DATE: 20000622
                                                  DOCKET: C30314
                                                                 
                   COURT OF APPEAL FOR ONTARIO
                                
            McMURTRY C.J.O., GOUDGE AND SHARPE JJ.A.
                                
BETWEEN:                    )
                                   )  Patricia D.S. Jackson
ROBERT HODGSON                     )  Timothy Trembley
                                   )  for the (appellants on appeal)
                    Plaintiff      )  defendants
                    (Respondent)   )
                                   )
- and -                            )  Philip P. Healey
                                   )  for the (respondent on appeal)
CANADIAN NEWSPAPERS COMPANY        )  plaintiff
LIMITED, THE GLOBE AND MAIL, a     )
Division of CANADIAN NEWSPAPERS    )
COMPANY LIMITED,                   )
A. ROY MEGARRY, WILIAM             )
THORSELL, TIMOTHY PRITCHARD        )
AND JOCK FERGUSON                  )
                                   )
                    Defendants     )
                    (Appellants)   )
                                   )
                                   )  Heard:  May 2 and 3, 2000
                                   )
SHARPE J.A.:
OVERVIEW
[1]  On March 22, 1991, The Globe and Mail (the appellant)
published a front-page story reporting on the purchase of certain
lands from a developer by the Region of York. The Region paid a
substantial sum for the lands. The story stated that the
respondent, the Engineering Commissioner of York Region, had
recommended the purchase, but that planning documents indicated
that the Region was entitled to acquire the lands at no cost and
that the respondent had not disclosed that fact to the Regional
Council. It was also reported that the developer who received the
money was a long-time friend of the respondent. These allegations
were repeated in several subsequent articles.
[2]  The respondent brought this action for defamation. After a
78-day trial, Lane J., sitting without a jury, rejected the
defences of justification, fair comment and qualified privilege
and found that the appellant Jock Ferguson, the journalist who
wrote the articles, had acted with express malice.  The
respondent was awarded $880,000 for special, general, and
punitive damages.
[3]  The appellants allege that the trial judge erred in finding
that they had not proved justification and in rejecting their
defences of fair comment and qualified privilege.  The appellants
also attack the trial judge’s finding of malice.  They submit
that if they are liable, the trial judge erred with respect to
damages. The respondent cross-appeals, contending that the
damages should be increased, both because of errors made by the
trial judge and because of the manner in which this appeal was
conducted.
ISSUES
[4]  The following issues are raised:
   1.     Did the trial judge err in finding that the
          appellants had failed to establish justification?
   2.     Did the trial judge err in finding that the
          appellant Ferguson was guilty of actual malice?
   3.     Did the trial judge err in rejecting the defence
          of fair comment?
   4.     Did the trial judge err in rejecting the defence
          of qualified privilege?
   5.     Did the trial judge err with respect to damages?
   6.     Should the damages be increased because of the
          conduct of the appeal?
FACTS
(a) The article
[5]  In view of its central importance, I set out here the
complete text of the main article complained of.  It appeared as
the headline story on Friday, March 22, 1991, on the front page
of The Globe and Mail.
          Land bought by York Region should be free, files say
          Council follows engineering commissioner’s advice 
	  that compensation required for property to build 
	  overpass.
          By Jock Ferguson
          
