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COURT FILE NUMBER: COURT JUDICIAL CENTRE: PLAINTIFF(S): DEFEND ANT(S): DOCUMENT

1203 03498 COURT OF QUEEN'S BEN EDMONTON MATTHEW MEIER, RACKNINE INC. NEW DEMOCRATIC PARTY, PATRICK MARTIN, also known as PAT MARTIN STATEMENT OF DEFENCE OF THE NEW .DEMQCRAIS:.ASSOCIAIION-O^CANADA. (INCORRECTLY NAMED NEW DEMOCRATIC PARTY) Lawyers for the Defendant BERSENAS JACOBSEN CHOUEST THOMSON BLACKBURN LLP Barristers, Solicitors 33 Yonge Street Suite 201 Toronto. Ontario M5E 1G4 PETERJACOBSEN LSUC#: 17803P IOANA BALA LSUC#: 53919F Tel: 416-982-3800 Fax:416-982-3801 Address for Sendee in Edmonton REYNOLDS, MIRTH, RICHARDS & FARMER c/o Fred Kozak, Partner 3200 Manulife Place 10180-101 Street Edmonton. Alberta T5J 3W8

PARTY FILING THIS DOCUMENT ADDRESS FOR SERVICE AND CONTACT INFORMATION OF PARTY FILING THIS DOCUMENT

Statement of facts relied on 1, The Defendant incorrectly identified as the New Democratic Party, corporate name New Democrats' Association of Canada, herein after "the NDAC", has no

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knowledge of the facts pleaded at paras, 1. 2, 5. 6 and 7 of the Amended Statement of Claim, except as otherwise indicated herein. 2. 3. 4. The NDAC denies the facts pleaded at paras. 8-35 of the Amended Statement of Claim, except as otherwise indicated herein. The NDAC admits paras. 3 and 4 of the Amended Statement of Claim. The NDAC is a corporate organization. The NDAC is headed by the Leader of the Part}7. There are six officers for the party: the Leader, President, Vice President, Vice President Labour, Treasurer and National Director. The NDAC is governed by a Council. The Council is comprised of the Officers, the Executive and various representatives from the provinces and territories, national labour organizations, Caucus, and Women Commission and Youth representatives. The Executive is comprised of: ten regional representatives; one representative of the Northern Caucus; two representatives from Labour Affiliates and the Chairs of 6 Committees. It also includes one representative from the Federal caucus. The New Democratic Pactv_is_one_o£-Canadals-.lotig-staading-and-establishedpolitical parties. NDP Members of Parliament (NDP Caucus members) currently constitute the Official Opposition in Canada's federal House of Commons. NDP MPs collectively received 30.6% of the popular vote in the last federal election of May 2011. The NDP currently has approximately 131,000 members. The NDAC as a corporate entity undertakes the following main 'tasks: a. b. c. d. e. f. g. h. 7. administering party Conventions setting general party policy at party Conventions administering federal elections administering the finances of the party managing and promoting party membership managing fundraising for the party sending out party communications providing support to riding associations

5.

6.

NDP MPs are part of the NDP Caucus in the federal House of Commons. They are not part of the corporate structure of the NDAC. The NDP Caucus is a group constituted of all NDP MPs in the House of Commons. Issues and positions are debated within the NDP Caucus, independently of the NDAC. NDP MPs operate independently of the NDAC. hi particular: a. NDP MPs are remunerated by the House of Commons; b. the NDAC cannot and does not control or regulate, inter alia: i. the positions that an NDP MP takes in the House of Commons or otherwise;

8.

