(Orally) Q.B. A.D. 1992 No. 34 J.C.P.A. IN THE QUEEN'S BENCH JUDICIAL CENTRE OF PRINCE ALBERT BETWEEN: DELI HOLDINGS LTD., and CENTRAL BROADCASTING COMPANY LIMITED DEFENDANT J.R. Cherkewich for the plaintiff and J.P. Morrall L. J. Zatlyn, Q.C. for the defendant and H. Laing JUDGMENT SIROIS J. October 9, 1996 On the night of April 2, 1991, 12 year old girl and two juvenile boys had been roller skating at the "Wheel-A- While Family Roller Centre" (hereinafter "Roller Rink"). Shortly after the Roller Rink closed down around p.m., [C.C.] (the 12 year old girl) was sitting on curb on 17th Street close to Carpet World and across the street from the Roller Rink yard, awaiting the arrival of her mother to pick her up. Then the two juvenile offenders, [G.R.] [C.S.], jumped her she said, dragged and sexually assaulted her in that vicinity very close by. The photographs in Exhibit P-1, while very clear, do not show clearly where the victim was accosted on the curb. The practice at the defendant's radio stations (unlike that of the Daily Herald, who attend at the police station for daily briefing on the events of the previous 24 hours), is to telephone the police station early in the morning so as to report the news commencing with the six o'clock bulletin. The news director for the defendant Broadcasting Company, Lois Holcomb, has been with the station since 1990. She was responsible for all the news information aired from the station in 1991. There were eight or nine employees in her department which dealt with advertising. There is some link between news and advertising although not strong link she said. On the morning of April 4, 1991, whoever said the news that day obtained the information from the police department on the previous night's activities. The procedure used is to gather information down with pen on paper. The news story is then typed in script in presentable form to be aired. The facts have to be correct on the scripting. The original note is then destroyed. The script is kept for one or two months and destroyed usually, unless the matter in question is diarized for an ulterior date in Court. Once the matter has come to an end, no record of it is kept. In this instance, the tapes were kept for eight weeks. tape recording of all that is said in radio station in 24 hours is logger taped on big reel. Lois Holcomb recalls telephone call from Ludwig Deli on the morning of April 4th but could not recollect specifically what was said except that he was not happy that the name of his business had been connected with the sexual assault the night before. The employee who gathered the information from the police station is no longer with the radio station. However, the procedure is standard; the information is typed in the script and aired so the public knows what is happening and to keep the topic interesting. The station has the option of airing the civic street address as landmark. The police do give out the business name in reference to location at times. In this instance, Lois Holcomb said the name of the business. "Wheel-A-While" was used because that is the information that was received. This was their normal practice. Lois Holcomb verified this herself with the police after Ludwig Deli called the station late in the morning. fail to see any duty of care or breach of the same. The defendant never broadcast any other location but the one received from the police. The plaintiff Deli Holdings Ltd. is closely held family corporation. The husband and wife Ludwig and Ina Deli are the only shareholders. Two married sons are salaried employees. The company's name arises from three sources: the basic one is the Meat Market (Ludwig and his sons are meat cutters by trade), the Roller Rink, and the third source is outside contracting with SIAST. Income from the three sources is pooled and once the operating expenses are deducted, what is left is declared as bonuses and for dividends, whatever is decided with the assistance of the chartered accountant, Dennis Reishold Almer, who has done the plaintiff's accounting since 1979. The meat market and the Roller Rink occupy the same site; you enter the meat market on 18th Street on the main floor, the Roller Rink is beneath it. An eight foot chain fence surrounds the large yard leading to the Roller Rink entrance. Two German shepherds are let loose in the yard after closing. You enter and exit from the Roller Rink through the yard, the gate abutting on 17th Street West. Immediately across the street is Benjamin Todman's Carpet World. The script and logger reel having long been destroyed and it is impossible to recreate exactly what was aired by the defendant station on the morning of April 4th, but the evidence was that 12 year old girl had been sexually assaulted by two juvenile boys between the Roller Rink and Carpet World, ". behind the Roller Rink in back alley between the Roller Rink and Carpet World. Lois Holcomb recalled that the information received at the station from the police was that shortly after the Roller Rink had closed, some young people had come out of the Roller Rink and had been involved in sexual assault. Actually the police gave the name "Wheel-A-While" instead of Roller Rink. Ina Deli was in bed at home on the morning of April 4th when she received telephone call around 7:30 a.m. asking her if she had heard the news from CKBI. When she answered that she had not, she listened to the o'clock bulletin and heard that sexual assault had occurred and the Roller Rink was mentioned. Ina immediately telephoned her husband Ludwig who was busy teaching meat-cutting at the prison farm across the river. She