          TORONTO
          One of the largest real estate developers in the
          Toronto area was given $783,500 by the Region of 
	  York for land that regional planning documents 
	  say the municipality should have received free.
          The payment to a company owned by Alfredo
          DeGasperis was arranged by Robert Hodgson,
          York Region’s commissioner of engineering.
          Mr. Hodgson advised the regional council last
          Oct. 10 that it had to pay for 1.55 hectares
          the region needed for the construction of an
          overpass on 16th Avenue, east of Yonge
          Street, over the CN Rail line in Richmond
          Hill, north of Toronto.
          The council approved the payment based on his
          advice.
          However, The Globe and Mail has learned that
          Mr. Hodgson did not bring forward information
          in his possession indicating that the land
          could have been obtained at no cost.
          He had been advised by his deputy, John
          Ireland, in a hand-written memorandum on Oct.
          1, 1990, that the land on 16th Avenue was to
          be conveyed to the region at no cost as part
          of a subdivision agreement signed in May,
          1989, between the Town of Richmond Hill and
          Mr. DeGasperis’s company.  A total of 306
          homes are to be built in the 20.25-hectare
          subdivision.
          “There was an assumption on my part that
          council knew of the subdivision agreement,”
          Mr. Hodgson said in an interview yesterday.
          “There was never any intent on my part to
          mislead council in this matter.”
          He said the wording of the DeGasperis
          subdivision agreement does not specifically
          say the land for the overpass had to be given
          to the region at no cost.
          He said it is his position that the developer
          had to hand over only the eight-metre right-
          of-way that is normally given to
          municipalities free.  And he added that the
          negotiated price saved the region $600,000
          from market value.
          Regional solicitor Edward Oakes said in a
          March 20 letter to Regional Chairman Eldred
          King that Mr. Hodgson’s action “was an
          informed, deliberate decision… and not the
          result of inadvertence.”
          The council and senior staff reviewed the
          controversial purchase in January and
          February, when the region’s legal department
          learned of the subdivision agreement from the
          planning department and questioned whether
          any payment should be made.
          Mr. Hodgson told the council that it was
          common practice to pay for such land
          acquisitions, but the legal department found
          that in two recent cases significantly larger
          road allowances – 2.55 hectares on Bathurst
          Street and 3.15 hectares on Rutherford Road
          and Keele Street – were obtained from other
          developers at no cost.
          The region regularly obtains strips of land
          at no cost from developers for road widening.
          The regional council voted in late February
          to go ahead with the payment after it
          obtained an outside legal opinion saying its
          Oct. 10 decision was a binding contract.
          The money was paid in early March.
          The Ireland memorandum was discovered on
          Wednesday by senior regional staff in
          gathering documents for a Globe reporter who
          had filed a request under the Ontario Freedom
          of Information Act to see all documents
          pertaining to the overpass land deal.
          Senior regional staff called in Ontario
          Provincial Police the same day because they
          suspected that documents relating to the deal
          may be missing from the engineering
          department files.
          The OPP seized 1,260 pages of documents from
          York Region’s offices in Newmarket on
          Wednesday and are investigating the deal.
          The documents were made available to The
          Globe yesterday in the offices of the OPP’s
          anti-rackets squad to comply with the request
          made under the Freedom of Information Act.
          Members of York Regional Council are now
          questioning why Mr. Hodgson personally
          handled the negotiations to purchase the land
          in meetings with Mr. DeGasperis and one of
          his executives when the responsibility for
          land acquisitions was specifically delegated
          by the council to Mr. Ireland.
          In a detailed examination of relations
          between municipal politicians, senior staff
          and real estate developers in York Region in
          1988, The Globe found that Mr. Hodgson is a
          long-time friend of Mr. DeGasperis.
          The engineering commissioner is a powerful
          figure in the fast-growing York Region
          because he personally controls information
          about the capacity in the giant York-Durham
          sewer system, a key component of all real-
          estate development in the area.  No
          development can occur without access to the
          sewer system.
          Mr. DeGasperis is the largest sewer
          contractor in Canada and, with partners Marco
          Muzzo and Rudolph Bratty, owns or has
          developed close to 10,000 hectares of land
          around Toronto, much of it in York Region.
          The engineering department files made
          available to The Globe yesterday in the
          offices of the OPP show that Mr. DeGasperis
          and Mr. Hodgson met in March, 1990, and that
          “Mr. Hodgson was not averse to paying” for
          the land needed for the overpass.  A further
          meeting between the two occurred in June in
          an attempt to reach a final agreement on the
          amount to be paid.
          The decision to pay for the land may cost the
          region a great deal more money.  Another
          developer who gave up land free to the region
          has told the council that he wants to reopen
          his agreement so that he can be treated in
          the same fashion as Mr. DeGasperis.
[6]  This article was followed by a number of subsequent articles
over the next several months in which essentially the same
statements were repeated.  Except for the purposes of damage
assessment, the trial focused almost exclusively on the first
article as did the arguments of the parties before this court.
[7]  In his reasons, reported at (1998), 39 O.R. (3d) 235, the
trial judge found that the plain and obvious meaning of the
articles was defamatory.  He stated at p. 257:
In summary, the plain and obvious meaning of these 
articles is devastatingly defamatory:  Robert 
Hodgson, Commissioner of Engineering, aware that 
the Region had the right to acquire the lands free, 
did not disclose that fact to Council when advising
it to pay his friend DeGasperis $783,000 for that 
land, despite being reminded by his deputy that the 
land was to come at no cost under the subdivision 
agreement.  Despite Mr. Hodgson’s denials, the 
Regional Solicitor reported to the Regional Chairman 
that the plaintiff did it deliberately.  In 
“arranging” this payment, the plaintiff was acting 
in an area of responsibility allocated to another 
officer.  His defence that it was common practice to 
pay in such situations was found to be contradicted 
by examples uncovered by the legal department.
[8]  The trial judge also found the following defamatory false
innuendoes which were not justified: (a) that the respondent was
not fit to be elected to the office of the Mayor of the Township
of King; (b) that the respondent acted dishonestly; (c) that the
respondent misconducted himself in his office and did not
properly discharge his duties in respect thereof; (d) that the
respondent deliberately misinformed representatives of his
employer to its detriment and that of his community; and, (e)
that the respondent improperly used his position to serve the
interest of DeGasperis to the detriment of the community.
(b) Background
[9]  The trial was a lengthy one and the trial judge gave
detailed reasons for judgment in which he made comprehensive
factual findings.  It is not necessary, for the purposes of this
appeal, to review all aspects of this long and difficult case. In
these reasons, I intend only to deal with the facts that have a
direct bearing on the issues raised on appeal.
[10] In mid-1988 a developer, Metrus Management, a company
controlled by Alfredo DeGasperis, applied to York Region for
approval of a plan of subdivision. In accordance with the usual
procedure, the application was circulated by the Region’s
Planning Department to other agencies, including the Engineering
Department headed by the plaintiff, for comment. An issue of
concern to the plaintiff and his department was the question of
the lands required for road widening, “daylighting triangles”, a
0.3 meter reserve, and the construction of an overpass over a CNR
right-of way, referred to in the evidence as the “grade
separation”.  The respondent recommended that the approval of the
plan of subdivision on the following condition:
          A condition of draft approval should require the
          road widening, daylighting triangles and 0.3 metre
          reserve, as shown in red on the attached plan, to
          be conveyed to the Region of York.
[11] The land shown in red on the plan is the entirety of what
later came to be referred to as Block 148.  Block 148 includes
the lands required for road widening, daylighting triangles, the
0.3 meter reserve, and as well, the lands required for the grade
separation. In April, 1989, the Planning Committee recommended
the following three conditions of subdivision approval with
respect to the lands required by the Region for the above noted
purposes:
          
             18.   The owner shall agree in the subdivision 
	     agreement to provide the necessary lands for 
	     the construction of a grade separation on 
	     Sixteenth Avenue (Y.R. 73) at the CNR right-of-way.
          
             23.   A widening, as represented by Block 148,
             together with the 15.0 meter by 15.0 metre
             daylighting triangles at the intersection of
             Street B and Sixteenth Avenue (Y.R. 73), as
             shown on the approved draft plan, shall be
             dedicated as public highway.
          
             24.   A reserve, 0.3 metres in width, adjacent
             to the widening referred to in Condition 23
             and the hypotenuse of the daylighting triangle
             referred to in Condition 23, as shown on the
             approved draft plan, shall be conveyed to The
             Regional Municipality of York, without
             monetary consideration and free of all
             encumbrances.
[12] The Regional Council adopted the Planning Committee’s
recommendation without amendment, thereby approving the plan of
subdivision, subject to the conditions being satisfied.  The
developer signed a subdivision agreement with the Town of
Richmond Hill, a term of which required the developer to convey
the lands in Block 148 free of cost.  A central issue is whether
it was intended or understood that the developer was required to
convey the lands required for the grade separation free of cost.
It was the respondent’s position that it was understood that the
Region would have to pay for these lands.  Following Council
approval, the respondent entered negotiations with the developer
for the acquisition of the lands required for the grade
separation.  It should be noted at this point that the appellants
did not attempt to support the statement in the article that the
appellant was a “long-time friend” of DeGasperis. A more apt
description of the relationship would be business acquaintance.
After lengthy negotiations, the respondent and the developer
agreed on a price of $783,650.  The respondent recommended to
Council acquisition of the lands for that price, and on October
10, 1990, Council accepted the respondent’s recommendation and
approved the purchase.  In making his recommendation to Council,
the respondent made no reference to Condition 23 or to the fact
that the lands were being acquired in connection with a proposed
plan of subdivision.
[13] Before the recommended purchase was submitted to Council, a
subordinate in the respondent’s department, John Ireland, raised
with the respondent the question of whether Condition 23 could
not be interpreted as entitling the Region to require conveyance
of the lands for the grade separation at no cost.  Ireland
thought that the matter should be disclosed to the Council.  On
October 1, 1990, shortly before the matter was put before
Council, Ireland sent the respondent the memorandum referred to
in the article.  It reads as follows:
          Bob Hodgson

          19T-88062 (Dovestone/Wedgeveld)
                                
          Regional Engineering Commissioner’s letters of
          Nov. 8/88 and March 30/89 request “the road
          widening….as shown in red on the attached plan, to
          be conveyed to the Region free of all costs….”
          (We showed the entire widening in red, including
          grade separation requirements).
          