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ii. how an NDP MP votes on motions and bills in the House of Commons; iii. the statements that an NDP MP makes in the House of Commons or outside of the House, at any time, with respect to any social, political, economic or any other issues. 9. In this case, the NDAC absolutely denies requesting, authorizing, encouraging or otherwise suggesting directly or indirectly that the co-defendant Patrick Martin should speak on behalf of the party with respect to the "robo-call" issue and the Elections Canada investigation, and particularly to make the statements complained of in the Statement of Claim, and puts the Plaintiff to the strict proof thereof. In fact, Martin spoke and was requested to speak as a representative of the NDP Caucus. The NDAC did not have any control over the positions and statements that Martin took or made with respect to the "robo-call" issue, nor those of the NDP Caucus. The NDAC admits posting statements on its website quoted at paragraphs 13, 14, 15 and 18 ("the words complained of). The NDAC intends to rely on the entirety of the postings _as__made_Ihe these words are defamatory of the Plaintiffs or defamatory at all. The NDP pleads that it posted these statements in parallel to Martin's statements. As one of Canada's main political parties, the NDAC is entitled to and indeed has a duty to comment upon issues of public interest, as further, described below. Prior to the NDAC posting the words complained of, the "robo-call" issue had received widespread media attention in late February 2012. In particular, the following facts were widely known by the public at that time: a. Elections Canada was conducting an investigation into allegations from individuals who were known supporters of political parties other than the Conservative Party of Canada that they received misleading automated phone calls on election day in May 2011, infer alia, directing them to attend at the wrong polling station; Following the 2011 Canadian federal election, the Plaintiff RackNine Inc. ("RackNine") was contacted by Elections Canada in regards to allegations that a customer of RackNine may have used automated dialing services provided by RackNine in a manner that contravened the Elections Act; RackNine was a compan)' operating out of Edmonton Alberta, and providing services for placing automated phone calls to large numbers of people, particularly as part of political campaigns; RackNine was served with a Production Order on November 23, 2011 by an investigator of Elections Canada;

10.

11.

12,

b.

c.

d.

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e.

RackNine was in fact the company through which the misleading phone calls were placed; RackNine was a company employed by the Conservative Part}' of Canada to place automated phonecalls for political purposes; RackNine mainly worked for the Conservative Party of Canada; Mr. Meier was a supporter of the Conservative Part)' of Canada; Mr. Meier posted on his Facebook page a picture of RackNine's new servers, calling them the "Political Super Weapon".

f.

g. h. i.

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14.

The NDAC pleads that the Plaintiffs Notice regarding statements posted on its website and made by Patrick (Pat) Martin, the co-Defendant in this matter, dated Friday, February 24, 2012, only came to its attention on Monday. February 27, 2012, due to the intervening weekend. That letter did not set out a timeline or deadline for response. — — —— ' In parallel, the Plaintiffs publicly "leaked" the Notice of Libel, including to a blogger named Stephen Taylor ("Mr. Taylor"), a supporter of conservative politics. The Notice was posted on Mr. Taylor's blog. Before the NDAC had a reasonable chance to respond, the Plaintiffs proceeded to issue a Statement of Claim on March 2, 2012. The Plaintiffs' lawyers did not contact or attempt to contact the NDAC before the issuance of the Claim. In parallel, the Plaintiffs also leaked the Statement of Claim to Mr. Taylor, who also publicized the Claim on the internet. The NDAC pleads that the manner and timing of the delivery of the Notice and Statement of Claim, and the fact that there was a parallel public leak, demonstrate that the Plaintiffs had the intention of publicly embarrassing the NDAC, without providing the NDAC a true opportunity to respond. The NDAC pleads that it turned its attention to the matter as soon as was possible. The NDAC notes that the party had a leadership selection convention taking place March 22 - 24. 2012 in Toronto, Ontario, whereby a new party leader would be elected. The NDAC pleads that, as a cautionary measure, but without admitting liability, the NDAC removed the statements posted on its website as follows: a. on March 6, 2012. the NDAC removed the statements complained of at paras. 13 and 15 of the Statement of Claim. b. on March 8, 2012. the NDAC removed the statements complained of at para. 18 of the Statement of Claim.