told him to come home. Ina received another berating telephone call from an irate customer dealing with the sexual assault. Ina was very upset about this and when her husband came home, he ordered her to answer no further telephone calls. Ina was the DJ at the Rink and that constituted her main role in the family operations. She and her husband were both shocked, angry and unhappy about the incident being connected to their business. They refused to accept what had happened. She testified that business at the Rink was quiet after that. She added gratuitously, that lot of children no longer came to the Roller Rink because their parents had heard the radio broadcast, yet she could not name one parent who had stopped their children from attending the Roller Rink. Neither could her husband. In summary, there were about seven people in total who expressed concern over the newscast, either to Ludwig or to Ina. This was most unfavourable reaction by Ludwig and Ina. They imagined their world was coming apart. They blame the loss of earnings at the RollerRink on the publicity generated by the defendant. Yet the evidence is that the Indian and Metis Youth Group who came to the rink as body, did not blame the incident for cutting back on their attendance. The reason could just as well have been from reduction in funding as anything else. The defendant Ludwig agreed with this. The sexual assault victim [C.C.] said she was not deterred by the incident but that she went back to the Roller Rink again after. She did not blame the plaintiffs for what happened. The fact the attendance was down for few days after cannot be attributed to the incident. There may have been other factors at work, such as holidays, unfavourable economic conditions, levelling off of interest, and good outside weather to dissuade skaters. Besides, the tapering off season of May and June was approaching other interests abound. Figures do not lie. The plaintiffs made $12,500.00 between April and August 1991 compared to $7,000.00 in 1990 for the same months. Business in 1991 had increased not decreased in those five months. Ludwig Theodore Deli, the son, testified that the newscast he heard said that 12 year old girl was sexually assaulted by two juveniles between the Roller Rink and Carpet World. The Delis interpreted the news as stating that the sexual assault had occurred at the Roller Rink. They were absolutely wrong in this interpretation. All they wanted to hear was "Roller Rink" and they were wrong in their analysis. Benjamin Tadman, owner of Carpet World, was contacted by Ludwig about the radio newscast and told to telephone the station. (Ludwig is mistaken when he says he spoke to no one prior to calling the defendant.) After he heard the news that sexual assault had taken place in the vicinity of the Carpet World, Tadman spoke to an employee at the defendant station. He told the employee that he was concerned that his business place had been linked to some criminal activity and that would not do his commerce any good. The employee's answer was that it was necessary to graphically describe the area where the crime occurred to protect other people. Tadman asked that the station not do it again; the answer was that this was the way they would do it. Benjamin Tadman did nothing more. But not so Ludwig Deli. He telephoned the defendant station around 11:30 a.m. and asked Lois Holcomb to leave his business name out of it, that he did not pay for that advertisement. He was told that this constituted news and that it is their duty to report it. further newscast that Ludwig heard as he recalled was that 12 year old girl had been dragged in back alley between the Roller Rink and Carpet World and sexually molested. Ludwig's unhappiness with this newscast was that in reality, there was no such thing as behind the Roller Rink and that there is no back alley between the Roller Rink and Carpet World, he said. The evidence is that 12 year old girl was accosted while sitting on the curb on 17th Street West which runs between the Roller Rink yard and Tadman's Carpet World. What was described as the back alley was in reality, 17th Street West. It can be described as behind the Roller Rink because you leave through the Roller Rink property into that street. The 12 year old girl may have been dragged by the two juveniles from the curb where she sat on 17th Street West beside Tadman's, to point in the immediate vicinity where she was molested. Ludwig, on inquiring, was told by the police that sexual assault had occurred. Ludwig had no more contact with the defendant station. Instead, he sought his accountant Almer and his lawyer for advice on April 4th the same day. He wrote long letter to the CRTC on April 11th complaining about the defendant's newscast saying that it was unethical, unprofessional and very damaging to their business and their health. (vide: Exhibit P-1). The CRTC, the regulatory body for radio and television in this country wrote to the defendant on April 12th in connection with the plaintiff's concerns and the CRTC requested the defendant to retain copy of the logger tape covering the newscasts in question in accordance with s. 8(5)(b) of the Radio Regulations, 1986. The defendant did as it was requested to do. The defendant wrote to the plaintiff on May 1th regretting any embarrassment which the reporting of the incident had caused to him and members of his family. The general manager, Jim Scarrow, advised that in reporting such occurrences it had always been their policy to relate the facts precisely as provided to the station by the Prince Albert City Police Department, and that this