          See Regional Council Conditions 2, 18, 23, 49, 50:
          
          18 — “The owner shall agree in the subdivision
          agreement to provide the necessary lands for the
          construction of a grade separation on Sixteenth
          Avenue (Y.. 73) at the CNR right-of-way.”
          
          23 — “A widening, as represented by Block 148,
          ….as shown on the approved draft plan, shall be
          dedicated as public highway.”
          
          (Block 148 is 1.482 hectares = 3.6620 acres.  The
          first 8 metres of widening accounts for approx.
          1.1329 acres of this.)
          
          Planning Dept. advises that the above wording of
          Condition 23 is standard for a request for
          widening such as was contained in our Nov. 8/88
          and March 30/89 letters.
          
          Our letters of Nov. 8/88 and March 30/89 indicate
          that it was our intention originally that Block
          148 be conveyed to the Region for free.  Given
          this fact and Regional Council’s Condition #23,
          the matter should be perhaps clarified with
          Engineering Committee and Council before any of
          Block 148 is paid for (particularly given the sum
          involved — almost $800,000).  Also, without such
          clarification the Regional Solicitor may have
          difficulty clearing Condition #23 or executing a
          purchase agreement.
                                                John Ireland
                                           October 1st, 1990
[14] The respondent testified that he did not see this memorandum
at the time, but the trial judge rejected his evidence on the
point and found that he did receive the memorandum before the
matter went before the Council.
[15] As noted by the trial judge, there was serious conflict
between the respondent and the Regional Solicitor, Edward Oakes.
After Council approved the purchase on October 10, Oakes became
aware of Condition 23.  He refused to clear the conditions of
subdivision approval on the basis that he had conflicting
instructions from Council, namely Condition 23, requiring the
lands to be given for free, and the decision of October 10, 1990
to purchase the land for $783,650.  Council retained an
experienced municipal law expert, Mr. George Rust D’Eye, to
provide it with an opinion as to whether the October 10, 1990
resolution required it to pay DeGasperis or whether it could
enforce the provision in the Richmond Hill subdivision agreement
which required the developer to provide the land free of cost.
Mr. Rust D’Eye’s opinion was that the Region was contractually
bound to go through with the purchase of the lands. Although he
was asked to give an opinion on the effect of the October 10,
1990 resolution and was not specifically asked for his opinion as
to the legal effect of Condition 23, in his letter to the Region,
Mr. Rust D’Eye stated as follows:
It is noted that whereas condition 24 refers to a 
conveyance ‘without monetary consideration and free 
of all encumbrances’, Conditions 18 and 23 merely 
speak of the owner as agreeing to provide the lands, 
and that lands be dedicated as public highway,
respectively.  In this sense, ‘dedicated’ should not 
be taken necessarily to refer to a gift, without 
charge, but to the giving over of property for use 
as a road.
[16] On the basis of the Rust D’Eye opinion, the Regional Council
approved payment to the developer, but did so by rescinding its
decision of October 10, 1990, and paying the developer a grant.
This was done to avoid setting a precedent of paying a developer
for land sought to be acquired as a condition of subdivision
approval.
[17] In mid-March 1991, Oakes learned of the existence of the
Ireland memorandum.  He confronted the respondent, who denied
receiving the memorandum at the time of Council’s October 1990
deliberations. The original of the memo was missing from the
relevant file in the clerk’s department. A search turned up a
copy of the document a few days later and it was turned over to
the Regional Solicitor.
[18] On March 20, 1991, Oakes wrote to the Regional Chairman
Eldred King, accusing the respondent of having deliberately
misinformed Council as to the existence of Condition 23. Oakes
accused the respondent of lying about the memorandum and advised
that the legal department could no longer work with the
respondent on property acquisition matters.  Oakes’ letter led
the Regional Chairman to contact the Ontario Provincial Police to
investigate the missing memorandum.  The article in The Globe and
Mail followed on March 22.
[19] Immediately upon publication of the article, Chairman King
called a special meeting of Council to discuss the respondent’s
situation.  Legal counsel was retained for an opinion on the
dismissal of the respondent.  While the trial judge found that
the legal counsel was not given all the facts, they advised that,
the respondent could be dismissed.  They reasoned that absent
some credible explanation from the respondent, his failure to
disclose that the lands in question were subject to a condition
of subdivision approval and his failure to honestly and openly
acknowledge the existence of a memorandum which could have
impacted on the Council’s decision, could provide the basis for a
fundamental loss of trust that would justify dismissal.
[20] King attempted to negotiate a termination settlement with
the respondent. The respondent refused to resign and requested a
hearing under the Municipal Act, R.S.O. 1990, C.M. 45.   Prior to
the hearing, the respondent’s solicitor examined Ireland on the
issue of whether he gave the memo to the plaintiff. The
respondent provided Council with detailed written submissions,
and an affidavit in which he swore that he did not receive the
Ireland memo before January 1991. An all-day hearing was held on
April 25, 1991.  In addition to the respondent’s affidavit, there
were affidavits from Ireland, Oakes and others, as well as a
report prepared by legal counsel. Ireland swore that the
respondent did have his memo before the October 10, 1990 Council
meeting. Members of Council and the plaintiff’s solicitor asked
questions of Oakes, Ireland, and the other deponents.
[21] The respondent took the position before Council that
Ireland’s evidence, should not be believed.  The respondent
maintained that position at trial.  Ireland was subjected to a
vigorous cross-examination and was accused of lying and forgery.
As already noted, the trial judge accepted his evidence and found
that the respondent had received the memorandum prior to the
October 10, 1990 meeting.
[22] After the hearing, Council decided, by a vote of 15-3, to
dismiss the plaintiff.  Council did not, however, make any
finding of wrong-doing, but rather paid the respondent a
severance allowance of $214,000 representing 18 months salary.
[23] The only Councillor who voted on the termination resolution
who testified at trial was Councillor John West. West provided
the following explanation for his decision to vote in favour of
dismissing the plaintiff:

          Well, I think there was really, basically, two or
          three things which made my mind up when I -- when
          I came to vote, there would have been three things
          which made my decision or helped make my decision.
          Number one was that it didn’t matter to me whether
          it was deliberate or accidental, regarding the
          land.  The fact was that there was a cost.  And I
          think Bob [Hodgson], unfortunately, had let me
          down personally and the committee and the council.
          
