain wide dissemination of
    his defamatory statements in circumstances and in a manner that were calculated
    by him to maximize Rutmans pain and embarrassment and he persisted in his
    defamatory activities for a lengthy period of time.  There is no suggestion
    that he withdrew his defamatory statements, or tendered any apology.  Moreover,
    for more than seven years, he advanced a plea of justification, which he only abandoned
    belatedly, mid-trial, in recognition that it was bound to fail.

[80]

In combination, in our view, all these
    considerations amply grounded the aggravated damages award made against
    Rabinowitz.

(b)

Compensatory
    awards in other libel cases

[81]

Rabinowitz next argues that the total compensatory
    damages award in this case is incoherent because it is inconsistent with the
    quantum of compensatory damages awarded in allegedly similar cases.  We reject
    this argument for two reasons.

[82]

First, as the courts have repeatedly emphasized,
    libel cases are particularly fact-sensitive and, in that sense, each is unique. 
    In fashioning his damages awards, the trial judge appreciated that, for this
    reason, a comparison with awards in other libel cases was of little assistance.

[83]

This conclusion accords with the jurisprudence
    in libel cases.  In
Hill
, at para. 190, the Supreme
    Court held:

The assessment of damages in a libel case
    flows from a particular confluence of the following elements: the nature and
    circumstances of the publication of the libel, the nature and position of the
    victim of the libel, the possible effects of the libel statement upon the life
    of the plaintiff, and the actions and motivations of the defendants.
It follows that there is little to be gained from a
    detailed comparison of libel awards
. [Emphasis
    added.]

See, to the same effect,
Botiuk
, at para. 105.

[84]

Second, and in any event, although Rabinowitz
    relies on several libel cases in which the amount of the compensatory damages
    awarded was lower than that awarded here, other libel cases reveal compensatory
    damages awards in amounts higher than those awarded by this trial judge.  The
    variability in the amount of compensatory damages awarded in Canadian libel
    cases does not mean that the award in this case is incoherent, as Rabinowitz
    argues.  Rather, it underscores the highly fact-sensitive and unique nature of
    each libel case.  Given all the factors at play here, including Rabinowitzs
    admitted misconduct, the nature of the defamatory statements, and their impact
    on Rutman, no other libel case is especially instructive, let alone
    controlling, on the issue of the quantification of damages.

(c)

Scope of the wrong asserted

[85]

Bergman advances a final ground of appeal
    regarding the trial judges general damages award.  In brief, he submits that,
    as pleaded, Rutmans claims against the appellants did not extend to a claim
    for damages arising from the contents of the GigPark postings but, rather, were
    restricted to only those damages arising from the false appearance that
    multiple people were posting negative comments about Rutman on the Internet.

[86]

Again, we disagree.

[87]

We do not read Rutmans pleading as excluding a
    claim for damages for defamation arising from the contents of the GigPark
    postings, although it does contain such an exclusion in respect of specified
    defamatory communications Rabinowitz sent from an anonymous gmail email account
    to Zeifmans and to H&R REIT.  Rutman did, however, plead the contents of
    the GigPark postings, as well as the manner of the postings, in support of his
    damages claims.

[88]

Based on his pleading and the issues actually
    contested at trial, the defamatory sting complained of by Rutman may fairly be
    seen as arising both from the contents of the GigPark postings and from the
    apparent authorship of the defamatory statements by numerous members of the
    public.

[89]

It must be emphasized, in this regard, that the
    appellants collective conduct of the case ensured that the defamatory contents
    of the GigPark postings figured prominently at trial.  Recall again that the
    appellants sought to prove the truth of the underlying allegations in the
    GigPark postings and they pursued a defence of justification until Rutmans
    cross-examination at trial.  In these circumstances, we do not accept that it
    is open to the appellants to now seek to circumscribe the nature of the
    misconduct said by Rutman to anchor a substantial general damages award.

(iii)

Punitive damages

[90]

This brings us, then, to the issue of the
    appropriateness of the trial judges punitive damages awards.

[91]

Rabinowitz acknowledged at trial that an award
    of punitive damages as against him was warranted.  Before this court, he argues
    that punitive damages are appropriate only if the quantum of the compensatory
    damages awarded by the trial judge is substantially reduced.  In support of
    this argument, he submits that the trial judge erred by failing to consider or
    refer to two critical principles, affirmed in
Whiten
, that: i) punitive damages are appropriate only where compensatory
    damages are insufficient to accomplish the goal of deterrence; and ii) a punitive
    damages award should be no greater than necessary to accomplish the objectives
    of punitive damages.  As a result, Rabinowitz contends, the trial judges award
    of punitive damages fails the rationality test.

[92]

In our view, this argument fails.

[93]

The trial judges reasons confirm that he
    appreciated the purposes of punitive damages, their exceptional nature, the
    need to be fair to both sides, and the basis for Rabinowitzs contention at
    trial that any award of punitive damages as against him should be limited to
    $25,000 to $50,000.

[94]

It is true that the trial judge did not refer
    expressly to
Whiten
in his reasons.  However,
    he did refer frequently to
Hill
, in which the
    Supreme Court stated, at para. 199:

It is important to emphasize that punitive
    damages should only be awarded in those circumstances where the combined award
    of general and aggravated damages would be insufficient to achieve the goal of
    punishment and deterrence.

