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Farallon wins another defamation suit
2010-05-10 15:32 ET- Street Wire
by Mike Caswell
Farallon Mining Ltd. has won adefamation lawsuit against Edmonton resident Robert Butler over on-linecomments, the second victory for the company this year against anInternet poster. In an order dated March 30, 2010, Justice CatherineWedge has ordered Mr. Butler to pay $425,000 to the company and relatedparties. The decision was a victory by default, as Mr. Butler did notoppose the order.
The suit is one of three that Farallon haslaunched against forum posters since 2004. The company has won two, andone remains outstanding. The first victory came on Jan. 5, 2010, whenthe company won a default judgment against an Australian man, David St.Eloi, for posts that accused Farallon of stealing its Campo Moradoproperty in Mexico. Damages have not yet been determined in that case. Ajudge has yet to hear the third case, which is against an Edmontoncouple.
Farallon's statement of claim
Thecompany launched the suit against Mr. Butler on Oct. 5, 2004, when itfiled a statement of claim in the Supreme Court of British Columbia. Thesuit identified him as the person who wrote several posts that appearedon Stockhouse in 2003 and 2004 under the pseudonym BTaffy. They defamedFarallon as well as its management company, Hunter Dickinson Inc., andits president, Ronald Thiessen, the suit stated.
The messagesbegan in July, 2003. Farallon said most of them called the company'smanagement liars, thieves or crooks, usually in connection with theacquisition of the Campo Morado property. One, dated Nov. 10, 2003,stated that Hunter Dickinson had spent money on "crooked, illegalmanipulation of the courts in both Mexico and Nevada."
Another,dated April 2, 2004, said: "There was a lot of grease being spreadaround [in Mexico]. All of it being paid for with your hard earneddollars and spent by H&D to keep their butts out of jail." HunterDickinson took that message to mean that it had bribed Mexicanauthorities to avoid prosecution for criminal activities.
Furtherposts referred to Mr. Thiessen, stating he is part of a "house ofthieves" and that he responds to questions with lies. BTaffy continuedin a July 23, 2004, post, which called Mr. Thiessen "a poor excuse for ahuman being" and an Aug. 6, 2004, post that referred to him as a"proven and continual liar."
Farallon claimed that Mr. Butler knewthe statements were false when he made them. They were calculated todamage the reputations of Farallon, Hunter Dickinson and Mr. Thiessen,and did have the intended effects, according to the lawsuit.
OnSept. 30, 2004, Farallon's lawyer sent a registered letter to Stockhousedemanding that the posts be removed, and that the board revoke BTaffy'sposting privileges. Stockhouse quickly complied. The company's lawyeralso wrote a letter to Mr. Butler, demanding that he stop postingdefamatory information and that he apologize for his posts. In spite ofthe letter, Mr. Butler wrote another defamatory message and had aStockhouse user post it on his behalf, the suit claimed.
Farallonsought damages for libel, a permanent injunction preventing futureposts, punitive damages and costs. Keith Clark of Lang Michener LLPfiled the suit.
In a later amendment to the claim, filed on March29, 2005, Farallon also complained about an e-mail that Mr. Butler wroteon March 11, 2005, to an unidentified Stockhouse user. The messagestated that Mr. Thiessen is a "fu--king slimeball criminal" and thatFarallon "are f--king crooks!" The e-mail and the earlier postings weregrossly defamatory, according to the amendment.
Butler'sstatement of defence
Mr. Butler, in his reply to thelawsuit, denied any wrongdoing. In a statement of defence filed on June6, 2006, he said that all of his posts contained factual information andwere not defamatory. In legal terms, he relied on a defence calledjustification, which means that he sees all the information in his postsas true.
Alternatively, he said that his posts contained opinionsabout the morality or motives of the company and its management. This,he argued, means that he is protected by a defence called fair comment.He said that Farallon, being a public company, is a matter of publicinterest.
He further argued that his posts constituted a fair andaccurate report of proceedings in court, which are protected by adefence called privilege. (Some of his posts referred to court actionsin Mexico over the ownership of the Campo Morado property.) He saidthere were court documents filed in Mexico in 2004 and 2005, as well asdocuments filed in Nevada and B.C., that he referred to. He also claimedthat the police in Mexico were investigating the company, and hereserved the right to present new developments in the investigation asproof of the "damaged reputation" of Farallon.
He asked that thejudge dismiss the lawsuit, with costs. Vancouver lawyer David Donohoefiled the statement of defence on his behalf.
Applicationfor damages order
After 2006, the case was mostly dormantuntil March 16, 2010, when Farallon applied for an order settingdamages against Mr. Butler. Mr. Butler did not file any documentsopposing the order, and did not appear at a March 30, 2010, hearing todetermine the damages.
At that hearing, Judge Wedge ordered him topay $100,000 to Farallon itself; $100,000 to its management company,Hunter Dickinson Inc.; and $225,000 to Mr. Thiessen. She has alsorestrained him from publishing any defamatory statements referring toFarallon, Hunter Dickinson or Mr. Thiessen.
Other Farallonsuits against posters
The other suits came five yearsafter the case against Mr. Butler. On Sept. 1, 2009, the company suedMr. St. Eloi, who used the alias "campokid" on Stockhouse. Mr. St. Eloifailed to respond to the suit, and Farallon won a default judgmentagainst him on Jan. 5, 2010, with damages to be determined in thefuture.
The other suit, filed on Oct. 6, 2009, is against Edmontonresidents Ronald and Donna Arnold. Using the alias "Stonecut," theyaccused the company of stealing its Campo Morado property in Mexico, thesuit stated. Mr. Arnold, in his statement of defence, admitted towriting the posts, but said they were not defamatory. He asked that theclaim be dismissed. That case has not been to trial.
Hermistonv. Farallon
Mr. Arnold, in his statement of defence,referred to a court case in Mexico, in which a man named David Hermistonunsuccessfully sued Farallon over the Campo Morado property. Mr.Hermiston's suit, launched in 2004, claimed that he had been defraudedof his interest in Minera Summit de Mexico S.A. de C.V., the prior ownerof the property. He lost the case in June, 2007. He appealed thatdecision, and lost again on Feb. 6, 2009.