          Number two, I was a little bit disturbed that the
          blame was being shifted to Mr. Ireland.  I had a
          great respect -- I must be very frank with you, I
          like Bob.  I really had a very good rapport with
          him.  We argued, we fought, but then I did that
          all the time with everybody, but I did have a good
          rapport with John [Ireland], as well.  And I don’t
          know.  John is one person who, he’s actually a
          strange person.  He’s one person I don’t think
          would tell a lie.  I don’t know why, but I found
          him a very forthright person.  And those two
          things together made my third decision --
          actually, it wasn’t an easy decision.  You know,
          firing somebody in my opinion is not an easy
          decision.  But those two things made my third
          decision fairly easy, that I felt that those two
          combined was the thing.
          
          And the third one which compounded the two
          together was that I had lost faith in him.  So it
          was really three items which made my decision in
          the end for the dismissal of Bob.
[24] The trial judge found that these events had a devastating
effect on the respondent. The allegations made in the first
article were repeated several times in subsequent articles in The
Globe and Mail, and similar stories appeared in other newspapers.
The respondent was shunned socially and professionally and was
unable to find work as a planning consultant.  He decided to run
for Mayor in order to clear his name but again, The Globe and
Mail repeated the libel.
ANALYSIS
Issue 1:  Did the trial judge err in finding that the appellants
had failed to establish justification?
[25] The appellants challenge the trial judge’s findings as to
the meaning of the article in their notice of appeal, but the
point was not pressed in either their factum or oral submissions.
The appellants conceded before this court that a reader could
infer the meaning found by the trial judge.  They say, however,
that it would be a matter of inference and opinion for a reader
to interpret the articles as conveying that meaning.  The
position of the appellants is that the essential facts stated in
the article are true, that the defence of justification is made
out with respect to the facts, and that the inferences a reader
might draw are covered by the defences of fair comment and
qualified privilege.
[26] The trial judge found that the conditions of subdivision
approval did not require the developer to convey the lands for
free.  The trial judge also found that, in any event, the
respondent had an honest belief that the Region had to pay for
the lands.  The trial judge accepted the respondent’s evidence on
his understanding of the meaning of Condition 23. The respondent
did not believe that Condition 23 entitled the Region to obtain
all of the lands in Block 148 without payment.  Rather, he read
Condition 23 together with Conditions 18 and 24, in the light of
what he believed to be accepted planning practice.  The
respondent testified that in his mind, there was a clear
distinction between lands required for road widening, daylighting
triangles and a 0.3 meter reserve and the lands required for the
grade separation.  The respondent testified that the former fell
into the category of lands that a municipality would ordinarily
expect to receive for free as a condition of subdivision
approval, while the latter fell into the category of lands for
which a municipality would be expected to pay.  As the respondent
did not believe there was any question but that the Region had to
pay for the lands required for the grade separation, he did not
bring the terms of Condition 23 to Council’s attention when
recommending acquisition at the price he had negotiated with
Metrus.  The trial judge accepted the respondent’s evidence on
these points and agreed with the respondent’s interpretation of
Condition 23.
[27] The key point, in the submission of the appellants, is that
the trial judge erred in interpreting the conditions of
subdivision approval.  The appellants contend that, properly
interpreted, the conditions of subdivision approval did require
the developer to convey the lands for free.  They say that the
trial judge’s finding to the contrary was a fundamental error
that tainted his related finding that the respondent had an
honest belief that the region had to pay for the lands.
[28] The appellants rely on a number of points that lend
considerable force to the argument that Condition 23 did require
the lands to be conveyed for free.  We were referred to several
authorities that suggest that in planning law, the word
“dedicate” ordinarily means to give or transfer without charge.
Rogers, Canadian Law of Planning and Zoning 9 (updated 1999), at
p. 114.29, states that the purpose of  the Planning Act, R.S.O.
1990, c.P.13, s.51(5), authorizing the imposition as a term of
subdivision approval that lands be “dedicated”  is to enable
municipalities “to compel a subdivider to donate without
compensation land not only for highways but for other public
purposes.” Blacks Law Dictionary 7th ed., (1999) at p. 421
defines the word “dedication” in relation to property as “the
donation of land or the creation of an easement for public use”,
and Rogers, supra, at page 114.32(l) states that the words
“dedicate” and “donate” have been used interchangeably.  Although
the point never seems to have been decided explicitly, courts
have assumed that dedicate is an equivalent for convey free of
charge: see Village Shopping Plaza (Waterdown) Ltd. et al .v
(Regional Municipality) Hamilton Wentworth (1981), 34 O.R. (2d)
311 (Div. Ct.) at 314; and Corp. of Delta v. Turin (1982), 20
M.P.L.R. 208 (B.C.S.C.) at 211. The appellants also submit that
the grade allowance was sufficiently related to the subdivision
to allow the imposition of a term that the lands required be
conveyed without charge: see Minto Construction Ltd. v. Regional
Municipality of Ottawa-Carleton (1976), 6 O.M.B.R. 234 at 237;
Mills v. York (Regional Municipality) Land Division Committee
(1976), 9 O.R. (2d) 349 (Div. Ct.) at 352-3.  The appellants
place heavy reliance on the evidence of Councilor John West, who
had extensive experience in the Region. The trial judge did not
refer to his evidence.  West testified that:
dedicated simply means it’s being given free.  It 
was the standard thing when developers would dedicate 
a piece of land…I’m not a lawyer but when somebody 
tells me it is dedicated, it means free. … for 22 
years I dealt with developers -- in all the 22 years 
I’ve never heard dedicated to the town or to the
municipality meant that we had to pay for it.
[29] The appellants also point out that Condition 23 came about
as a direct result of the respondent’s own recommendation that
the developer be required to convey the lands in Block 148 “free
of all costs and encumbrances”.  Another point is that the
developer did sign a subdivision agreement with the Town of
Richmond Hill that clearly required Block 148 to be conveyed
without charge.
[30] While the interpretation of Condition 23 is not crystal
clear, I am not persuaded that the trial judge erred in his
interpretation.  The weakness in the appellants’ argument is that
it takes Condition 23 and the word “dedicate” as if they stood on
their own, in isolation and out of context.  In my view, the
language of Condition 23 has to be read together with the
Conditions 18 and 24.  Condition 18 specifically refers to the
lands required for the grade separation but does not say that the
lands are to be provided at no cost.  Condition 24 refers to
other lands, excluding those required for the grade separation,
and requires that they be conveyed “without monetary
compensation”.  It seems to me that read together with Conditions
18 and 24, Condition 23 is at least ambiguous and that the trial
judge was entitled to take into account extrinsic evidence that
strongly supported the respondent’s interpretation.  While the
evidence showed that the Region had often used “dedicate” to mean
free of charge, the Region had never before required the transfer
