Canada: Online Defamation – The Curtain Lifts On Anonymous Postings

Can authors of anonymous and defamatory postings in an Internet chat room or on a bulletin board avoid legal action? If not, what is required to prove the identity of the author? And, what types of damages may be awarded by a court? 

These were some of the interesting issues in a recent Alberta case involving anonymous yet defamatory online postings. This case illustrates the unique evidentiary burden on plaintiffs in proving the identity of an e-mail sender.

The plaintiffs were Calgary oil and gas production company Vaquero Energy Ltd. (formerly known as Westminster) and its President and CEO Robert N. Waldner, who had been hired to consolidate the business. During the consolidation, the price of the stock fell significantly.

In 2002, the plaintiffs learned there were defamatory messages being posted in the chat room of Stockhouse.ca, a Web site providing financial information to subscribers. In its chat rooms or "bullboards," people post messages about stocks. Waldner and others found messages from "napo9" that included disparaging remarks about the company and Waldner’s management.

The postings dated from February to July, 2002. Later, similar messages were posted by "alec6."They accused Waldner of being insane, retarded, managing the company for his own benefit, comparing him to Osama bin Laden and others, and so on. When Waldner discovered the extent of the postings, he consulted legal counsel, who undertook investigations to identify the author. The defendant, Nick Weir, was later identified as the sender of all the messages.

Weir was no stranger to the company.Waldner had met him at an investors’ lunch in Toronto and Weir had once asked to be on the Vaquero board of directors.

Once Weir was identified, he was served with a Statement of Claim. The postings stopped that very day.

The plaintiffs in this case had to prove the identity of the sender of the e-mails. At trial in Alberta’s Court of Queen’s Bench, a Stockhouse representative gave evidence on the Internet Protocol (IP) addresses of the sender of the e-mails. Stockhouse records showed the identity of the person registered as "alec6" as Alec Hamilton. The person registered as "napo9" was shown as John Smith. The password for both was the same: "123456".There was no independent verification of either identity by Stockhouse.

All of the IP addresses were traced to Interface, a Toronto Internet service provider. Their records linked the addresses to a router for several companies, including Currah Capital. An Interface representative then testified that he specifically recalled manually installing one of the IP addresses on Weir’s laptop computer at Currah Capital.

An expert in computer forensics and the Internet explained to the court how IP addresses are like a telephone number. They identify where information came from and, if the IP address and the date and time an e-mail is sent is known, the computer that sent it can be traced. If the address comes from a router, though, more information is needed to trace the message back to one computer.

Weir testified on his own behalf at trial, claiming he did not send the e-mails. While he was a business consultant and shared office space with Currah Capital, three other people worked there and had access to his computer. They, he claimed, had stock holdings in Westminster or Vaquero and could have lost money during the consolidation process.

The court later noted that, in cross-examination, Weir was evasive as to whether he also owned stock in Westminster or Vaquero, but finally admitted he did.

And, he admitted that after this claim was commenced, he launched a class action in Ontario against Vaquero. At first, he said it was because of bad management at the company, but then conceded it was really to see if Vaquero would discontinue its claim if he stopped the class action. In fact, there was a consent dismissal of the class action. He also admitted at one time he wrote asking to sit on the Vaquero Board of Directors. 

Weir also called an expert in computer forensics, who gave evidence about "spoofing" or the theft of another person’s IP address. This, he said, can be done in at least two ways. If a thief had access to Weir’s computer, in a few seconds, he or she could determine the IP address and use it on another computer. The other way would be to install "Trojan" software that basically hijacks the computer for its own purposes. In cross-examination, the expert said IP address theft has resulted in police relying less on this method to find e-mail senders and more on other evidence.

In its decision, the court outlined three major issues in this action. As in any defamation case, the first is whether the statements in the postings are defamatory. The court held they were clearly defamatory and noted there was not much argument from the defendant on that point.

The second issue is whether the defendant sent the e-mails. Even though he denied it, the court was satisfied after hearing the evidence and arguments that he had sent them.

The plaintiffs argued they had proven, on a balance of probabilities, that it was Weir. They pointed to the fact that most of the "alec6" e-mails were directly traceable to Weir’s computer, which leads to a reasonable conclusion that other e-mails sent via the router were connected to Currah Capital.

Weir also knew about Vaquero and showed more than a passing interest in the company. Notably, the e-mails stopped on the day Weir was served with the claim.

As for Weir’s suggestion that someone spoofed his IP address, the plaintiffs successfully argued it did not make sense. Over time, there were three different IP addresses for the e-mails and someone would have needed either a Trojan on Weir’s computer or to go to his office each time to get the IP addresses after they were changed.

The court said there wasn’t any evidence a Trojan was installed and it is highly unlikely a thief would know when the IP addresses changed.

The court also noted the defendant made much of the fact that the plaintiffs had originally planned to apply to have his computer seized for evidence, but never did. However, the court said if the computer could have proven him blameless, it was up to him to offer it as proof.

The third issue was the amount of damages. Factors to be considered included:

• The plaintiff’s position and standing
• The nature and seriousness of the defamatory statements
• The mode and extent of publication
• The absence or refusal of any retraction or apology; and
• The whole conduct and motive of the defendant from publication through judgment.

The court considered each point. First, the court concluded the e-mails were sent at a critical time in the life of Vaquero and Waldner’s career. He was in the process of restructuring Vaquero and bad publicity would have been harmful.The purpose of the e-mails was to attack that process. Second, the e-mails were particularly vicious as well as insensitive to those suffering mental disabilities.

The third point, dealing with the mode and extent of publication, is particularly important.There were 48 e-mails sent over a period of four months. On the Internet, said the court, anonymous postings can be very destructive since readers cannot know the author’s motives. For example, if a defamatory article is published in a newspaper with a wellknown political bias, a reader takes that into account. When an e-mail is anonymous, a reader is not able to discount comments made and there is a greater risk that the defamatory remarks will be believed, which aggravates the defamation.

The court also agreed that Internet publication is worldwide and instantaneous, with the capacity for republication in limitless numbers and being permanently accessible in electronic databases.

Finally, the court noted there has never been a retraction or apology by the defendant.

The court ruled an award of $10,000 to the company was appropriate since there was no evidence the e-mails caused economic damage to Vaquero. Waldner, however, was awarded damages of $40,000.The court said the e-mails severely attacked his reputation, were vicious and caused him real concern.

The plaintiffs did not seek aggravated damages, but did request punitive damages. The court did not disappoint them and, after considering recent case law, agreed that punitive damages should be awarded in situations where the defendant’s misconduct is so malicious, oppressive and high-handed that it offends the court’s sense of decency.

Here, the court said the words were particularly malicious and awarded punitive damages to Waldner of $25,000. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.