Court orders CBC to pay almost $1.7M in investment adviser defamation case
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Hey there, time traveller!
This article was published 28/12/2021 (231 days ago), so information in it may no longer be current.
A Winnipeg investment adviser has been awarded nearly $1.7 million in damages, after a judge ruled the CBC and a former reporter defamed him in a series of decade-old news stories prompted by a disgruntled client.
Ken Muzik testified the TV and online reports had a devastating impact on his personal life and ability to earn an income for several years.
“I am satisfied that Mr. Muzik was truthful in his evidence as to how his personal and professional life spiraled out of control and that all of this was caused by the defamatory expression in the news stories,” Queen’s Bench Justice Herbert Rempel said in a written decision released earlier this month.
Rempel’s ruling included special damages of nearly $610,000 for income Muzik lost since the stories first aired in June 2012.
“I do not accept the arguments of CBC that there was no cause-and-effect relationship between the defamatory expression and the devastating deterioration of Mr. Muzik’s professional and personal life that followed almost immediately after the first broadcast,” Rempel said.
“It is far-fetched and fanciful for the CBC to argue that Mr. Muzik was the author of his own misfortune.”
The reports at issue focused on the allegations of William Worthington, a former client who claimed he commuted his $675,000 Canadian Pacific Railway pension on Muzik’s advice, converting it in 2006 to an investment plan Muzik devised, only to see it lose half its value.
The first report included allegations Muzik inflated the value of Worthington’s income in order to justify higher-risk investments that would not otherwise be permitted. CBC also reported Muzik was under supervision by the Manitoba Securities Commission after being fined $15,000 for actions contrary to the public interest.
The report suggested Worthington and his wife were being forced to sell their home to make ends meet and concluded with a comment by reporter Gosia Sawicka saying the couple were “hoping they can retire again one day.”
Links to the news stories remained available on the CBC website throughout the trial, which concluded in May.
Rempel said he found Muzik a more credible witness than Worthington, whose “memory was clouded by bitterness tied to his buyer’s remorse about an investment that did not work out the way he had hoped.”
The judge said he did not accept a claim by Worthington and his wife, Leslie, their decision to approach CBC was motivated by a desire to inform the public about the risks of commuting a defined benefit pension.
“I am satisfied on all of the evidence that their joint plan was to inflict as much negative publicity on Mr. Muzik in order to achieve a favourable financial settlement from (National Bank Financial), who had terminated its contract with Mr. Muzik not long after the first broadcast,” Rempel said.
Muzik testified at trial he informed Worthington about the risks of an economic downturn that would reduce returns and the value of his portfolio, in which case “belt-tightening” and a return to part-time work might be required, Rempel said.
“I believe Mr. Muzik offered this advice and I do not believe Mr. Worthington’s evidence that he did not hear one single cautionary word from Mr. Muzik about the potential risks inherent in a private investment plan,” Rempel said.
As the Worthingtons became increasingly dissatisfied with Muzik, they came up with a “cloak-and-dagger plan“ to have him admit his wrongdoing at a meeting in late 2011, while secretly recording the audio of their two-hour conversation, Rempel said.
Only excerpts of the conversation were provided to the CBC. At trial, the couple testified they had no memory what kind of device they used to record the conversation and it was lost when they moved houses.
“It is probable in my view that the disclosure of the entirety of the audio recording would have been damaging to the Worthingtons’ narrative that Mr. Muzik was dishonest and that he deceived them,” Rempel said.
“Since they wanted to achieve a financial settlement with (National Bank Financial), the Worthingtons had a motive to make sure evidence that did not fit their narrative as victims of Mr. Muzik disappeared.”
Prior to approaching CBC, the Worthingtons filed complaints against Muzik with National Bank Financial and the Manitoba Securities Commission, both of which were dismissed.
“The investigation by Ms. Sawicka fell below the journalistic standard that demands an objective and thorough investigation, by relying almost entirely on documentation provided by the Worthingtons and dismissing the conclusions of (National Bank Financial and Manitoba Securities Commission),” Rempel said, noting both organizations viewed any of Muzik’s conduct shortcomings as “relatively minor.”
The CBC’s reporting gave the impression the Worthingtons sold their home because of a dramatic drop in the value of their investments, when in fact they moved to become full-time caregivers to Leslie Worthington’s ailing mother, the judge said.
Also misleading was the claim the couple was “hoping they can retire again,” when William Worthington returned to work only for a short time after the first story aired.
The CBC made no mention in its initial stories it knew National Bank Financial and the Manitoba Securities Commission had dismissed the Worthingtons’ complaints or that William Worthington had expressed no dissatisfaction with Muzik prior to the bear market of 2011.
“In doing this, the CBC and Ms. Sawicka created a one-way street of information against Mr. Muzik that exclusively reflected the narrative advanced by the Worthingtons that they were victimized by Mr. Muzik,” Rempel said.
The CBC, in a story posted on its website, said it plans to appeal Rempel’s decision.
Someone once said a journalist is just a reporter in a good suit. Dean Pritchard doesn’t own a good suit. But he knows a good lawsuit.