Québec – Mafia leader’s resolution of real estate dispute qualifies as arbitration – #123

In Lalli v. Gravel, 2018 QCCS 3927, Mr. Justice Lukasz Granosik accepted that a meeting conducted by a Mafia leader to resolve opposing interests and claims between two individuals over a particular piece of real estate validly qualified as an arbitration. Though unconventional, the constituent elements of the meeting – two individuals with opposing interests or claims summoned to appear before the Mafia leader who, after having heard each, decided in favour of Plaintiff – justified characterizing the meeting as an arbitration.

The litigation stems from a March 7, 2013 broadcast of an investigative journalism report and the November 8, 2013 posting of a related article on CBC/Radio-Canada’s website. The broadcast report and the article mention Plaintiff’s association with organized crime and that a leading Mafia figure, Mr. Vito Rizzuto, would have served as arbitrator in a dispute between Plaintiff and another individual, Mr.  Tony Magi, over a piece of real estate in one of Montréal’s boroughs.

Plaintiff sued the journalist and CBC/Radio-Canada as the journalist’s employer, alleging defamation and seeking compensatory and punitive damages. Plaintiff claimed that the broadcast report and article were false and caused him harm. Granosik J.’s reasons explore whether the essence of the report and article was true, concluding that it was.

Granosik J. referred extensively to the Charbonneau Commission, formally the ‘Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry’. The Charbonneau Commission was a public inquiry created October 19, 2011 by Québec provincial government Decree 1119-2011 and chaired by its eventual namesake, Madam Justice France Charbonneau. The Charbonneau Commission was mandated, among other things, to examine the existence of activities involving collusion and corruption in the award and management of public contracts in the construction industry, including any links with the financing of political parties, and to create a profile of possible organized crime infiltration in the construction industry. It issued its Final Report November 24, 2015.

In the context of public interest and knowledge stimulated by the Charbonneau Commission, the journalist undertook an extensive investigation of facts related to a particular piece of real estate near the Montréal waterfront, 1000 de la Commune. In doing so, he learned of information related to other real estate transaction activity in Notre-Dame-de-Grâce (“N.D.G.”), one of Montréal’s boroughs. The journalist conducted further interviews, including with Plaintiff himself, along with ten (10) other sources, and reviewed documents related to those activities.

His investigation lead to the broadcast of his report and the posting of the article to the web. Plaintiff was named in the report and the article, both of which alleged that he had ‘links’ to organized crime. The report and article also mentioned that Plaintiff and Mr. Magi had a dispute over a particular piece of real estate located in N.D.G. but unrelated to 1000 de la Commune and that Mr. Rizzuto had arbitrated that dispute. Mr. Rizzuto had summoned the two to a local restaurant and settled the dispute by holding that Plaintiff did not have to do business with Mr. Magi.

As he undertook his analysis of whether the facts give rise to a valid claim of defamation, Granosik J. examined all the allegations to determine if they were true, including those regarding the arbitration by a Mafia leader. In particular, Granosik J. addresses the arbitration, mentioning it a various points in his reasons. At two points, paragraphs 60 and 74, Granosik J. sketches out the details of the arbitration in order to decide whether it qualified as a genuine arbitration and, as such, was true for the purpose of Plaintiff’s claim in defamation.

Granosik J. found that Plaintiff had received a phone call from the co-owner of the restaurant in which the arbitration was said to have taken place. The co-owner summoned Plaintiff to the restaurant in the name of Mr. Rizzuto. Plaintiff went because he did not want to disrespect the Mafia head. Plaintiff seated himself at a table with Mr. Rizzuto and Mr. Magi. Mr. Rizzuto asked Plaintiff if he wanted to partner with Mr. Magi. Plaintiff explained why he did not and Granosik J. records Plaintiff’s reasons. Granosik J.’s summary of the arbitration closes with the mention that the meeting ended with a declaration by Mr. Rizzuto concluding that it was justified that Plaintiff does not want to partner with Mr. Magi.

Granosik J. at paragraph 74 concludes that the use of the term ‘arbitration’ (“arbitrage”) to refer to the meeting with Mr. Rizzuto, Plaintiff and Mr. Magi was entirely acceptable. Plaintiff and Mr. Magi had presented themselves with opposing interests or claims, the Mafia leader heard them and decided in favour of Plaintiff, declaring that the latter did not have to partner with Mr. Magi if he did not wish to.

Granosik J. in his reasons at paragraph 91 also notes that the Charbonneau Commission also confirmed that an arbitration took place conducted by Mr. Rizzuto concerning the opposing interests of Plaintiff and Mr. Magi.

The reasons focus on the law of defamation in Québec. Granosik J. cites the key legislative provisions, namely article 1457 of Québec’s Civil Code of Québec, CQLR c CCQ-1991 (“C.C.Q.”) and that CBC/Radio-Canada was responsible for its employee’s work product under article 1463 C.C.Q. He mentions of relevant articles such as Québec’s Charter of Human Rights and Freedoms, CQLR c C-12 and the leading cases familiar to those practicing defamation law. Those include Madam Justice L’Heureux-Dubé’s articulate dissent in MacDonald v. City of Montreal, [1986] 1 SCR 460, 1986 CanLII 65 in which she, at para. 154 stated the distinction between “rights” and “freedoms” as well as Bou Malhab v. Diffusion Métromédia CMR inc., [2011] 1 SCR 214, 2011 SCC 9 paras 22-32, Prud’homme v. Prud’homme, [2002] 4 SCR 663, 2002 SCC 85 paras 36-37 and the more recent Guimont v. Lamarche, 2018 QCCA 828 paras 14-18.

The reasons, at paragraphs 41-48, also contain useful analysis on the issues of admissibility and probative weight of experts. Applying that analysis, Granosik J. accepted that Defendants’ expert, a former employer of CBC/Radio-Canada, qualified as an expert but lacked adequate impartiality given that he had only recently left its employ. Despite its admissibility and the apparent effort that went into the expert report, Granosik J. gave Defendants’ expert’s testimony no weight.

Granosik J. dismissed the action with costs except for Defendants’ expert.