Executive Summary: Key Legal and Evidentiary Issues

• Central to this case was whether a CTV News Broadcast and related online postings about Tien Lung Taekwon-Do Club were defamatory.
   
• Defendants relied on the defences of justification, fair comment, and responsible communication to answer the various imputations raised by the broadcast.
   
• Justice Jerke found that only one of three defamatory imputations — that Tien Lung misrepresented facts and was untrustworthy — was neither justified nor protected by any defence.
   
• Notice requirements under Alberta's Defamation Act were held to extend to online and social media postings, not just the television broadcast itself.
   
• Malice was alleged against the reporter and CTV but was not established on the evidence.
   
• Expert evidence on business losses was largely discounted due to confounding factors such as COVID-19 and the 2015 Alberta oil price downturn, limiting the plaintiffs' recovery to general damages.
   

Facts of the case

Authentic Southside Taekwon-Do Club and Tien Lung Taekwon-Do Club, operating together as Tien Lung, provided Taekwondo instruction at two Edmonton locations. In 2013, Jillian Haubrich enrolled her two children in the program, first on an introductory basis and then under four-year membership agreements with fixed tuition payable in monthly instalments. In early 2014, Ms. Haubrich sought to cancel her younger daughter's membership and was offered the option of transferring the remaining term to her older daughter's account for a $50 administration fee. She chose this option, but the required transfer paperwork was never signed, the fee was never paid, and monthly payments on the younger child's contract fell into arrears.

By September 2014, Ms. Haubrich advised Tien Lung she wished to withdraw both children. She was told the younger child's account first needed to be brought current, which required payment of $1,015. She paid that amount and submitted cancellation forms for both children, after which Tien Lung advised the cancellation fees would be $1,616 for the younger child and $1,832 for the older child. When those amounts went unpaid, Tien Lung treated the memberships as still active and, in December 2014, advised that the accounts were in default and that the full outstanding balance of $10,850 across both contracts was due immediately.

Following social media posts by Mr. Haubrich, CTV producer and reporter Kim Taylor prepared a "Consumer Watch" segment that aired on February 19, 2015, and was subsequently posted to the CTV Edmonton website and CTV National Facebook page. Tien Lung sued Ms. Taylor, CTV, and the Haubrichs, alleging the broadcast and postings were defamatory and caused significant reputational and financial harm.

Policy and legislative provisions at issue

The enrollment agreements provided that tuition was payable in monthly instalments "not affected by the student's training schedule and/or attendance," and that a student's failure to complete training did not relieve the payor of the obligation to pay tuition in full. Separately, "The Tien Lung Guarantee" gave members additional rights to cancel, extend, or transfer a membership under specified conditions, including a cancellation payment option tied to a percentage of the remaining contract balance.

The Defamation Act, RSA 2000, c D-7, was central to the notice issue. Section 12 applies the Act's notice provisions to actions against the proprietor or publisher of a broadcasting station or its employees. Section 13 requires a plaintiff to give written notice of intention to sue within three months of the defamatory matter coming to their notice, specifying the matter complained of. The Court had to determine whether these notice requirements extended to online and social media republication of a broadcast, and whether notice given to CTV was sufficient to bind its employee, Ms. Taylor, individually.

Reasoning and analysis

The Court applied the established three-part test for defamation: that the words referred to the plaintiff, were published to a third party, and were defamatory in the sense of tending to lower the plaintiff's reputation in the eyes of a reasonable person. Justice Jerke found the broadcast and postings satisfied all three elements and identified three defamatory imputations arising from the broadcast: that Tien Lung charged excessive or unreasonable cancellation amounts, that it aggressively pursued non-paying customers while charging high interest, and that it did not honour its own representations and was untrustworthy.

On the defence of justification, the Court found the imputation that Tien Lung aggressively pursues customers who do not pay, while insisting on high interest rates, was substantially true and therefore justified. The imputation that Tien Lung charged excessive or unreasonable cancellation amounts was found to be fair comment, since it was based on true facts, was recognizable as opinion, and could honestly be held by a reasonable person on the proven facts. However, the imputation that Tien Lung misrepresented facts and was untrustworthy was found untrue: while each individual statement in the broadcast was factually accurate, the sequence and omissions in the presentation created a false overall impression. This imputation was not justified, and the associated fair comment defence failed for the same reason.

On malice, the Court held that although the Plaintiffs alleged the reporter acted with reckless indifference to the truth, the evidence did not establish that Ms. Taylor or CTV published the material for the dominant purpose of injuring the Plaintiffs, and the claim of malice therefore failed. The Court also rejected the defence of responsible communication for the untrue imputation, finding that the Defendants failed to exercise sufficient diligence to verify the sequence of events before publication.

On notice, the Court held that the Defamation Act's notice requirements applied equally to online and social media publications, not merely the original television broadcast, reasoning that legislation must be interpreted to keep pace with technological change. The Court further found that although the notice letter did not name Ms. Taylor individually, she had sufficient knowledge of the complaint and Tien Lung's intention to pursue a claim that substantial compliance with the notice requirement was satisfied as to her personally, and as to both plaintiff entities.

On damages, the Court reviewed expert evidence estimating economic losses between roughly $2.4 million and $3.1 million for the period following the broadcast. This evidence was substantially discounted because of confounding factors, including pre-existing negative online reviews, a widely circulated Reddit post predating the broadcast, and the 2015 collapse in Alberta oil prices, which independently affected discretionary consumer spending. The Court found the Plaintiffs had not proven, on the balance of probabilities, that any specific economic loss was caused by the single defamatory imputation that survived the Defendants' defences.

Ruling and overall outcome

Justice Jerke concluded that Tien Lung, as the successful party on the defamation claim, had proven that the imputation suggesting it misrepresented facts and was untrustworthy was defamatory and not protected by any defence raised by the Defendants. However, the Plaintiffs failed to prove a specific economic loss attributable to this imputation and failed to establish malice sufficient to support punitive damages, which were dismissed. The Court assessed general damages at $250,000 to compensate for harm to the Plaintiffs' reputation and goodwill, finding this amount adequate given that the defamatory sting was only one part of a broader broadcast, most of which was found to be true, justified, or fair comment, and that other factors independently contributed to the reputational and financial harm the Plaintiffs experienced. Judgment was entered against the Defendants in the amount of $250,000, plus pre-judgment interest under the Judgment Interest Act, with costs to be addressed separately if not agreed upon by the parties.