of land for a grade separation as a condition of subdivision
approval.  There was considerable evidence led by the respondent
that others who were involved in the process and who were
knowledgeable in planning matters shared the respondent’s view
that established planning practice simply would not support
requiring conveyance of these lands at no cost.
[31] The trial judge also found that even if Condition 23 did
impose a legal obligation on the developer to convey the grade
separation lands at no cost, he was satisfied that the respondent
had an honest belief that the Region had to pay for the lands.
In my view, there is no basis for this court to interfere with
that finding.  I hardly need point out that the trial judge was
well placed to assess the credibility of the respondent.  In
addition to the ambiguity of Condition 23 and the other points
already mentioned, there was ample evidence to support the
finding.  The respondent conducted his negotiations with the
developer openly and other planning officials readily accepted
that the Region would have to pay for the lands.  While John
Ireland suggested that it would be advisable to lay the whole
matter before the Council, in his evidence at trial he agreed
with the respondent’s interpretation of Condition 23.  Other
witnesses in the employ of the Region were similarly of the view
that the Region had to pay for these lands.  Even Oakes and King,
who were found by the trial judge to be antagonist to the
respondent, conceded that the matter was at best ambiguous.
[32] Accordingly, I do not agree that the trial judge erred in
rejecting the defence of justification.
Issue 2:  Did the trial judge err in finding that the appellant
Ferguson was guilty of actual malice?
[33] The issue of malice is relevant to both the defences of fair
comment and qualified privilege and to the assessment of damages.
In Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130
at 1189, Cory J. described malice in the following terms:
Malice is commonly understood, in the popular sense, 
as spite or ill-will.  However, it also includes; … 
“any indirect motive or ulterior purpose” that conflicts 
with the sense of duty or the mutual interest which the 
occasion created … .  Malice may also be established by 
showing that the defendant spoke dishonestly, or in 
knowing or reckless disregard for the truth.
[34] Similarly, in Botiuk v. Toronto Free Press Publications Ltd.
(1995), 126 D.L.R. (4th) 609 at 627, Cory J. stated:
Malice is commonly understood as ill will toward 
someone, but it also relates to any indirect motive 
which conflicts with the sense of duty created by 
the occasion.  Malice may be established by showing 
that the defendant either knew that he was not 
telling the truth, or was reckless in that regard.
[35] Malice, then, relates to the state of mind of the defendant.
As it is usually difficult to prove spite or ill-will, malice is
ordinarily established through proof that the defendant knew that
the statement complained of was untrue, was reckless with respect
to its truth or that the defendant had some improper motive or
purpose.  It has also been held that malice is shown where the
defendant did not believe the truth of the statements published:
see Brown, The Law of Defamation in Canada, 2nd ed. (1999), at p.
16-18 – 16-19.
[36] The trial judge found that the appellant Ferguson was guilty
of malice for two reasons.  First, the trial judge found that
Ferguson did not believe the truth of what he had written.
Second, the trial judge found that Ferguson had written the
articles complained of with an improper motive or purpose.  For
the reasons that follow, it is my view that the trial judge erred
in making a finding of malice on the first ground, but that his
finding on the second ground should be upheld.
[37] During his examination in chief, Ferguson was asked whether
he meant the meanings imputed to the articles pleaded by the
respondent, namely that the respondent had misconducted himself
in his office, failed to perform his duties, acted dishonestly,
or had improperly close relations with land developers.  He began
to answer that he did not mean to convey those meanings when
objection was taken to the line of questioning.  The trial judge
ruled that evidence of what Ferguson intended was inadmissible
but that Ferguson could be asked if he had any belief in the
imputed meanings.  The transcript does not record any reasons for
this ruling.  However, in his reason for judgment, the trial
judge referred to the rule that in determining the natural and
ordinary meaning of the words, no evidence is admissible.  He
stated, at p. 253, that it is for the trier of fact to determine
the sense in which the words would reasonably have 
been understood by an ordinary man in the light of 
generally known facts. The intention of the author 
and publisher is not relevant on the issue of 
meaning. Accordingly, I do not consider the evidence 
in that respect elicited from the author, Ferguson, on
this branch of the case.  (Emphasis added.)
[38] This would appear to be the basis for the ruling limiting
what Ferguson could say as to what he meant when writing the
articles. Following the ruling, Ferguson was asked whether he
believed the truth of pleaded imputed meanings. He answered that
he did not.  The trial judge based his finding of actual malice,
in part, on Ferguson’s evidence that he had no belief in the
truth of the statements pleaded by the respondent.
[39] In my view, the trial judge should not have made a finding
of malice on this basis.  The appellant Ferguson was effectively
precluded from offering a full explanation of his state of mind
when he wrote the articles.  The ruling restricting the evidence
that could be led with respect to intended meaning effectively
precluded Ferguson from fully answering the respondent’s
allegation of malice.  As Ferguson’s trial counsel noted when he
was attempting to lead the evidence, “this is like having both
hands tied.”
[40] Where a defendant is faced with an allegation of express
malice, it is unfair to deny the defendant a full opportunity to
explain his or her state of mind.  I fail to see how it is
possible to establish a subjective state of mind if the defendant
is precluded from explaining what he or she meant when writing
the allegedly defamatory words.  This is exactly what happened to
Ferguson.  Because he was not permitted to speak as to the
story’s meaning, he could not fully testify as to his honest
belief or otherwise explain his state of mind.  The result, in my
respectful view, is that the trial judge made a finding as to the
reporter’s state of mind having deprived him of an opportunity to
explain his state of mind.
[41] I do not question the rule relied on by the trial judge with
respect to the issue of imputed meanings.  On that issue, the
authorities hold that extrinsic evidence, including the intention
of the author and the understanding of the plaintiff, is not
relevant: see Brown, supra, pp. 5-65 – 5-70.  The difficulty is
with the application of that rule to the very different issue of
malice.  Evidence may be inadmissible and irrelevant on one
issue, but admissible and relevant on another.
[42] While the question appears not to have been the subject of
extensive discussion in the case law, there is support for the
proposition that evidence of the author’s intended meaning is
admissible and relevant to the issue of malice.  In Fraser v.
Mirza, [1993] S.L.T. 527 (H.L.) the issue was whether the pursuer
was entitled to rely on evidence of the defendant’s intended
meaning in establishing malice.  It was argued by counsel, at p.
530, that “while an allegedly defamatory statement falls to be
construed objectively by reference to the ordinary and natural
meaning of the words, the question whether it was made
maliciously depends upon the ascertainment of the subjective
state of mind of the maker of the statement at the time it was
made.”  The House of Lords accepted the argument and held, at p.
531, that the defendant’s “intentions in respect of what he was
trying to convey by the letter are properly taken into account
for the purpose of ascertaining what was the dominant motive