policy was followed in this case. The descriptions and facts contained in the news item were those supplied to the station by the police. The station had to rely rigidly on information as supplied to the station by the police he said, which was always very reliable (vide: Exhibit D-15). There is no reason to doubt his evidence. On May 28th, the plaintiff's solicitor wrote to the CRTC expressing dissatisfaction with the defendant's position. It again referred to further mention of the incident "near the Roller Rink" in radio broadcast by the defendant on May 24th and requested that the tape of the broadcast be preserved. The solicitor was also requesting some financial compensation for the plaintiff for apparent losses for the month of May (vide: Exhibit P-15). The defendant's general manager, Jim Scarrow, wrote to the plaintiff's solicitor on July 17th, apologizing for any personal discomfort to Mr. Deli as result of the coverage of the news story but that occasional news coverage was necessary until the criminal process was terminated (vide: Exhibit D- 18). Nothing further was heard from the plaintiff or his solicitor by the defendant. On July 11th, the legal counsel for the CRTC wrote the defendant with respect to the complaint about the May 24th newscast at 6:30 a.m. and requested copy of the defendant's response (vide: Exhibit D-18 supra). taped copy of the broadcast in question was also requested pursuant to s. 8(6) of the Radio Regulations, 1986. On August 21st, the secretary general of CRTC, A.J. Darling, wrote to the plaintiff's solicitor referring to previous correspondence in connection with the matter and said that it was unable to conclude that the broadcast of the report in question constituted breach of the requirements of either the Broadcasting Act or the Radio Regulations, 1986. It added: "While it is indeed unfortunate that Mr. Deli's business has apparently suffered in the wake of the assault, it would appear to be factually correct that an assault is alleged to have occurred near his roller rink. Accordingly, the Commission considers that CKBI was within its rights to report the assault in the manner that you have described." It added that the Commission was without statutory jurisdiction to grant financial compensation (vide: Exhibit D-18). Furthermore, the Commission said that the tape of the May 24th broadcast was never requested from the licensee and had unfortunately been destroyed. The Commission advised the plaintiff's solicitor of its policy statement and guidelines concerning complaints and requests for tapes or transcripts of radio broadcast programs. The letter ended by statement that in view of the fact that no breach of the Act or the Regulations had occurred, the Commission did not intend to pursue the matter further. On November 1, 1991, the CRTC requested CKBI to forward to the Commission taped copies of the logger tapes of the news items aired on April and 5, 1991. The defendant replied to the CRTC on December 9, 1991, that pursuant to CRTC Regulations 8(5)(b) of 1986, the logger tapes of April and 5, 1991, had been returned to service and were not longer available (vide: part of Exhibit P-15). The next the defendant heard about the matter was when the plaintiff issued his statement of claim on January 14, 1992. There was no advance warning of this. The "paper war" that ensued, finally came to trial over four years later. The chartered accountant, Dennis Reinhold Almer, testified on behalf of the plaintiff. Another chartered accountant, David Wayne Ballantyne, with the additional expertise as business evaluator, testified on behalf of the defendant. The contest between them was far from conclusive. The many charts filed as exhibits served more to confuse the issue than to clarify facts in my estimation. These are the reasons why. Reinhold Almer testified that the losses suffered by the plaintiff between April 4, 1991 to December 31, 1992 and from January 1, 1993 to February 28, 1994, totalled $98,140.80. This figure is very misleading. He based his calculation on the attendance fee remaining at $4.50. The evidence is that the figure was far from constant, that it varied greatly from $4.50 to $2.50 at different times; stay-overs were charged as low as $1.50. This would decrease the estimated loss figure, if any. He also estimated gross profit on confectionary items at .20ï¿½. He admitted that there was really no way to ascertain that; that he had done no calculation to arrive at this figure; that he was merely told this by Ludwig Deli. Dennis Almer did not check the entries in the Blue Book (vide: Exhibit D-6) made by the son, Ludwig Theodore (Ted) Deli, with the tapes record of the sales. Entire reliance seems to have been placed on the Blue Book. The figures that appeared there did not always agree with what the tapes revealed. He testified that the Roller Rink had shown yearly drop in revenue from the time it had opened its doors in mid-October 1987. Between 1988 and 1990 there was decrease of 46% in revenue or under $10,000.00. Dennis Almer admitted under cross-examination that his projections were not done according to general accounting principles. He said he was asked to prepare "loss report" and that in doing so, while he would draw on some of the Institute guidelines, he did not have to be as specific in this instance because he had no pointed directives to follow. This seriously put his objectivity at test. When comparing the revenue between 1990 and 1991 he admitted he would be hard pressed to say that there were losses in 1991. April 1991 made more money than in April 1990. There was declining trend of 