[95]

The Supreme Court in
Hill
also affirmed
    the rationality test for the awarding of punitive damages.   For convenience,
    we again set out the Courts relevant comments, at para. 200:

[A]ppellate review should be based upon the
    courts estimation as to whether punitive damages serve a rational purpose. In
    other words, was the misconduct of the defendant so outrageous that punitive
    damages were rationally required to act as deterrence?

[96]

We see no basis on which to conclude that,
    because the trial judge failed to cite
Whiten
in support of the above-noted principles, he was unaware of or ignored them. 
    To the contrary, that he was alive to these principles is confirmed by his
    recognition, at para. 267(1), of the proportionality principle that governs the
    assessment of punitive damages, as emphasized in
Whiten
, and by his explicit statement, at para. 267(2):

[W]here compensatory
    damages are insufficient to accomplish the objects of retribution, deterrence
    of the defendant and others from similar misconduct in the future and the
    communitys collective condemnation or denunciation
of

what has occurred,
punitive damages will be given in an
    amount

that is no
    greater than necessary to accomplish

these objectives rationally
.  [Emphasis
    added.]

These comments encapsulate the very principles
    identified in
Hill
and
Whiten
upon which Rabinowitz relies
.

[97]

We
    note, as well, that the trial judge also referred to this courts decision in
Pate
    Estate v. Galway-Cavendish and Harvey (Township)
, 2013 ONCA 669, 117 O.R.
    (3d) 481, in which the
Whiten
and
Hill
principles regarding
    punitive damages are discussed extensively.

[98]

Thus, the trial judges reasons belie the contention that he
    ignored or failed to apply the governing principles concerning punitive
    damages, including those articulated in
Hill
and
Whiten
.  To
    the contrary, in our opinion, his reasons make it abundantly clear that he was
    cognizant of these principles and properly applied them to the facts of this
    case.
He specifically held, at para. 270, that an award of
    punitive damages was required to accomplish the objects of retribution,
    deterrence of the defendants and others from similar misconduct in the future
    and the communitys denunciation of this behavior.  This holding reflects the
    trial judges conclusion that the compensatory damages awarded were
    insufficient to achieve the accepted objectives of a punitive damages award.

[99]

Finally, we appreciate that Rabinowitz complains
    especially that the punitive damages awarded as against him considerably exceed
    those awarded by this court to the injured plaintiff in
Barrick
($250,000 here versus $50,000 in
Barrick
).  On this basis, Rabinowitz says, the trial judges punitive
    damages award was entirely irrational and unsustainable.

[100]

These arguments do not avail Rabinowitz.  As we have explained, no
    two libel cases are the same.  The assessment of damages in each case must
    account for a myriad of idiosyncratic factors particular to the parties, the
    misconduct in question and the conduct of the litigation.  In
Barrick
,
as in this case, punitive damages served a rational purpose and
    were required to address the defendants malicious, high handed and tenacious
    conduct.  It does not follow, however, that the quantum of the punitive damages
    held to be appropriate in
Barrick
was also
    appropriate on the facts of this case, for these parties and in light of this
    misconduct.  Nor is the award in
Barrick
among
    the highest punitive damages awards set or upheld by appellate courts (see, for
    example, $450,000 in
Pate
; $800,000 in
Hill
; and $1,000,000 in
Whiten
).

[101]

In our opinion, on the particular facts of this case, it cannot be
    said that the quantum of the punitive damages awarded as against Rabinowitz was
    irrational, given the underlying objectives of such damages.  As we see it, the
    overall damages awards were rationally related to those objectives, as
    mentioned above, namely, retribution, deterrence and denunciation.  It follows
    that the punitive damages award was proportionate and appellate intervention
    with it is precluded.

[102]

We also reject Bergmans
    contention that his misconduct was so minimal that no award of punitive damages
    as against him was warranted.

[103]

On the trial
    judges findings, Bergmans misconduct was neither trivial nor insignificant. 
    As we have already said, he was not a passive or silent bystander, nor did he
    simply acquiesce in Rabinowitzs wrongdoing.  The trial judge specifically
    rejected Bergmans attempt to downplay his involvement and found that his
    conduct attracted joint and several liability for the damage caused by the Internet
    defamation campaign.

[104]

Recall also
    that, like Rabinowitz, Bergman authorized their former lawyer to attempt to
    extort Rutman to settle the Laptide litigation on favourable terms under threat
    of defamatory reports of tax evasion by Rutman to the CRA.  And, together with
    Rabinowitz, he persisted for many years, including at trial, in advancing a
    defence of justification that was only belatedly abandoned.  Finally, neither
    individual showed any remorse for their conduct, and they both destroyed relevant
    evidence in the face of known court orders for the preservation of evidence, thereby
    necessitating lengthy and costly forensic computer examinations.

[105]

On these facts, in
    our opinion, the trial judge did not err in awarding punitive damages against
    Bergman.  The quantum of that award ($50,000) is proportionate to the nature
    and extent of his misconduct and reflects his degree of culpability.

DISPOSITION

[106]

Accordingly, for the reasons given, the appeal is dismissed.  The
    respondent is entitled to his costs of the appeal.  If the parties are unable
    to agree on the quantum of costs, the respondent shall deliver his brief costs submissions
    to the Registrar of this court within 15 days from the date of release of these
    reasons.  The appellants responding brief costs submissions shall be delivered
    to the Registrar within 15 days thereafter.

Released:

JAN 31 2018                                              E.A.
    Cronk J.A.

GH                                                            Grant
    Huscroft J.A.

I.V.B.
    Nordheimer J.A.





[1]

The appellant, Artcraft, was later incorporated to carry on
    the business previously conducted by Artcraft Limited.


