by Mike Caswell
The directors of Redcorp Ventures Ltd., a now-defunct Toronto Stock Exchange listing, have successfully fended off a defamation lawsuit they faced in the Supreme Court of British Columbia over a news release that accused a contractor of negligence. A judge has summarily dismissed the suit, finding that the party responsible for the news release should be Redcorp, and not its directors. He also found that the release was protected by the defamation defence of qualified privilege.
The dispute stemmed from a news item that Redcorp issued on May 8, 2008, in which it announced that it was facing a lawsuit after it fired a contractor, Merit Consultants International Inc. The release briefly provided Redcorp's response to the suit, stating that Redcorp had terminated the contract "due to dissatisfaction over the performance of Merit's services." The release also stated that Redcorp planned to countersue Merit for negligence.
Merit viewed the release as defamatory. It sued Redcorp's directors on June 23, 2009, claiming that the directors, in their personal capacities, had caused the company to issue the release. The defamation claim, in the words of the judge, was based on the theory that "alleging 'negligence' in
the calling of a professional engineer is a serious attack on reputation."