Manitoba Daily

Friday, January 28, 2022

In a defamation case, a judge ordered CBC to pay nearly $1.7 million

In a defamation case, a judge ordered the CBC to pay nearly $1.7 million

Key takeaways:

  • A Manitoba judge ordered the CBC to pay nearly $1.7 million in damages after determining that its coverage of an investment adviser was defamatory.
  • Rempel noted that Muzik and Worthington had differing recollections of what was said at their meetings at trial. 

After determining that the CBC’s coverage of an investment adviser was defamatory, a Manitoba judge ordered the broadcaster to pay nearly $1.7 million in damages to the man.

In a Dec. 15 ruling, Court of Queen’s Bench Justice Herbert Rempel stated that a television and online story about Kenneth Wayne Muzik had a negative impact on the adviser’s personal life and ability to earn a living.

The case stems from a June 2012 television interview with William Worthington, a former client of Muzik’s. According to the decision, he “expressed profound regret” for relying on Muzik’s advice to convert the value of his $675,000 Canadian Pacific Railway pension to an investment portfolio.

According to Rempel, Worthington stated that the value of his pension had “more than half vanished” since his retirement, implying that he and his wife would be forced to sell their home and return to work to make ends meet.

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The decision also stated that Muzik had inflated Worthington’s income level in his file to justify higher-risk investments. The adviser was also under strict supervision by the Manitoba Securities Commission, according to the report, and had previously been fined $15,000 for actions that were not in the public interest.

The decision names Gosia Sawicka, a former reporter for the public broadcaster, as a defendant. Before the judge-only trial began in 2019, Muzik dropped the charges against Worthington and two other CBC employees.

In his decision, Rempel noted that Muzik and Worthington had differing recollections of what was said at their meetings at trial. Still, the judge said he found Muzik’s evidence more reliable and Worthington’s evidence to be at times untruthful.

The judge stated that he believes Worthington and his wife, Leslie Worthington, went public with their story to generate negative publicity to obtain a settlement from National Bank Financial, where Muzik worked at the time of Worthington’s investment.

Encrypted recording

According to the decision, the couple devised a plan to have Muzik admit to unethical conduct on a secret audio recording of a two-hour meeting with him.

Snippets of that conversation were later shared with Sawicka and used in coverage of the Worthington story, but not the entire recording. According to the couple, the recording device was later lost when the couple moved houses.

Rempel said the Worthingtons’ evidence about the device “defies belief” and that he believes “disclosure of the entire audio recording would have been damaging to the Worthingtons’ narrative” that Muzik deceived them.

According to the judge, the stories about Muzik failed to mention that the couple withheld the majority of the secret audio recording or that the Worthingtons later claimed it was lost.

Judge orders CBC to pay nearly $1.7M in defamation case
In a defamation case, a judge ordered the CBC to pay nearly $1.7 million. image from CBC

“This was not only a breach of… [CBC’s] own journalistic standards, but it also represented the pinnacle of irresponsibility at a time when Mr. Muzik’s professional reputation was on the line,” Rempel wrote.

The stories also failed to mention that the couple decided to sell their home to live with Leslie Worthington’s mother as caregivers or that William Worthington had not returned to work when the first story aired, according to the decision.

The decision also stated that the 2011 bear market had a negative impact on Worthington’s stock portfolio. He did, however, withdraw more than $290,000 from the portfolio as a whole.

According to the judge, Worthington had deviated from Muzik’s investment plan by taking out larger-than-expected monthly withdrawals, as well as some extra funds for a vacation, a relative’s loan, and house repairs.

Sawicka described the stories’ focus as cautionary tales about the dangers of commuting pensions. Still, Rempel wrote that an objective public member would interpret them as an attack on Muzik’s integrity.

Investigations conducted previously

While Sawicka reported that the Manitoba Securities Commission reprimanded Muzik in 2011 as part of a settlement agreement in which he had to pay $15,000, the decision stated that the amount was described as a “voluntary payment to the Minister of Finance” rather than a fine.

According to Rempel, the broadcaster also failed to report on the findings of an investigation by the Mutual Fund Dealers Association of Canada, which resulted in a warning letter.

While Muzik misrepresented or failed to explain the risks and features of commuting a pension for 17 clients, including the Worthingtons, the association said it would not initiate formal disciplinary proceedings against the adviser.

According to the judge, Muzik had proven that the words in the news stories about him were defamatory. According to the decision, the onus was shifted to the CBC to raise a defense — either fair comment, justification, qualified privilege, or public interest responsible communication — to avoid liability.

Rempel wrote that the broadcaster withdrew its qualified privilege defense at the start of the trial and could not prove any of the other available defenses.

Source: CBC News

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