20%. In June 1990 there was no money made whereas in June 1991, $2,978.00 was realized. In August 1990 the rink was closed whereas in August 1991, the sum of $1,604.00 was made. The accountant said he did not go back to say why they made more money in 1991 than in 1990. At the end of August 1991, they had not lost any money compared to 1990. The accountant said that he had not checked the months separately; that he had looked at it in general way. The only explanation he could give for the increase in income in 1991 was that large groups had come in but he could not substantiate this. When shown the tapes compared to the figures in the Blue Book (vide: Exhibit D-6) he admitted that the attendance and figures were not the same. The figures shown in the Blue Book included groups but were not shown on tape. The plaintiffs could give no particulars about the groups. But even allowing for that, discrepancy existed. Between April and August 1990, the revenue amounted to $7,972.00. For the same months in 1991, the revenue figures were $13,792.00. Hence, there was no loss in 1991 there. David Wayne Ballantyne confirmed the variables in the roller skating industry. There are highs and lows like economic cycles in other fields of endeavour. Commencing in October 1987, the Roller Rink thereafter showed decreasing attendance. Between January 1990 and January 1991, there was an average drop in attendance of 28%. Between March 31, 1988 and March 31, 1991, there was 42% decline in skaters. In Ballantyne's opinion, it was no longer profitable to operate the Roller Rink as at March 31, 1991. While the plaintiff may not have contemplated selling this business then, it was not doing well. They even closed on Sundays. In March 1992, it was evident that the premises could be put to more profitable use in some other way. Ludwig Deli says he began in the Roller Rink business in 1978 in Prince Albert. He continued operating as such until the early 1980's when another Roller Rink opened up. His business dropped and he leased the premises to Buy- Rite for five years. He had no figures to show the results of the operations from 1978 to closing in 1982. The plaintiff operated Roller Rink in Red Deer, Alberta, for two years apparently while the Roller Rink in Prince Albert was rented out. Ludwig Deli said that the operation in Red Deer did very well but they ceased that operation when the owner wanted long term lease at an increased rental that the plaintiff was not prepared to pay. The pull-out from Red Deer occurred about 1982 or 1983. The plaintiff testified that prior to April 4, 1991, there was substantial decline in attendance at the Roller Rink; this was normal every spring he said. Since the previous October, there had been decline of about 30% the plaintiff said. He added that in the Roller Skating business, the first year of operation is high, then it slows down gradually in the second and third year. The fourth year levels out and then it starts to pick up again with new age group. This was his experience in this field he said. Whereas in 1988 when the plaintiff opened up, business had peaked, it had dropped at the start of 1991 but he was less concerned then because he did not owe anything. The downward trend experienced early in 1991 continued when the Rink re- opened in the fall and kept decreasing into 1992. The people in the same business in Regina confirmed that this was their experience as well. In 1987, extensive renovations were made to the premises after Buy-Rite left and the rink resumed operations until 1992. Then the premises were rented out again when it did not pay any more. In 1992 and 1993, Ina operated Roller Rink in Saskatoon. That property was sold to third party which was the end of that operation. The sale of merchandising realised $12,000.00 deposited in the general account. The Roller Rink property in Prince Albert was rented out again commencing at the end of February 1994. The Roller Rink re-opened again in September of this year. At no time between April 4, 1991 and January 13, 1992, when the action was commenced, did the plaintiff or his solicitor make any demand on the defendant directly to resolve the grievance. It seems that the die was cast from the time of the sexual assault. There is no doubt that the Deli family are hard- working, honourable citizens. Three families live off the three branches of the plaintiff company. It is beyond question that they ran good, clean operation at the Roller Rink. No drunks or undesirables were allowed on the premises, if and when spotted. That the plaintiff corporation runs financially successful operation, there is not doubt. The contracting arm has done extremely well since 1992 and hence the entire corporation, since understand that the income from each of the three sources is pooled as well as the expenses to arrive at the bottom line. When the newscast came on the air in the early morning of April 4th, it made Ludwig Deli very angry and upset and he got carried away; Ina Deli became distraught, they immediately misinterpreted the sexual assault as having occurred at the Roller Rink whereas that was not said at any time. They foresaw financial disaster staring them in the face, an obvious overreaction. What was done to meet the apparent crisis by the family? After consulting with the chartered accountant and their solicitor, policy of confrontation, condemnation and retribution was opted for. There was ready access to the script an the logger tape at the defendant station at that time; nothing was done to get that information from them by the plaintiff. To counter the public opinion that may have arisen