Date: 20000307
Docket No: C.A. 162021
NOVA SCOTIA COURT OF APPEAL
[Cite as: Coltsfoot Publishing Co. Ltd. v. Earle, 2000 NSCA 39]
BETWEEN:
COLTSFOOT PUBLISHING COMPANY )
LIMITED and DAVID BENTLEY ) Alan V. Parish, Q.C.
) for the Applicants/Appellants
Applicants/ )
Appellants )
)
- and - )
) David G. Coles
) for the Respondent
GORDON EARLE )
)
Respondent ) Application Heard:
) March 2, 2000
)
)
) Decision Delivered:
) March 7, 2000
)
)
)
)
)
)
)
)
BEFORE THE HONOURABLE CHIEF JUSTICE GLUBE, IN CHAMBERS
GLUBE, C.J.N.S.: (IN CHAMBERS)
[1] During three and one-half days in February 2000, Justice Linda Lee Oland presided with a jury over a defamation trial brought by Gordon Earle, M.P. There were only two witnesses: Mr. Earle, the plaintiff (now respondent), and David Bentley, a defendant (now an appellant). The other defendant/appellant is Coltsfoot Publishing Company Limited, the publisher of Atlantic Canada Frank (Frank) magazine every two weeks. Mr. Bentley is a founder and editor manager of Frank.
[2] In April 1996, Frank published an article about Mr. Earle when he was still employed by the province of Nova Scotia. In February 2000, the jury found the following:
the impugned words of the article were defamatory of the plaintiff;
the defendants acted with malice; and
the published apology in the July 9, 1996 edition of Frank did not comply with the Statute (Defamation Act) so as to mitigate damages.
The defendants were jointly and severally liable for:
general damages $20,000.00
aggravated damages $10,000.00
punitive damages $30,000.00
[3] In an order dated February 18, 2000, Justice Oland ordered the defendants, jointly and severally, to pay the amount of $60,000.00 with pre-judgment interest payable at the rate of two and one-half (2 1/2) percent per annum, commencing April 9, 1996 and $7,000.00 in costs plus disbursements.
[4] On February 21, the defendants filed a notice of appeal with 15 specific grounds of appeal.
[5] To date, the appellants have paid the general damages plus interest and the award of costs. Upon receipt of the taxing master’s decision, they indicated they will be paying the disbursements.
[6] On February 24, 2000, the appellants filed an application for a stay of the payment of the aggravated and punitive damages pending appeal pursuant to Civil Procedure Rule 62.10(2).
[7] In Nova Scotia, the filing of a notice of appeal does not stay the execution of the judgment under appeal. (CPR 62.10(1).)
[8] It is accepted by the parties that Fulton Insurance Agencies Ltd. v. Purdy (1990), 100 N.S.R. (2d) 341 (N.S.C.A.), which sets out two alternative grounds for granting a stay, is the law to be applied. The first ground consists of three parts. The applicant must show:
1. that there is an arguable issue raised on appeal;
2. that there will be irreparable harm (to the appellant) if the stay is not granted, and
3. that the balance of convenience weighs in favour of granting the stay.
[9] The appellants do not rely upon this ground. They rely upon the second ground from Fulton which states:
... or:
(2) failing to meet the primary test, satisfy the Court that there are exceptional circumstances that would make it fit and just that the stay be granted in the case.
[10] Although relying on this second ground, both sides reviewed their position on the grounds of appeal because unless there is an arguable issue on appeal, it would not be “fit and just” to grant a stay.
[11] The respondent does not concede that the appellants have raised any arguable issues. With due deference to this position, I find there are arguable issues. It is not for the Chambers judge on a stay application to rule definitively on any of the grounds of appeal. In my opinion, there are at least several issues raised which are arguable, such as, whether or not the second apology was admissible in evidence; whether or not the first apology could be used by the jury to mitigate the damages without specifically pleading mitigation; and whether or not the trial judge should have instructed the jury on the use of the apology to mitigate the damages notwithstanding their finding that it did not comply with the Defamation Act. The appellants referred in argument to other grounds of appeal as a basis for this stay, such as the ruling against admitting the press release to prove the truth of the facts needed for the defence of fair comment.
[12] Having found an arguable issue, it is unnecessary to refer to all the other grounds of appeal.
[13] On the second ground, as set out in Fulton, the appellants bear the onus of satisfying the court that there are exceptional circumstances making it fit and just to grant a stay. The appellants rely upon the following as exceptional circumstances:
1. As the general damages have been paid, Mr. Earle has been fully compensated pending the appeal.
2. As the total of the aggravated and punitive damages awarded were twice the general damages, they are more than minor and constitute exceptional circumstances. Considering the short length of the trial with only two witnesses, the award of general damages was substantial and the court should follow the decision of Cromwell, J.A. in Hiltz and Seamone Co. v. Nova Scotia (Attorney General) et al. (1998) 167 N.S.R. (2d) 353 where he granted a stay of punitive damages (there were no aggravated damages awarded) after finding there were exceptional circumstances.
