Executive Summary: Key Legal and Evidentiary Issues

• The appeal addressed an interlocutory injunction that barred the appellants from making public statements alleging fraudulent conduct by the respondent, Neal Korlak.

• The dispute stemmed from social media posts, specifically a Facebook page, containing adverse comments and allegations of fraud against Korlak and Kings 13 Manufacturing Inc.

• The chambers justice applied the legal analysis from Peyrow v Kaklin, 2022 ABKB 823, and considered the relevant defamation defences.

• The Court of Appeal found no palpable and overriding error or misapplication of law in granting the injunction.

• The injunction was limited to prohibiting unsubstantiated allegations of fraud but did not prevent the appellants from discussing their business experiences with the respondent.

• The appeal was dismissed, and the interlocutory injunction remained in effect.

Background and facts
The appellants challenged an interlocutory injunctive order granted by the chambers justice, which barred them from making public statements alleging fraudulent conduct by the respondent, Neal Korlak. Korlak previously owned and operated a company in Ontario that was involved in a legal dispute with one of the appellants. That dispute was resolved by the Ontario Superior Court of Justice, Small Claims Court (Claim Number: SC 23-265, Written Reasons dated June 27, 2024), where the Deputy Judge found that Korlak, as agent for the company, did not engage in fraud. The company is now dissolved.

Korlak now owns and operates Kings 13 Manufacturing Inc. After the establishment of this new company, a Facebook page was created containing adverse comments about Korlak and his business. The respondent initiated a defamation claim due to this Facebook page and other public posts on social media that alleged fraudulent conduct. The application for an interlocutory injunction arose from this claim. Korlak was self-represented on appeal.

The chambers justice’s order
On February 5, 2025, the chambers justice granted the interlocutory injunction. The order required the appellants, within 14 days, to remove the Facebook page and any similar platform under their control or influence and to refrain from republishing the same. They were also enjoined from publishing statements alleging that Korlak or Kings 13 Manufacturing Inc. had committed or was committing fraud. The chambers justice stated that informing the public about the potential of losing money was different from making an unsubstantiated claim of fraud. The order allowed the appellants to discuss their business experiences but prohibited them from alleging fraud.

Arguments on appeal
The appellants argued that the chambers justice made an error of law by applying the incorrect test for granting an interlocutory injunction in defamation cases. They claimed the respondent failed to provide sufficient evidence to justify the order. The appellants accepted that the statements were defamatory but argued that the respondent’s evidence did not establish that their statements were impossible to justify or defend. The chambers justice referenced the analysis in Peyrow v Kaklin, 2022 ABKB 823, and Peterson v McNallie, 2024 ABKB 127, and stated agreement with the reasoning in those cases.

Court of Appeal’s analysis and decision
The Court of Appeal found that the chambers justice was aware of and applied the relevant legal analysis. The Court concluded there was no palpable and overriding error of fact or law, nor any misdirection or injustice in the exercise of discretion. The Court noted that interlocutory injunctions in defamation cases are fact-sensitive and only granted in exceptional circumstances, referencing Makis v Alberta Health Services, 2020 ABCA 168. The Court determined that there was sufficient evidence to justify the injunction and that the chambers justice properly considered the available defences.

The injunction was narrowly defined, prohibiting only unsubstantiated allegations of fraud, and did not bar the appellants from discussing their business transactions with the respondent. The chambers justice distinguished between permissible speech about business experiences and impermissible unsubstantiated claims of fraud.

Outcome
The appeal was dismissed. The injunction granted by the chambers justice remained in effect, requiring the appellants to remove the Facebook page and refrain from making further allegations of fraud against Korlak or Kings 13 Manufacturing Inc. No specific monetary amount was ordered or awarded in this decision.