operating on his mind at the time he wrote it.”  If it is open to
a plaintiff to rely on the defendant’s intended meaning to
establish malice, it must equally be open to the defendant to
adduce evidence of this or her intended meaning to meet an
allegation of malice.
[43] An analogy may be drawn here to the rule that allows a
defendant to plead and justify a different meaning: see Pizza
Pizza v. Toronto Star Newspapers Ltd. et al. (1998), 42 O.R. (3d)
36 (Div. Ct.), aff'd [2000] O.J. No. 228 (C.A.).  As I stated at
p. 44:
The defendant who does not accept the meaning pleaded 
by the plaintiff cannot, as a practical or tactical 
matter, simply deny that meaning.  Such a denial would 
ring hollow if the defendant did not offer a different 
meaning.  Where, as in the present case, the defendant 
asserts a different but also defamatory meaning, its 
position becomes scarcely tenable before the trier of 
fact if it is precluded from pleading the truth of that
meaning.  (Emphasis added.)
[44] I conclude, therefore, that the trial judge erred by basing
his finding of express malice on the basis of Ferguson’s evidence
that he did not believe the truth of the imputed meanings pleaded
by the respondent having denied Ferguson the opportunity to
explain what he did mean.
[45] However, the trial judge also found malice on other grounds
“quite apart from Mr. Ferguson’s own belief or lack of belief”.
There was ample evidence to support the trial judge’s finding
that Ferguson’s purpose was not to report the facts but rather to
create a sensational story.  The trial judge made extensive
adverse findings as to Ferguson’s conduct in writing the story.
Among the findings supporting malice were the following. First,
Ferguson relied on Oakes as a source when he knew of the friction
between Oakes and the respondent and knew Oakes to be partisan.
Second, Ferguson knew of evidence that supported the position of
the respondent, in particular the Rust D’Eye opinion, but
suppressed it.   Third, Ferguson failed to give Hodgson a fair
chance to explain his side of the story in the first article and
made no effort to present a balanced picture in the articles that
followed.  Fourth, the defendants did not even attempt to justify
the statement that the respondent was “long-time friend” of
DeGasperis, a statement that could only be read in the context as
suggesting dishonesty on the part of the respondent.  In the end,
the trial judge’s findings amount to this: Ferguson was, above
all, intent on writing a sensational story and engaged in
“systematic reporting of one side and non-reporting of the
other.”  In view of the trial judge’s detailed and explicit
rejection of Ferguson as a credible witness and the high degree
of deference the court must accord to finding of facts, I see no
basis for interference with these findings.  They provide an
adequate foundation for a finding of malice, and they are not
infected by the error I have identified with respect to
Ferguson’s intended meaning.  The trial judge found that,
whatever he meant to say, and whatever his belief, Ferguson was
on a mission to write a sensational story without regard for the
facts.
Issue 3:  Did the trial judge err in rejecting the defence
of fair comment?
Issue 4:  Did the trial judge err in rejecting the defence
of qualified privilege?
[46] In the face of the findings related to malice that I have
just reviewed, I cannot accept the appellant’s attempt to
characterize the articles they published as an honest attempt to
present the true facts on an important issue of public concern.
The finding of malice is fatal to the defences of fair comment
and qualified privilege, and I need not consider whether but for
malice, those defences were made out. We were also invited to
consider the expanded scope for the defence of qualified
privilege established by the House of Lords in Reynolds v. Times
Newspapers Ltd., [1999] 4 All E.R. 609 and by the High Court of
Australia in Lange v. Australian Broadcasting Corporation, [1997]
189 C.L.R. 520.  It is clear from both decisions that a finding
of malice also excludes the expanded defence of qualified
privilege.  Accordingly, it is not necessary for us to express an
opinion on whether or not the scope of the defence of qualified
privilege should be expanded in Ontario.
Issue 5:  Did the trial judge err with respect to damages?
(a) Special Damages
[47] The trial judge found that the respondent was secure in his
position as Commissioner of Engineering until the publication of
the defamatory articles by the appellants.  The trial judge found
that the respondent’s dismissal was caused by the appellants’
defamatory articles and awarded damages accordingly.  Special
damages were calculated in the amount necessary to compensate the
respondent for the loss of his position from the date of his
dismissal to the date of his expected retirement, less the amount
he received as a termination allowance from the Region and with a
reduction for contingencies.
[48] No issue is taken with the calculation of the special
damages in the amount of $380,000.  The appellants submit,
however, that the trial judge erred in law making any award for
loss of income.  The appellants say that the cause of the
respondent’s loss was the decision of the Regional Council to
terminate the respondent, made after a full statutory hearing,
held for the specific purpose of examining the respondent’s
conduct and with a view to determining whether he should be
terminated as a result.
[49] The trial judge accepted the evidence of Chairman King, who
attended the hearing but did not vote, that the reason for
termination related to the land acquisition and to the failure of
the respondent to give Council all the relevant facts.  The
appellants submit that having made this finding as to the reason
for the plaintiff’s termination, the trial judge erred in law in
holding the defendants liable for the plaintiff’s termination.
The appellants rely on the evidence of Councilor West, not
mentioned by the trial judge, that the plaintiff was terminated
because he let Council and the Engineering Committee down,
attempted to shift the blame to his subordinate, and that his
conduct had led to a loss of faith.
[50] In my view, there was evidence to support the trial judge’s
finding that there was a sufficient causal link between the
defamatory articles and the respondent’s termination to justify
an award of damages.  The controversy about the respondent’s non-
disclosure of Condition 23 and the fact that the purchase
involved lands governed by conditions of sub-division approval,
as well as the respondent’s non-disclosure of the Ireland
memorandum, had arisen long before the first article appeared on
March 22, 1991. The March 22 article appeared in an election year
and it provoked an immediate response from the Region leading
directly to the respondent’s termination.  The Chief
Administrative Officer of the Region testified that the political
actors were afraid of how the public would react to the story and
decided that immediate action was required to put an end to the
controversy.  It was open on the evidence for the trial judge to
find that, but for the article, the Region would have come to a
practical resolution of the issue without any impact upon the
respondent’s continued employment.  It is significant that, as a
result of the statutory hearing, the Regional Council concluded
that there were not grounds for termination for cause.  Despite
the fact that he was not guilty of wrongdoing, the defamatory
article rendered the respondent a liability that had to be
disposed of.  Had the Regional Council arrived at an independent
conclusion that the respondent was guilty of the wrongdoing
attributed him by the article, the situation might well be
different.  The fact that the Region did not dismiss the
respondent for cause, but paid him a substantial termination
allowance supports the trial judge’s conclusion that the
effective cause of his dismissal was the damage to the
respondent’s reputation and standing resulting from the March 22
article.
[51] Accordingly, I would not interfere with the award of special
damages.
(b) General Damages

