Solution for Business Law in Canada 11th Edition Chapter 1, Problem 1

by Richard A. Yates
585 Solutions 16 Chapters 65294 Studied ISBN: 9780133847130 Business Law 5 (1)

Chapter 1, Problem 1 : 1.Adams v. The Royal Vancouver Hospital ...

1.Adams v. The Royal Vancouver Hospital

From the point of view of the Chronicle, after Mr. Adams complained and threatened to sue, the reporter who did the article was questioned about it. She made further inquires and concluded that the facts were all correct and there was no question about the accuracy of the allegations as far as the other 5 men specified in the article and that if they were prosecuted they would likely be convicted of fraud. It was also clear that Mr. Adams was associated with them in the US and came to Canada as part of that group intending to take advantage of the friendly Canadian tax environment for research and development, which explains why the mistake was made. However, Mr. Adams in fact did do the research and development claimed and obtained from the Canadian taxation department a letter stating that they are entirely satisfied with the validity of the project with which he was associated and that Mr. Adams was in no way in any difficulties with the department and that there were no outstanding complaints against him. The taxation department has only rarely supplied such a letter. In a meeting with the Editor of the paper the reporter submitted copies of this letter as well as documents detailing the nature of the oil containment system developed by Mr. Adams and acknowledged her mistake with respect to Mr. Adams. What should the Chronicle do in these circumstances? 


Step-By-Step Solution

1.From Mr. Adams’ point of view, he has presented proof to RVH of the inaccuracy of the report and they still fired him. He has presented proof to the Chronicle of the falsehoods in the article, and the untold loss suffered (the loss of his job and ultimate damage to his career). He has requested a retraction and an apology and neither have come. What courses of action are available and what should be taken into consideration before choosing what course of action to take. 

 This sequence of events actually happened to a friend of mine. The names of the parties and the institutions involved and some details have been changed, but the events are essentially as described. 


Of course the dilemma here is whether Mr. Adams should sue or not. He has been defamed and he has lost his job. This case presents an opportunity to discuss the law in the areas of defamation and wrongful dismissal and to examine the advisability of the policies and actions of two large institutions 


First look at the article written in the Chronicle. Is there defamation? Discuss what constitutes defamation. In this case, to refer to a person by name and suggest that he along with others is eligible to be criminally prosecuted for fraud is derogatory and qualifies as defamation. But not all defamation is actionable. There are a number of defenses such as truth, absolute and qualified privilege and fair comment. None of these are available here. The fact that the newspaper reporter made a mistake and thought that what she was saying about Mr. Adams was true is also not a defense. In the US they have a constitutional provision that guarantees freedom of the press. This has been interpreted to mean in effect that such media organizations are not liable for defamation unless it can be shown that the publisher of the statement knew it was incorrect. We have a similar provision in the Canadian Charter of Rights and Freedoms, but thus far the Supreme Court has not extended this same kind of protection to the Canadian media. Newspapers and broadcasters are in the same position with respect to defamation as any private individual. Note, however, that there are provincial statutes in place in many provinces (including B.C.) that give some limited protection to the media and these should be reviewed with respect to this situation (see the B.C Libel and Slander Act RSBC (1979). 


It should also be noted that as a mater of policy many large newspapers, and broadcasters, refuse to acknowledge they have defamed anyone, refuse to apologize and vow to fight any action against them very vigorously. They have established a “war chest” to defend such actions and make it clear to anyone suing that they better be prepared to face huge legal costs win or lose. This policy is often justified on the basis that they feel that they ought to be in the same position as the US media and plan to do their job as if they were. Right or wrong, this policy places people like Mr. Adams in a very difficult position and when the actual person faced this problem and obtained legal advice he was discouraged from suing the newspaper involved. He was told that if he insisted on going ahead with the mater, the law firm would need at least a $15,000 retainer before they would start the process. He did not have access to this kind of money and discouraged, simply returned to the US to get on with his life. 


As far as the RVH is concerned they really had no choice. He was hired as a givings officer and with his reputation ruined could not do the job. They had to let him go whether the dismissal was justified or not. Point out here that merely having a valid reason to let someone go (e.g., no more work) does not necessarily excuse the employer from living up to certain basic obligations. In this case, a question that arises is whether Mr. Adams had ever been hired so that his leaving could be classified as wrongful dismissal. This is an opportunity to distinguish between working as an independent contractor and as an employee. Was he hired as an employee in April or not until June 1? What was his status in April and May? Did the fact that he was unable to do his job legally justify getting rid of him? What about the implications for the morale and loyalty of other employees. Should they have tried to find him another job in the hospital organization? What were the consequences facing the RVH if it was determined that they had wrongfully dismissed Mr. Adams. What is he entitled to? This is an opportunity to explain the employee’s obligation to mitigate, and what effect this will have on what he is offered in a settlement. 


The basic questions here once the legal relationships have been established are what should Mr. Adams do now? What should the Chronicle do? What should the RVH do? Cost and further damage to his reputation must motivate Mr. Adams. The Chronicle must consider the broad business advantage of fighting such a defamation action though they have clearly wronged  Mr. Adams. And the RVH must consider the damage having Mr. Adams in his position can do to the hospital and to their donations campaign against a wrongful dismissal action if in fact Adams was ever an employee and chose to sue? They must also consider how they treat Mr. Adams who is clearly a victim here will affect the moral and loyalty of their other employees and whether this is an important consideration to them.




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