3. Aggravated and punitive damages arise out of the conduct of the appellant and an apology or apologies should have greatly impacted the award. However, as the second apology was excluded and there were no instructions allowing the use of the apology for mitigation, it would be unfair to require payment until that is resolved by the appeal.
4. Mr. Earle will not suffer any financial harm or hardship by non-payment of the aggravated and punitive awards as he has been compensated and his employment and income are secure.
5. Finally, in argument, the appellants refer to the fact that in Ontario, an appeal effects a stay and there is a view - legislative or judicial - that parties should not be penalized too much until the appeal has been heard and determined.
[14] The appellants seek to stay the award of aggravated and punitive damages. Aggravated damages are awarded to deal with enhanced or increased mental distress, humiliation and the like. In spite of the appellants’ argument that these damages are partially punitive and duplicate general damages, aggravated damages continue to be classed as compensatory in the case law and continue to be damages which may be awarded for defamation. As such, even if I were to grant a stay, it would not include the aggravated damage award. (See Hill v. Church of Scientology of Toronto (1995), 184 N.R.I. at 98 and The Law of Defamation in Canada, 2d (ed), vol. 3, by Raymond E. Brown, 25-18 et seq. concerning aggravated damages.)
[15] In the Fulton case, the exceptional circumstances were that the judgment resulted from a summary proceeding, not a trial; the counter-claim and set-off had not yet been adjudicated, thus, execution on the summary judgment was premature; and there was an arguable issue arising out of the granting of the summary judgment. The appellants have not raised as exceptional any grounds of a similar nature.
[16] The appellants rely heavily on Hiltz and Seamone, supra. In that case, following an 18 day trial, defamation was found against the Province and an individual. The trial judge awarded general damages of $200,000.00 against both defendants and awarded an additional $100,000.00 against the Province for punitive damages. Although the stay was refused for the general damage award, it was granted for the award of punitive damages. After finding no basis for a stay on the primary three part test in Fulton, Justice Cromwell went on to the second test. He ordered the general damages (compensatory) paid and stated:
[12] Different consideration come into play with respect to the award of punitive damages. Such damages are not awarded to compensate the successful plaintiff for any loss suffered, but rather to punish and deter the defendant’s wrongful conduct. Simply put, punitive damages are not awarded primarily because the plaintiff should receive them but mainly because the defendant ought to pay them. That being the case, it seems to me that the rationale for the general rule that judgment should be enforceable pending appeal is considerably weaker as regards awards of punitive damages. This consideration is particularly significant in a case such as this in which the respondent Hiltz and Seamone Company Limited has received a significant compensatory award and where, as here, there is no evidence that non-payment of the punitive damages pending appeal will cause the respondent any irreparable harm or hardship.
[13] I am satisfied, in light of these factors, that exceptional circumstances exist which make it fit and just to suspend payment of the punitive damages portion of the trial judge’s award as regards Her Majesty the Queen in Right of the Province of Nova Scotia. In reaching this conclusion, I do not wish to suggest that an award of punitive damages should, of itself, necessarily be considered an exceptional circumstance justifying a stay of such an order. I base my decision on all of the circumstances which I have outlined.
(emphasis added)
[17] It is clear that Justice Cromwell was negating the position that an award of punitive damages would always be considered an exceptional circumstance. In Hiltz and Seamone, the award of general damages was very large. The amounts of the awards to Mr. Earle are really not comparable to those in Hiltz and Seamone.
[18] In Hiltz and Seamone, there was no question that if the Province was unsuccessful on the appeal, the punitive damages would be paid. The onus is on the appellants to show that one or both appellants could pay the award if their appeal is unsuccessful. They have not provided any evidence to that effect on this application.
[19] In my opinion, the appellants are trying to equate an arguable issue with exceptional circumstances. Every case on appeal requires an arguable issue, otherwise the respondent would be seeking to strike the appeal on the grounds that it was frivolous, vexatious or without merit.
[20] I do not propose to go through the other arguments raised by the respondent because I find that none of the arguments put forward by the appellants, either individually or together, amount to exceptional circumstances.
[21] The application for a stay is dismissed.
[22] In his written submission, the respondent requested costs payable forthwith on an increased scale pursuant to CPR 63.04 and 63.15. This was not argued at the time of the hearing of this application. I find there is no basis for awarding increased costs.
[23] I award costs to the respondent in any event of the appeal to be fixed by the appeal panel. As this appeal has not yet been set down pending the preparation of the transcript, if for any reason the appeal is not perfected, counsel may return before me to fix the amount of costs.
Glube, C.J.N.S.