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CIVIL PROCEDURE - Disposition without trial - Frivolous, vexatious or abuse of process

Tuesday, August 24, 2021 @ 5:46 AM  

Lexis Advance® Quicklaw®
Appeal by the plaintiffs from dismissal of their defamation action. The respondent was a former employee of the appellant Vanbex Inc. Vanbex began as a marketing and consulting company for the cryptocurrency and block chain industries. The respondent was hired to build and develop the code for a proposed block chain technology. The appellants’ action was founded on an e-mail sent by the respondent to police that expressed his suspicion that the appellant Hobbs was using Vanbex for criminal purposes. Civil forfeiture proceedings and extensive media coverage resulted. Hobbs deposed to reputational damage to all three appellants, to millions in lost revenue, the loss of a potential sale of Vanbex in the millions of dollars, loss of 13 employees due to resignations and layoffs, reductions in earnings and personal stress. The respondent brought an application to dismiss the claim under s. 4 of the Protection of Public Participation Act. The chambers judge emphasized that all the alleged losses were said to arise because of the Civil Forfeiture Action and its resulting publicity. The chambers judge held that the appellants did not establish that the harm likely to have been suffered because of the respondent’s expression was serious enough that the public interest in continuing the proceeding outweighed the public interest in protecting his expression.

HELD: Appeal allowed. The judge erred in principle in finding that no causal connection existed between the harm suffered by the appellants and the respondent’s expressions. The evidence of harm proffered by the appellants was sufficient for the respondent’s application because this was a defamation action. Whether a connection in fact existed was a matter for trial. Having found that a trier of fact could conclude that the respondent was actuated by malice when he sent the police tip and later communicated with the Securities Commission and RCMP, the judge did not account for that important consideration in the weighing exercise. Her failure to do so was an error in principle. This was not a proceeding that was brought to stifle expression or to frustrate the respondent’s participation in public affairs. It was brought to vindicate the appellants’ reputations. The appellants established a legitimate purpose for bringing their action. They led evidence that allowed the drawing of an inference in respect of the existence of harm and the relevant causal link. The speech the respondent sought to protect was tarnished by the judge’s conclusion that there were reasonable grounds to conclude that his communications were actuated by malice. The appellants established that the harm likely to have been suffered because of the respondent’s expression was sufficiently serious that the public interest in permitting their defamation proceeding to continue outweighed the public interest in protecting the respondent’s expression.

Hobbs v. Warner, [2021] B.C.J. No. 1570, British Columbia Court of Appeal, R. Goepel, S.A. Griffin and P. Abrioux JJ.A., July 21, 2021. Digest No. TLD-August232021004