Ontario Court Rules in Astley v. Verdun

On June 14, 2011, the Ontario Superior Court released its decision in Astley v. Verdun, 2011 ONSC 3651, a defamation case against a shareholder activist.

The plaintiff, a director of BMO and Chair of the CPPIB, sued the defendant for defamation for written and oral statements made by the defendant regarding the plaintiff's ethics, honesty, integrity, involvement in wrongdoing and fitness to be a director. The defendant opposed the plaintiff's appointment to the BMO Board in 2004 and commenced a very public campaign to attempt to have the plaintiff removed from the BMO Board.

Despite requests from the plaintiff, the defendant refused to stop his defamatory campaign. Eight defamatory publications made between 2004 and 2006 were at issue. Some of the defamatory publications were made as shareholder proposals to all five chartered banks, resulting in very wide publication to the shareholders of the banks, despite the fact the plaintiff was only connected to BMO.

Other defamatory publications were made in emails to directors and officers of BMO and in statements made by the defendant at bank AGMs, including banks other than BMO. The defendant also made defamatory remarks in a letter of complaint to the OSC that he then released to the media.

Legal action commenced in 2006, and the defendant continued to repeat his remarks about the plaintiff after the action commenced, again through shareholder proposals and statements at corporate AGMs.

The defendant, a well-known self-described corporate governance and shareholder activist, claimed he had the right to make the comments about the plaintiff. He relied on the defences of qualified privilege, fair comment and responsible communication. The defendant brought a counterclaim, also claiming defamation, as a result of media reports on the plaintiff's claim. The plaintiff obtained summary judgment dismissing the defendant's counterclaim in 2008.

The trial was originally scheduled for September 2010, but was adjourned at the defendant's request to May 2011.

Just prior to the trial commencing, the defendant self-published a book repeating and amplifying the alleged defamatory publications.

On May 20, 2011, after a 10-day trial, the jury awarded the plaintiff $250,000 in general damages and $400,000 in aggravated damages. The jury rejected all of the defendant's defences and found that the defendant acted with malice in each of the eight publications. After the jury rendered its verdict, the plaintiff requested before the trial judge a permanent injunction and his trial costs.

The defendant claimed that the court should deny the injunction request, order that the plaintiff not interfere with the self-publication of his book and order the plaintiff to pay him $2 million in costs.

On June 14, 2011, Justice Sandra Chapnik permanently enjoined the defendant from making or publishing any comments or statements about the plaintiff. Justice Chapnik found that the defendant intended to continue his defamatory campaign despite the jury's verdict.

The judge also found that there was also a real possibility that the defendant would not pay the damage award.

As a result, Justice Chapnik determined that a broad permanent injunction was justified.

The judge also ordered the defendant not to disseminate or distribute his self-published book, and to remove certain blog posts by the defendant about the plaintiff.

The plaintiff was awarded $215,919.32 in costs for the trial.

According to his blog, the defendant is appealing the injunction orders.

Lerners LLP's Brian Radnoff and Heenan Blaikie LLP's Don Jack represented the plaintiff, Robert Astley.

The defendant, Robert Verdun, was self-represented at the trial.