Part published on 01/01/70
The condominium corporation had commenced a Court action against the developer and others involved in the original construction, seeking damages for various alleged deficiencies and other matters relating to the development.
The condominium corporation had commenced a Court action against the developer and others involved in the original construction, seeking damages for various alleged deficiencies and other matters relating to the development.
The condominium corporation published newsletters containing statements about the developer (Starwood).
Starwood asserted a claim for trade defamation allegedly flowing from the statements made in the newsletters. Starwood asserted the claim against three of the condominium’s Directors and a further party who was involved in preparation of the newsletters.
The Defendants in the defamation claim brought a motion to dismiss the claim on the grounds that the action was abusive or vexatious, and was essentially designed to intimidate the condominium corporation and its Directors. The condominium Directors asserted that the statements made in the newsletters were protected by “qualified privilege”, thus preventing a claim for defamation.
[Editor’s Note: Under defamation law, corporate directors and officers are protected by “qualified privilege”. In general, this means that corporate directors and officers can report freely to the corporate members, without fear of resulting claims for defamation.]
The developer argued that the protection afforded by qualified privilege is only available if the extent and nature of the distribution does not go beyond what was required in the circumstances. The developer argued that the Board of Directors went beyond what was required in the circumstances by placing the comments in newsletters that were left in the lobby of the building and by delivering the newsletters to tenants as well as owners of the units. The developer said that the condominium corporation should have communicated these matters only to the owners and in the form of legal notices.
The Court said that the evidence appeared to more strongly support the arguments made by the condominium Directors (that they were entitled to claim qualified privilege in respect of the statements). However, the Court was not prepared to dismiss the developers’ defamation claims without a trial, because the Court could not conclude that “it is clear that the claim for defamation related to these statements will not succeed”.