In Motoretta v. Twist & Go Power Sports, the Plaintiff and Defendant are two rival GTA scooter stores, engaged in what the Judge called the “Toronto Scooter Wars”. The Defendant’s Vespa dealership was terminated by the Canadian Vespa distributor. The Plaintiff remained an authorized Vespa dealer. The Plaintiff was suspicious that the Defendant had “bad-mouthed” it to customers on an ongoing basis. In response, the Plaintiff hired private investigators to pose as customers at the Defendant’s store. The private investigators recorded their conversations with the Defendant, which the Plaintiff alleged were defamatory.
The Plaintiff scooter store brought an action for damages for defamation, and for a permanent injunction prohibiting the Defendant from further defaming the Plaintiff. The action was determined by summary judgment.
The Judge found that the Defendant’s statements to the private investigators had defamed the Plaintiff. The Defendant argued that the statements did not meet the legal test of defamation because they were not “published” – i.e. they were not communicated to at least one person other than the Plaintiff. The Defendant argued that the private investigators were “agents” of the Plaintiff. The Judge disagreed, stating that an “agent” has to be an “alter ego” of the Defendant; someone who both parties understand is acting for the Plaintiff, such as a lawyer or executive assistant. The Private investigators were not “alter egos” because they do not present themselves as agents of the Plaintiff.
The Judge refused to order a permanent injunction, stating that damages would likely deter the Defendant from defaming the Plaintiff in the future. The Judge ordered that the Defendant pay $10,000 in damages to the Plaintiff. More substantial than damages was the potential costs award; the Judge stated that the Plaintiff ought to be awarded three quarters of its partial indemnity costs of $110,000 (but reserved the decision on costs).
If you require legal advice regarding defamation claims, please contact us for an initial consultation.
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