(i) Aggravating factors
[52] The trial judge also awarded $400,000 for general and
aggravated damages. The appellants submit that the trial judge
erred in awarding aggravated damages.
[53] In Hill v. Church of Scientology, supra at p. 1205, Cory J.
stated that an award of aggravated damages is appropriate:
...where the defendants’ conduct has been particularly 
high-handed or oppressive, thereby increasing the 
plaintiff’s humiliation and anxiety arising from the 
libellous statement.  The nature of these damages was 
aptly described by Robins J.A. in Walker v. CFTO Ltd., 
supra, [(1987), 59 O.R. (2d) 104 (C.A.)] in these words 
at p. 111:
Where the defendant is guilty of insulting, high-
handed, spiteful, malicious or oppressive conduct 
which increases the mental distress – the humiliation, 
indignation, anxiety, grief, fear and the like –
suffered by the plaintiff as a result of being defamed, 
the plaintiff may be entitled to what has come to be 
known as ‘aggravated damages’.
[54] As noted in Walker, supra, the compensatory character of
aggravated damages distinguishes them from punitive damages.  As
Cory J. emphasized, at p. 1205, they are intended to “take into
account the additional harm caused to the plaintiff’s feelings by
the defendant’s outrageous and malicious conduct.”
[55] The trial judge did not make a distinct award of aggravated
damages.  He stated at p. 403:
the boundary between those factors which increase 
the general damages, and those which lead to 
aggravated damages is problematic and on the 
particular facts of this case it is preferable to 
deal with the two classes of damages together.
[56] He went on to list a number of factors that, in his view,
warranted a substantial damage award.  He noted the very serious
nature of the libel and the prominence it was given by “one of
this country’s most prestigious and influential newspapers” and
that the libel was repeated several times.  The trial judge found
that the libel had a devastating effect on the respondent.  He
referred to several of his findings regarding the appellant
Ferguson that led to the finding of malice, especially to
Ferguson’s failure to give the respondent an adequate opportunity
to present his side of the story and to what the trial judge
regarded as Ferguson’s deliberate attempt to create the false
impression that the story represented the recent discovery of a
major scandal.
[57] I am not persuaded that the trial erred in taking into
account the clear findings of malice on the part of Ferguson and
the devastating effect of the libel on the respondent when
assessing general damages.
[58] The appellants say that this is not a case for aggravated
damages as the respondent was not entirely blameless for what
happened. A crucial point in the entire affair was the manner in
which he dealt with – or failed to deal with – the Ireland
memorandum.  The respondent consistently denied receiving it
before the October 10, 1991 Council meeting, yet the trial judge
found that he had received it.  The appellants, therefore,
contend that much of the aggravation is attributable to this
failing, and council’s response to it, rather than to any action
on their part.
[59] The difficulty with that submission is that none of this
would have been an issue had the appellants not published the
defamatory articles.  They cannot escape the findings of the
trial judge that the respondent was the unsuspecting subject of
their sensational and unwarranted attack.
[60] As there was no error in principle in taking these
aggravating factors into account when assessing the general
damages, the only question is whether the damages awarded were
excessive.  The standard of review of libel damage awards is so
stringent as to offer little prospect of success: see e.g. Hill
v. Scientology, supra at pp. 1194-1196.  Undoubtedly deterred by
these strictures , the appellants have not invited this court to
review the quantum of the award as an alternative argument to
their basic submission that this was not a case for aggravated
damages.
(ii) Other articles
[61] The appellants submit that the trial judge erred in failing
to take into consideration reports by other media of the
controversy in the Region.  The appellants placed special
emphasis on an article in The Toronto Star that appeared the day
after the first Globe and Mail article, and that in some ways,
was even more slanted against the respondent.
[62] I see no merit in this ground of appeal in view of the
findings of the trial judge that the appellant Ferguson was
intent on breaking a sensational “scoop” and that he achieved
that objective with the publication of the first article.  The
harm to appellant flowed directly and immediately upon the
publication of that article.  In my view, the trial judge did not
err in failing to reduce the damages because the same libel was
published by others.
(c) Punitive Damages
[63] Punitive damages are rarely awarded and are only appropriate
in limited circumstances.  In Hill v. Church of Scientology,
supra at p. 1208, Cory J. stated:
Punitive damages may 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.  Punitive damages bear no relation to what the 
defendant should receive by way of compensation.  Their 
aim is not to compensate the plaintiff, but rather to 
punish the defendant.  It is the means by which the 
jury or judge expresses its outrage at the egregious
conduct of the defendant.  They are in the nature of a 
fine which is meant to act as a deterrent to the 
defendant and to others from acting in this manner. 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.  (Emphasis added.)
[64] In my view, the trial judge erred in awarding punitive
damages in the present case.  I do not agree that an award of
punitive damages was required to achieve the goal of punishment
and deterrence in view of the other damages awarded.  The award
of $780,000 imposes upon the appellants a heavy price for the
wrong they have committed.  This is a very substantial award that
already reflects the trial judge’s strong disapproval of the
appellant’s wrongful conduct.  An award of such a significant
amount is easily within the range of damages that will have a
deterrent effect.  I fail to see any need for a further award, in
the nature of a fine, to achieve the purposes of punishment and
deterrence.  The statement of Robins J.A. in Walker, supra, at p.
121-2 is apposite:
In the present case, with total damages to the tune 
of $908,000, what rational purpose is to be achieved 
by tacking on an extra $50,000 as exemplary damages?  
In my view, none.  General damages of that magnitude 
are alone patently sufficient to satisfy whatever 
need there may be for punishment or deterrence.  A 
different conclusion might prevail if the jury had
decided that the general damages required to vindicate 
the company’s reputation (and that, as stated earlier, 
was the only injury to be compensated for here) were 
nominal or small or otherwise in some reasonable 
proportion to the reputational harm caused by the 
defamatory publication.
[65] Accordingly, I would set aside the award of punitive
damages.
(d) Cross Appeal
(i) Relationship between special and general damages
[66] The respondent submits, by way of cross-appeal, that the
trial judge erred in taking into account his award of special
damages when assessing the appropriate level of general damages.
The appellants respond that the trial judge did not err in so
doing.
[67] In my view, the amount awarded for general damages must be