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-5c. on March 21. 2012. the NDAC removed the statements complained of at para. 14 of the Statement of Claim. 20. Furthermore, the NDAC specifically authorized Patrick Martin, the co-defendant in this matter, to speak on its behalf and to issue an unequivocal apology to the Plaintiffs as follows: On February 23, 2012, I appeared before the national media to speak in response to the important issue of "Robocalls" in the 2011 general election. At that time I expressed my personal outrage along with the outrage of the caucus of the official opposition upon learning about the serious allegations of electoral fraud. In making my statement on February 23, 2012, I singled out a private individual, Mr. Matt Meier along with his business RackNine Inc. and I wrongfully accused them of being part of a conspiracy to commit electoral fraud. In the days following, I repeated this accusation a number of times to the media and on national television. My party, the NDP, also raised concerns about the possibility of.RackNine_Jiayang-committed-electoralfraud through postings on its website. The NDP indicated on the party website that if news reports that seemed to draw a link between the calls and RackNine were true, these activities were prohibited by the Canada Elections Act and merited investigation. I now know that the statements I made insinuating Mr. Meier's and RackNine's participation in an electoral fraud conspiracy were wholly and unequivocally false. In my rush to express my personal outrage and the outrage of the NDP caucus, I jumped to conclusions I now know are unsupported by fact. I would like to take this opportunity to correct several of my errors in order to clear Mr. Meier's personal reputation along with the business reputation of RackNine. 1. To my knowledge, neither Mr. Meier, nor RackNine. including any employees of RackNine, has ever been investigated for involvement in electoral fraud in the 2011 general election or otherwise. 2. RackNine provides a legitimate automated call service similar to services used by many political parties. 3. RackNine was merely an innocent intermediary not a participant in electoral fraud. I apologize for any damage my statements may have caused to Mr. Meier personally or to RackNine, and I have been specifically authorized by the NDP to apologize on behalf of the NDP for any similar damage the publications on the NDP website may have caused.

-621. The apology was issued by Mr. Martin at a televised press conference called by him and authorized by the NDAC at 11 am on Monday, April 16, 2011, at the Charles Lynch Theater, in Centre Block, Ottawa. The pooled cameras and microphones broadcast to over 100 newsrooms across the country. The apology was also prominently posted on the website of the NDAC and remains on the website to the date of this pleading. Very shortly after it was issued, the apology was widely disseminated and commented upon in the media. In particular, the text of the apology in whole or in part, and discussions thereof appeared on the websites of: a. b. c. d. e. f. g. h. i. j. k. 1. m. n. o. p. q. r. s. t. u. v. the Globe and Mail CTVNews CTV Edmonton the Toronto Star the National Post CBC news Macleans the Hufflngton Post Canada Winnipeg Free Press Calgary Sun Montreal Gazette 680 News Newstalk6lOCKTB London Free Press Global TV Global TV Saskatoon Olds Albertan Montreal Gazette Regina Leader Post CFCJ Kamloops the Chronicle Herald Metronews.ca

22. 23.

24. In addition, the video of the apology was broadcast in whole or in part on at least 15 websites. 25. The apology was also mentioned or picked up approximately and at least 100 times on Twitter. Any matters that defeat the claim of the Plaintiffs No Liability for Statements of Patrick Martin 26. The NDAC specifically denies that Martin was an agent for the NDAC; that it charged Martin with the NDAC's authority to speak on its behalf with respect to the voter suppression issue in the 2011 Canadian federal election either generally

