The Supreme Court of Canada has rendered its judgment in Bou Malhab v. Diffusion Métromédia CMR inc. It dismissed the appeal from a judgment of the Québec Court of Appeal which overturned a trial award of $220,000. In its judgment, the Supreme Court held that individualized personal injury is necessary for compensation to be awarded and clarified the criteria to make this determination when a group of people are defamed. This judgment is expected to make defamation class actions less attractive.
In November 1998, a Montréal radio host "known for his provocative remarks" made disparaging comments about taxi drivers of Haitian and Arab origin during his morning show. Farès Bou Malhab, at that time a Montréal taxi driver whose first language is Arabic, filed a class action against the host and the radio station's owner on behalf of "[e]very person who had a taxi driver's licence in the region of the Island of Montréal on November 17, 1998 . . . and whose mother tongue is Arabic or Creole." This group included about 1,100 taxi drivers.
The trial court initially refused to authorize the class action. It found that the large size of the group would make proof of causation arising from the comments and the determination of any damages impossible. The Court of Appeal unanimously overturned that judgment and authorized the class action. It held that whether the size of the group reduced or eliminated individual damages, it was to be determined on the merits. The Court added that the difficulty of assessing moral damages in a class action should not preclude authorization.
On its merits, the trial judge found that the host's comments were defamatory. He ordered the defendants to pay $220,000 in moral damages – $200 for each plaintiff – to a non-profit organization of taxi drivers. A majority judgment of the Court of Appeal overturned the award. It held that although the comments were defamatory, damages should only be found if a reasonable person would have believed the comments and if this had caused individual injury, which was not the case.
The Supreme Court granted leave to appeal in 2009. The Court, with Justice Deschamps writing for a 6-1 majority, first focussed on the test to prove damage to reputation. The Court held that, except where direct evidence is available, "damage to reputation is assessed objectively, from the perspective of an ordinary person." It is therefore immaterial how members of the allegedly defamed group felt. The Court highlighted the importance of freedom of expression and noted that even exaggerated statements do not necessarily cause damages.
The Court hedged its comments and noted that in some cases the ordinary person test will be favourable to plaintiffs, which may be able to prove damages for which there is little or no tangible evidence. As well, there is no requirement that group members directly hear the comments. While this clearly applies to moral damages claimed by a large group of people, other applications are possible, such as losses of business for which no other cause is readily ascertainable.
While this appeal originated within the Province of Québec, the Court emphasized that Canadian law on this issue is essentially uniform, given the "striking similarity between the civil law and the common law approaches."
The Court then applied the ordinary person test where defamatory comments are made regarding a group. It held that there can be no such thing as group injury. To obtain compensation, group members must establish that they sustained personal injury, which can be unique or identical to those sustained by other group members.
Mr. Bou Malhab had argued that an award could be obtained in a class action without proof of individual damages as this assessment was better left to individual recovery proceedings which typically follow. The Court unambiguously rejected this argument, stating that injury must be proven – either directly or by inference – for each member of the group.
The Court created a list of factors which must be considered when determining the extent of personal injury derived from comments made regarding a group: size and nature of the group; plaintiff's relationship with the group; target of the defamation; seriousness of the allegations; plausibility or likelihood of acceptance of the comments; and catch-all "extrinsic factors." The explanations given for each factor are likely to become a roadmap for all Canadian courts dealing with group defamation cases.
The larger and less cohesive the group, the less likely is a finding of personal injury. Interestingly, the Court noted that members of a group which has been historically stigmatized or is otherwise readily identifiable are more susceptible to personal injury.
Similarly, where a plaintiff is particularly prominent within a group, for example because of a large market share or a pre-existing public profile, individual damages are more likely. The effect of considering this element is uncertain in a class action context. In some cases, defendants may argue that a particularly notorious plaintiff should have filed an individual action because other group members suffered no injury.
More serious and plausible defamatory comments increase the likelihood of personal injury. That said, the Court recognized that extravagant allegations or broad generalizations are generally recognized as such and that beyond a certain threshold, the ordinary person will not find them credible.
The Court did not specifically address whether this analysis ought to be used in common law jurisdictions, but this is probably the case given that it relied equally on civil law and common law authorities to create the list.
While a group may have suffered a diffuse prejudice, no class action will succeed without individual injury proven directly or inferred objectively. The words of the Court should be kept in mind: "Indignation is not a substitute for the requirements of civil proof or, more generally, the law of civil liability."
Karim's practice focuses on class actions, franchise and distribution litigation, shareholder disputes, bankruptcy and insolvency, competition law, constitutional law, privacy law, employment law and securities law litigation.
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