considered in light of the amount awarded for special damages.
Significant awards for special damages in defamation cases are
the exception rather than the rule, and it is precisely for that
reason that it is said that general damages are “at large”.
[68] As noted by Lord Atkin in Ley v. Hamilton (1935), 153 L.T.
384 (H.L.) at 386 (a passage quoted by the trial judge at p.
402):
It is precisely because the ‘real’ damage cannot 
be ascertained and established that the damages are 
at large.  It is impossible to track the scandal, to 
know what quarters the poison may reach:  it is 
impossible to weigh at all closely the compensation 
which will recompense a man or a woman for the
insult offered or the pain of a false accusation.
[69] The same point was made by Cory J. in Hill v. Scientology,
supra, at pp.1197-8, in refusing to impose a cap on general
damage awards in defamation cases.  Cory J. contrasted the
situation in a personal injury action where the plaintiff is
fully compensated for pecuniary losses:
A very different situation is presented with 
respect to libel actions. In these cases, special 
damages for pecuniary loss are rarely claimed and 
often exceedingly difficult to prove.  Rather, the 
whole basis for recovery of loss of reputation
usually lies in the general damages award. (Emphasis 
added.)
General damages for defamation ordinarily compensate the
plaintiff for his or her entire loss, including an estimate of
actual and anticipated pecuniary loss: McCarey v. Associated
Newspapers (No. 2), [1965] 2 Q.B. 86 (C.A.) at 104.
[70] In the present case, because of the age and circumstances of
the respondent, the trial judge was in the unusual position of
being able to measure with some considerable degree of precision
the actual damages suffered as a result of the defamation.  The
trial judge found that the defamation had a measurable effect on
the defendant and made a special damages award compensating the
respondent for the full measure of the economic loss he would
suffer through to retirement.  This was not the typical case
where the full measure of compensation is made through the award
of general damages.  It is my view that it was imperative for the
trial judge to take into account the very generous award he made
for special damages when assessing general damages. To make a
general damage award without reference to the special damages
would, in my view, constitute an error in principle warranting
the intervention of this court.
[71] Indeed, rather than being too low, it seems to me that in
view of the special damage award, the general damages are very
high.  Were it not for the strictures imposed upon this court
limiting its intervention to review the quantum of libel damage
awards, this would be a case for reducing rather than increasing
the general damages awarded, in light of the special damages.
[72] In Hill v. Scientology, supra, Cory J. observed that there
was no indication that the level of libel damage awards was a
matter of concern in Canada.  Cory J. based that opinion on the
fact that from 1987 to 1991, the average award in reported libel
cases was $30,000.  From 1992 to 1995, the average award was said
to be $20,000.  In the five years following Hill v. Scientology,
there has been a steady escalation in the level of libel damage
awards. The judgment in the present case serves as an example.
It must not be forgotten that the award in Hill v. Scientology
was said by the Supreme Court to be justified by the exceptional
circumstances of the case.  As the British Columbia Court of
Appeal stated in Brown v. Cole (1998), 186 B.C.A.C. 73 at 90 when
reducing an award from $450,000 to $160,000, Hill v. Scientology
“is not a benchmark in ordinary cases of defamation.  One does
not start with the awards in Hill v. Church of Scientology, and
work oneself down.”  One should not loose sight of the basic
principle that libel damage awards, like damage awards for other
wrongs, should be based upon a rational attempt to measure in
money terms the loss and injury the plaintiff has suffered.  The
special damage award in the present case meets that test.  It is
less obvious to me that an additional $400,000 for general
damages does so.  It is my view that unless this basic principle
is kept clearly in mind in libel cases, there is a clear risk of
escalating and excessive awards.
[73] The risk posed by excessive libel damage awards has been
judicially recognized in England.  The Lord Chief Justice, at the
time Master of the Rolls, Lord Bingham  stated in John v. MGN
Ltd., [1996] 2 All E.R. 35 (C.A.) at 48: “A series of jury awards
in sums wildly disproportionate to any damage conceivably
suffered by the plaintiff has given rise to serious and justified
criticism of the procedures leading to such awards.”   While the
circumstances of the present appeal do not permit this court to
interfere with the award, neither should this judgment be read as
condoning or encouraging similar awards, especially were the
circumstances allow for full compensation for pecuniary damages.
(ii) Apology to DeGasperis
[74] DeGasperis threatened The Globe and Mail with litigation
with respect to the same article, and the Globe apologized to him
immediately.  The Respondent submits that the disparity of
treatment accorded to DeGasperis caused added harm to him and
that the trial judge erred in failing to consider that as a
factor aggravating general damages.
[75] In my view, the trial judge correctly dismissed this
argument.  As pointed out by the trial judge, the policy of the
law is to encourage apologies and if accepted, the appellant’s
argument would undercut that policy.  The trial judge found that
there was no evidence of added harm to the respondent by the
publication of the apology and I see no reason to interfere with
that finding.  As the trial judge observed, there may be
situations where an apology to someone else does aggravate the
damages, but the present case does not present such a situation.
Issue 6: Should the damages be increased because of the
conduct of the appeal?
[76] The respondent submits that this court ought to increase the
damages in view of the fact that the appellants have persisted in
their attempt to justify the libel through this appeal.  In my
view this argument is without merit.  The appellants’
justification argument presented to this court rested squarely on
the proposition that the trial judge erred in his interpretation
of the legal meaning of Condition 23.  While these arguments
proved unsuccessful, they were far from frivolous.  There was a
serious issue to be argued.  This is not a case where the issue
of justification was pursued recklessly or without foundation.  I
see nothing in the conduct of the appeal that would justify this
court in increasing the respondent’s damages.
CONCLUSION
[77] For these reasons I would allow the appeal, but only to the
extent of varying the judgment by deleting paragraph 3 awarding
punitive damages.  Otherwise the appeal is dismissed.  I would
also dismiss the cross-appeal.  Although they were unsuccessful
on most issues, the appellants did achieve partial success on the
appeal and the cross-appeal was entirely unsuccessful.  In these
circumstances, the parties should bear their own costs of the
appeal.
Released: June 22, 2000
                                   “Robert J. Sharpe J.A.”
                                   “I agree R.R. McMurtry C.J.O.”
                                   “I agree S.T. Goudge J.A.”