from the incident, (although from the evidence have been unable to detect such public outcry) notice in the Prince Albert Daily Herald authored by Ludwig Deli or anyone of his family, praising his Roller Rink operation and how safety was its prime concern would have gone long way, feel, to counter any fear that the incident may have been born in the hearts of the patrons. Simply because an incident takes place outside of your premises, be it murder, sexual assault or whatever it may be, if you are innocent of the same, surely casts no aspersions personally. To react angrily as the plaintiffs did was very unfortunate, unwise and costly decision. Ludwig Deli testified that at closing time, skaters milled outside the gate of the Roller Rink yard, onto 17th Street and across from Tadman's Carpet World. He said once the skaters were out of his yard and he closed his gate, that he had no further responsibility for them. That is absolute correct as far as his legal obligations are concerned, but the milling crowd is still adjoining his property, 17th Street and Tadman's Carpet World. That is where it is and that is where the sexual assault took place as reported by the defendant from the information received from the Prince Albert police force. Jim Scarrow, the vice-president and general manager of the defendant corporation, has been with the station ever since he was in high school, 40 years ago. There are two radio stations one AM and the other FM. Scarrow personally, and the station, have won many accolades and honourable mentions over that span in time. He told us that this was the very first time his station was involved in litigation. Scarrow has very much hand-on approach to his operation. He answers his own calls and is very accessible to all. He works every day cellular telephone accompanies him whenever he is away from the station. Scarrow was familiar with CRTC Regulations and hefollowed these assiduously. Woe to the station that does not cooperate with the CRTC! The tapes of this broadcast in April were kept for eight weeks as requested and then returned to service when no request was made for them. When the telephone call from Ludwig Deli was received late in the morning of April 4th, his request was reviewed by the station. The defendant was concerned. But as the name received from the police was part of the event, it would stay. The defendant was merely doing its job of reporting news; there was no way they knew or ought to have known that the news that were aired would cause harm to the plaintiff or to Tadman. The information they had from the police was proven correct and it should and would be aired. They have reams of information received from the police where business names were used. The defendant was only concerned with the general vicinity as told by the police. It appears that the tape of the May 24th broadcast was never requested from the defendant by the plaintiff and it was destroyed, regretfully, due to an administrative error. The plaintiff's solicitor was advised of this on August 21st by the CRTC (vide: Exhibit D-18). Nothing that the defendant published was false,malicious, dishonest, negligent or recklessly publishedwithout careful justification, improper motive or excuse. Distinguished are Frank Flaman Wholesale Ltd. v. Firman et al. (1982), 1982 CanLII 2487 (SK QB), 20 C.C.L.T. 246 at 257-58, (1982) 1982 CanLII 2487 (SK QB), 17 Sask. R. 305 (Q.B.); Man. Free Press Co. v. Nagy (1907), 1907 CanLII 46 (SCC), 39 S.C.R. 340 at 348-9; Herrington v. British Railway Board, [1971] All E.R. 897 at 906 and Cullen v. Rice et al (1981), 15 C.C.L.T. 180 at 188. It did what it was its duty to do and was exoneratedentirely by its controlling body, the CRTC for doing so. Thedefendant published the news that it receives from the police,always a proven reliable source. Nothing points to thedefendant as being the cause for the loss of profits by theplaintiff in its Roller Rink operation. The business was on down side at the time. The sexual assault occurring where it did was not the fault of either the plaintiff or the defendant. The plaintiff may have been victim of circumstances and no more. The sexual assault if it had bearing on the immediate attendance figures is minimal. The plaintiff did nothing constructive to minimize their losses. He did no promotion whatsoever to increase attendance. I fail to see where the plaintiff has a cause ofaction against the defendant and the action stands dismissedwith costs.
A radio station reported that a 12 year old girl was dragged and sexually assaulted behind a roller rink or between the rink and a store. The owner of the rink claimed financial compensation for a subsequent decline in his business which he alleged was a direct result of the broadcast. The script and reel had been destroyed and it was impossible to recreate exactly what was aired. HELD: The action was dismissed with costs. 1)Nothing that the defendant published was false, malicious, dishonest, negligent or recklessly published without careful justification, improper motive or excuse. 2)The station followed the CRTC Regulations and was exonerated entirely by its controlling body. The defendant published the news it received from the police, a proven reliable source. 3)Nothing pointed to the defendant as being the cause for the loss of profits by the plaintiff's roller rink operation. The business was on a down side at the time. The assault occurring where it did was not the fault of either party. If it had a bearing on the immediate attendance figure it was minimal and the plaintiff did no promotion whatsoever to increase attendance.