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Trial needed for $125M Bondfield libel suit against Globe, court says

TORONTO — A construction company’s $125-million defamation lawsuit against the Globe and Mail newspaper should be decided at trial in a case that highlights the importance of solid journalism even when an expose potentially causes damage to the subject, Ontario’s top court has ruled.

The decision by the Court of Appeal sets aside an earlier ruling that dismissed Bondfield Construction’s lawsuit pre-trial and ordered the company to pay the paper $500,000 in legal costs.

While both sides have legitimate arguments, the court said, the Bondfield libel action cannot be said to amount to an effort to silence public interest reporting — usually referred to as strategic litigation against public participation or a SLAPP suit.

“Unlike SLAPP suits which reek of the plaintiff’s improper motives, claims of phantom harm, and bullying tactics, this litigation smells of a genuine controversy,” the Appeal Court said. “It should be tried on its merits.”

The case arose out of five news stories the Globe ran between September 2015 and February 2016 about Bondfield’s successful bid on a $300-million contract to build a new critical care facility at St. Michael’s Hospital in downtown Toronto.

The articles described an undisclosed commercial connection between the company’s top executive, John Aquino, and a senior hospital executive, Vas Georgiou, who the paper said had admitted in 2011 to creating false invoices used in a kickback scheme at York University. The Globe described the link as “casting doubt on the fairness” of the bidding process.

Bondfield sued the Globe. While the company did not dispute the accuracy of the stories, it did argue the paper had falsely alleged a “corrupt connection” between Aquino and Georgiou that led to Bondfield’s winning the St. Mike’s contract, court records show.

The newspaper countered it had done nothing wrong and sought to have the action dismissed without a trial on the basis that Bondfield was indulging in a SLAPP suit — simply trying to shut down reporting on a matter of significant public interest.

In a ruling in March 2018, Superior Court Justice Ed Morgan found “substantial merit” to Bondfield’s claim.

“The average Globe reader would almost inevitably conclude that Georgiou was a fraudster who undermined the fairness and integrity of the (St. Michael’s) procurement process,” Morgan said. “The reader would further conclude that Bondfield had won its bid as a result of its relationship and collusion with Georgiou.”

At the same time, Morgan tossed Bondfield’s action and awarded the paper its hefty legal costs. Despite his concerns the paper had “skewed the message” of the stories, Morgan ruled the Globe could rely on a valid defence of “fair comment” — which requires among other things that the articles are on a matter of public interest, factual, and not the result of malice.

On appeal, Bondfield maintained that Morgan had misinterpreted the applicable law, especially in light of Appeal Court rulings that followed the judge’s ruling. In response, the Globe argued Morgan had essentially gotten it right.

In its analysis, the appellate court said Bondfield had no history of using or threatening litigation to silence its critics. It also noted the “very real public benefit” to this kind of investigative reporting. No evidence exists to suggest the Globe was malicious, faked any part of the news or indulged in gratuitous personal attacks, the court said.

“Bondfield made out a formidable case of significant harm suffered or likely to be suffered as a result of the articles — should they be found to be defamatory,” the Appeal Court said. “There is, however, much to be said for the public interest in protecting the Globe’s freedom of expression.”

The ruling also sets aside Morgan’s $500,000 award to the Globe for its legal costs.

Colin Perkel, The Canadian Press