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or with respect to the statements identified as being made by him in the Statement of Claim; that it authorized, incited encouraged or permitted Martin to make any of the statements identified in the Statement of Claim; or that it affirmed and ratified statements made by Martin. The NDAC puts the Plaintiffs to strict proof thereof. 27. The NDAC specifically denies that it is vicariously liable for the statements made by Martin. The NDAC pleads that there is no just and practical remedy, nor deterrence to be achieved out of the imposition of vicarious liability on it for Martin's statements. Martin spoke independently of the NDAC, the NDAC had absolutely no control over statements made by Martin or generally over statements made publicly by NDP Caucus members (the MPs); and the NDAC has no responsibility and also no ability to manage any risk arising from statements made. No Liability For The Words Complained Of 29. The NDAC pleads_that_the^woraVcomplaine4--Qf-GannQt--be-construed--as"being~ defamatory of the Plaintiffs, on their plain and literal meaning, or by innuendo, in the manner suggested by the Plaintiffs or otherwise. The NDAC further pleads that the words complained of were fair comment on a matter of public interest. The NDAC relies on the following facts: a. The admission of the Plaintiffs in the Statement of Claim that following the 2011 Canadian federal election, RackNine was contacted by Elections Canada in regards to allegations that a customer of RackNine may have used automated dialing services provided by RackNine in a manner that contravened the Elections Act; The admission of the Plaintiffs in the Statement of Claim that RackNine was served with a Production Order on November 23, 2011 by an investigator of Elections Canada; The fact that the above facts were notorious, widely publicized in the media, and known by the public at the time that the words complained of were posted on the NDP website; The fact that it was notorious and widely publicized in the media that Elections Canada was conducting an investigation into allegations from individuals who were known supporters of political parties other than the Conservative Party of Canada that they received misleading automated phone calls on election day in May 2011, inter alia, directing them to attend at the wrong polling station;

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b.

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The fact that these were generally viewed as extremely serious allegations and that there was intense public interest and media coverage of the issue starting in late February 2012; The fact that it was notorious and widely publicized in the media that RackNine was a company employed by the Conservative Party of Canada to place automated phonecalls for. political purposes; The fact that it was notorious and widely publicized in the media that RackNine was the company that in fact did place the phonecalls that are the subject of the Elections Canada investigation; The fact that it was notorious and widely publicized that RackNine had not worked for any other political parties; The fact that it was notorious and widely publicized that Mr. Meier was a supporter of the Conservative Party of Canada; ... Th_e_facUhaJ-Mr^Meier-di4-pes;t-a-picture-of-himserfTvitlr'a~cheque from" the government of Canada, attached, with the caption "It's true, the government does pay!" and further explained "it's to the company for some services rendered"; The fact that invoices sent by RackNine to Elections Canada were redacted; The fact that there was no record in the Conservative Party election returns of RackNine being paid, although it was admitted that the Conservative Part}' paid for those services. Rather, in ridings where RackNine was used, RMG issued flat-fee bills for services; The fact that Mr. Meier posted on his Facebook page a picture of RackNine's new servers, calling them the "Political Super Weapon".

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1.

m.

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The NDAC pleads that insofar as the words complained of consist of statements of fact, they are true in substance and in fact and insofar as they consist of expressions of opinion, they are fair comment made in good faith and without malice upon matters which are of public interest. In addition or in the further alternative, the NDAC pleads that, as one of Canada's major political parties, it had a social, political and moral duty to publish the words complained of and the Canadian public had a social, political and moral interest in receiving these statements. The NDAC has a duty to 'both its membership and to the general public to raise questions with respect to matters of public interest. The allegations that voters may have been intentionally misled in Canada's federal election in May 2011 are extremely serious, and are without doubt among the most serious such allegations that Canada's political system has encountered. The fact that an investigation was in process by Elections Canada

32.

-9also attests to the public interest nature of this issue. RackNine is centrally involved in this issue, insofar as it does not deny that the alleged misleading calls were placed through its systems. It is within the lawful and constitutional rights of a major political party to issue statements and make comments with respect to an issue of such obvious and significant public importance. Indeed, the NDAC would be failing in its social and political role if it did not comment upon and react to such allegations. 33. In the further alternative, the NDAC states that it engaged in responsible communication on a matter of public interest. In particular: a. as set out above, the allegations of tampering with voters were extremely serious and an investigation by Elections Canada is ongoing; b. the NDAC relied on facts that were widely known to the public; c. the NDAC relied on facts that are not denied by the Plaintiffs; d. the NDAC framed the words complained of in a reasonable manner, when read in the entirety of the web posting; e. to the extent available, the NDAC posted supporting documentation such as that showing-Mr^NdeierJiQldin^-governjaent cheque: f. the NDAC had a duty to its members, supporters, and the general public to react contemporaneously to events as they unfolded. 34. The NDAC further pleads and relies on section 2(b) of the Charter of Rights and Freedoms and section 52(1) of the Constitution Act, 1982 which guarantees freedom of thought, belief, opinion and expression including freedom of the press and plead they are not liable to the plaintiff for publishing the articles. The NDAC pleads that particularly in this case, which involves political debate on an issue of central importance to Canada's democratic system, it is essential that its statements be protected as social and political speech. Indeed, the statements made are political speech about the legitimacy of the democratic process and as a result lie at the heart of s. 2(b) of the Charter of Rights and Freedoms. Furthermore, a lawsuit in defamation claiming $5 million in damages could have the effect of significantly diminishing the NDAC's ability to function to the best of its capabilities as one of Canada's major political parties.

