Delgratia ex Ager lawyer heading back to court
2003-04-29 19:48 ET - Street Wire
Also Street Wire (U-CENMF) Central Minera Corp
HIGH NOON
by Lee M. Webb
Charles Ager's lawyer David Lunny is heading back to court to show a judge an April 22 Stockwatch article. According to Mr. Lunny, the article reporting on the trial of Mr. Ager's libel suit against Stockwatch maliciously defamed his client and aggravated the alleged damage to his reputation. Mr. Ager, who headed Delgratia Mining Corp. as it imploded in the 1997 Josh salting scandal, claims that he was libelled in Stockwatch articles published in early 2000.
Represented by Mr. Lunny of Devlin Jensen, Mr. Ager launched the libel suit against Stockwatch, editor John Woods and reporter Brent Mudry in the Supreme Court of British Columbia on March 2, 2000. The Stockwatch defendants represented by Robert Breivik of Skwarok & Breivik deny the substantive allegations.
Stockwatch has provided extensive coverage of the 12-day trial before Mr. Justice Duncan Shaw of the B.C. Supreme Court that began on March 31 and wrapped up on April 16. Mr. Lunny introduced several Stockwatch reports of the proceedings while cross-examining Mr. Woods, telling the court that the articles contained numerous instances of slanted editorial comment that were gratuitously insulting to Mr. Ager and "grossly insulting to plaintiff's counsel."
On April 17, Mr. Lunny faxed a letter to Mr. Breivik warning Stockwatch against reporting on certain matters raised during the defence lawyer's closing argument.
"This will confirm that, following your closing argument yesterday, we put on record our dismay at what seemed to us to be new libels and aspersions unfairly cast against our client in the body of your final submissions," Mr. Ager's lawyer wrote to Mr. Breivik.
"Given the nature of Stockwatch's trial coverage to date, we hereby notify you that all further coverage will be reviewed with great care to ascertain whether any such defamatory matters as were contained in your closing submissions are published publicly under the guise of an absolute or qualified privilege," Mr. Lunny continued. "If they are, please be assured that we apply to further attend before the Court to tender such coverage and a copy of this letter as yet further evidence of malice."
Evidently Mr. Breivik's final submissions regarding causation with respect to Mr. Ager's allegedly damaged reputation were of particular concern to Mr. Lunny.
In Stockwatch's further amended statement of defence, the defendants claimed "that publication of the complained of words did not cause any damage to the professional and business reputation of the Plaintiff as alleged." Mr. Breivik also addressed the matter of causation of damages in his opening statement delivered on March 31.
"The Defendants will argue that most if not all of the damage to the Plaintiff's reputation arose out of the circumstances whereby the Plaintiff found himself squarely in the middle of one of the largest mining frauds in Canadian history, perhaps through no fault of his own, but most certainly through no fault of the Defendants," Mr. Breivik said in his March 31 opening statement.
Stockwatch's lawyer took up the subject of causation in more detail in his closing argument. "In the spring of 1997 Dr. Ager found himself inextricably linked and associated with one of the worst mining scandals in Canadian history," Mr. Breivik stated. "Dr. Ager was Delgratia's leader. He was its President and the Chairman of the Board of Directors. Dr. Ager was in charge of the exploration and drill program.
"There can be no doubt that Dr. Ager suffered deeply-felt shock, embarrassment, humiliation and disgrace. Loss of reputation can obviously be more pronounced if a person enjoys an excellent reputation, as Dr. Ager did.
"Dr. Ager and Mrs. Ager forcefully assert the distinction that the Delgratia salt job scandal was an attack on the Josh property, whereas the words complained of were an attack on Dr. Ager personally. The question before this Court on this issue is whether this distinction has merit. The Defendants say that it does not."
Mr. Breivik called the court's attention to "highly damaging" media reports highlighting some of the questions that were being asked in the wake of the collapse of Delgratia in the 1997 Josh salting scandal.