Pleading as to Martin's Statements
35. In addition and in the alternative, if the NDAC is found to be responsible for Martin's statements on any basis, including vicarious liability, the NDAC pleads: a. the statements made by Martin cannot be construed as being defamatory of the Plaintiffs, on their plain and literal meaning, or by innuendo, in the manner suggested by the Plaintiffs or otherwise; b. all defences set out above at paragraphs 26 - 34 apply equally to the statements made by Martin.

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36. The NDAC categorically denies all allegations that it acted with malice towards the Plaintiffs. As described above, as a major political party, it had a duty to make statements on the serious allegations raised in the course of the Elections Canada investigation. Moreover, the NDAC responded in good faith to the Plaintiffs, both by making the very difficult decision to remove these statements from its website as a precautionary measure, and by authorizing Martin to issue a public apology on its behalf, despite its strong belief that its statements were not defamatory and that it was entitled to speak on these public issues.

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Damages
38. The NDAC specifically denies that the Plaintiffs suffered any damage as a result of the words complained of. In particular, the NDAC specifically denies that the Plaintiffs3 reputation was lowered or that the Plaintiffs suffered any loss of business as a result of the words complained and puts the Plaintiffs_to_the_strict-

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The NDAC pleads that the amount of damages claimed by the Plaintiffs is abusive and grossly disproportionate, particularly as directed at a political party with a social and political responsibility to its members and to the general public to speak on matters of public interest. The NDAC pleads, without admitting, that if the Plaintiffs suffered any damage it is not the result of the words complained of, but as a result of the facts that: a. the Plaintiffs were widely identified in the press as, and have admitted to, being the company involved in placing the automated telephone calls that are the subject of the current investigation of Elections Canada; b. the Plaintiffs were widely identified in the press as having provided services for the Conservative Party of Canada exclusively; c. it was notoriously known that the Plaintiffs were the subject of Production Order from Elections Canada.

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To the extent that the Plaintiffs suffered any loss of business, which is not admitted but expressly denied, it is as a result of the impact that the above information already had on any potential customers of RackNine, including the Conservative Party of Canada. The NDAC cannot and should not be faulted for the fact that Mr. Meier's company has become involved in an investigation by Elections Canada. Conversely, the NDAC pleads that, as admitted at para. 23 of the Statement of Claim, it was also widely publicized in the media that RackNine Inc. was not the direct subject of an investigation by Elections Canada, and that the public was

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-11aware of this fact, and therefore, any decline in RackNine's business which is not admitted but expressly denied, cannot be attributed to the words complained of. 43. In addition, the NDAC relies on the public apology that it authorized Martin to issue on its behalf as well, which was widely disseminated in the press as described above and is readily available on the internet, in mitigation of any damages claimed by the Plaintiffs. The NDAC pleads that it issued the apology as soon as it had the opportunity to address this matter, given the significant transition period due .to the party's leadership convention.

Remedy sought:

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The NDAC respectfully requests that this matter be dismissed, with full costs awarded to it. The NDAC respectfully submits that the claim of the Plaintiffs is illconceived and abusive as it is directed at a political party with the responsibility to speak on matters of significant public interest to Canadians.