"In addition to the media coverage, there were also pleadings in Canadian and American class-action lawsuits in the public domain in which multiple allegations of fraud were raised against Dr. Ager," Mr. Breivik continued. "As with all of the information that was in the public domain in the spring and summer of 1997, Stockwatch had nothing to do with it."
Mr. Breivik went on to suggest a number of factors that readers would have taken into account that would have caused damage to Mr. Ager's reputation in the wake of the salting scandal. Among other things, Stockwatch's lawyer told the court that Mr. Ager "chose to not disclose the fact that Delgratia was employing a secret proprietary technology, that was essentially experimental, to test for gold"; company news releases under Mr. Ager's signature "referred to fire assays with no accompanying explanation that although conventional fire assays were employed, the sample preparation was anything but conventional"; and Mr. Ager "decided to use Mr. (Robert) Gunnison and his facility and continued to do so even after it came to his attention that Mr. Gunnison had been convicted of a criminal offence that might have involved personal integrity."
Mr. Breivik also said that Mr. Ager "chose not to discontinue the testing of drill samples, or at least the announcement of the results of such tests, when he was advised by David Comacho that samples employed in the Mountford & Beattie audit were testing negative"; when the Delgratia scandal erupted, Mr. Ager, the company's president and chairman, "retreated into an assertion that he was 'just the technical guy'"; he "never accepted any responsibility"; he "allowed his passion for experimental science to colour his objectivity and thereby exposed Delgratia and its shareholders to unnecessary risks"; and he "was overly promotional."
Following Mr. Breivik's closing argument on April 16, Mr. Lunny registered his particular "dismay" with the Stockwatch lawyer's comments regarding causation. "My lord, I have to say that under the guise of their heading 'Causation' in this case, the defendants have, in fact, chosen to make allegations before this court which are nothing less than new libels against Dr. Ager," Mr. Lunny said.
"Now, the contents of paragraph 39 of my friend's argument we say constitutes a new and colossal attack upon Dr. Ager, suggesting without a shred of evidence, in my submission that the public had 'judged' Dr. Ager and his peers had judged Dr. Ager upon the basis of unproven and libellous allegations now made in this court," Mr. Lunny subsequently said.
Mr. Ager's lawyer followed up his court-registered dismay with his faxed April 17 pre-emptive editing effort. After giving due consideration to Mr. Lunny's warning, Stockwatch published a report of that aspect of the proceedings on April 22.
Within a few hours of the publication of the April 22 Stockwatch article, Mr. Lunny faxed another letter to Mr. Breivik, enclosing a draft copy of a letter to B.C. Supreme Court trial coordinator Sue Smolen.
"Please find enclosed a draft copy of a letter that we intend to send to the Trial Registry this morning," Mr. Lunny wrote in a fax sent at 10:35 a.m.
"Please provide us with any comments that you may have with respect thereto," Mr. Ager's lawyer continued. "We respectfully request that you do so forthwith, failing which our letter will be sent to Ms. Smolen by noon."
Mr. Lunny's letter to Ms. Smolen was a request to bring his April 17 warning letter and Stockwatch's April 22 article to the attention of Judge Shaw for his consideration of the plaintiff's request to make additional submissions with respect to the issue of malice.
"In this case, after this trial had concluded, the Defendants, we submit, published further defamatory statements regarding our client, in the guise of privilege, thereby evidencing malice and aggravating damages," Mr. Lunny wrote.
Stockwatch's lawyer did not have any comments to offer Mr. Lunny with respect to his April 22 fax. Mr. Ager's lawyer sent his letter enclosing the April 22 Stockwatch article to the trial coordinator after the indicated noon deadline.
A hearing before Judge Shaw regarding Mr. Lunny's allegations with respect to the April 22 Stockwatch article is scheduled for May 6.
(With files from Stockwatch's Breeonne Baxter.)
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding Mr. Ager's lawsuit against Stockwatch is available in articles published on March 31; and April 1, 2, 7, 8, 10, 11, 14, 15, 16, 17, 22 and 23, 2003, under the symbols DELGF and CENMF.) |
