Executive summary: key legal and evidentiary issues

• All defendants were found liable for a coordinated defamation campaign against Raoul Malak and the Ansan Group, involving defamatory internet posts alleging criminal activity.

• Mr. Hanna was identified as the author of the defamatory materials, while Mr. Jackman and Mr. Paine were found to have hired and paid him $2.4 million under a sham profit-sharing agreement to carry out the campaign.

• Joint and several liability was imposed for $1.5 million in damages, including general, aggravated, and punitive damages, upheld on appeal.

• Default judgment was entered against Mr. Hanna after he failed to file a response to the contribution and indemnity action brought by VTS, Mr. Jackman, and Mr. Paine.

• The plaintiffs' argument that Mr. Hanna should bear 100%, 80%, or at least 50% of the liability was rejected, as the court found all three individuals equally at fault.

• Apportionment was set at one third each, requiring Mr. Hanna to contribute and indemnify $576,564.19 of the total $1,729,692.58 paid to satisfy the judgment.

The defamation campaign and the parties involved

This case arose from a long-running defamation dispute within British Columbia's traffic control industry. Valley Traffic Systems Inc. ("VTS") was owned and led by Philip Keith Jackman as president, with Trevor Paine serving as vice president. Remon Hanna had worked briefly for the Ansan Group, a competitor in the industry owned by Raoul Malak, in 2010, but had a falling out with Mr. Malak in 2011. Mr. Hanna then began working with VTS in January 2012, just as a lucrative contract for traffic control services for BC Hydro was about to be put out for tender. The trial court found that Mr. Hanna entered into a profit-sharing agreement with VTS, under which he was to receive 75% of the profits from work done for BC Hydro on Vancouver Island, with VTS to receive the remaining 25%. Over five years, VTS paid Mr. Hanna $2.4 million.

The defamatory publications

In June 2012, a series of defamatory publications appeared on various internet sites about Mr. Malak and his companies. The posts suggested Mr. Malak had engaged in money laundering, received kickbacks, and was involved in bribery and other criminal activity. The publications were made to Telus, then-Premier Christy Clark, and Rich Coleman, the minister responsible for BC Hydro at the time. BC Hydro issued its request for proposals in August 2012. In February 2013, it awarded the contract to VTS. In May 2013, Mr. Malak and the Ansan Group commenced the underlying defamation action, alleging VTS, Mr. Jackman, Mr. Paine, and Mr. Hanna were responsible for the defamatory publications.

The first trial and appeal

The first trial dealt with liability only. The trial judge in Malak v. Hanna, 2017 BCSC 1739 found Mr. Hanna to be the author of the defamatory materials. Mr. Jackman and Mr. Paine were found liable as part of a common design to defame Mr. Malak and his companies. VTS was found directly and vicariously liable. On appeal, the Court of Appeal allowed the appeal in part, setting aside most liability findings against VTS, Mr. Jackman, and Mr. Paine and ordering a new trial: Malak v. Hanna, 2019 BCCA 106.

The second trial and its findings

Mr. Hanna did not participate in the second trial, though parts of his examination for discovery evidence were admitted. The trial judge in Malak v. Hanna, 2023 BCSC 1337 reviewed the emails sent between Mr. Jackman, Mr. Paine, and Mr. Hanna, as well as emails sent to third parties sharing the defamatory publications. The court did not accept Mr. Jackman's and Mr. Paine's evidence on various matters, finding them not to be credible. Importantly, the judge found their evidence that they did not know that Mr. Hanna was the author of the defamatory publications not to be credible. The judge also found the profit-sharing agreement to be a sham, as the $2.4 million paid to Mr. Hanna was not justified by any work Mr. Hanna performed both before and after the BC Hydro contract was awarded. The court found Mr. Jackman, Mr. Paine, and Mr. Hanna participated in a common design to carry out a defamation campaign against Mr. Malak and the Ansan Group. The judge found these three individuals intended to harm the reputation of Mr. Malak and the Ansan Group for the purpose of putting VTS in a better position to obtain the BC Hydro contract and other traffic control services work, and they knew Mr. Malak and the Ansan Group would suffer injury.

Damages awarded and the appeal

The judge awarded Mr. Malak general damages of $500,000 and aggravated damages of $200,000. He awarded the Ansan Group general damages of $300,000. He awarded punitive damages of $500,000. VTS, Mr. Jackman, Mr. Paine, and Mr. Hanna were found jointly and severally liable. VTS, Mr. Jackman, and Mr. Paine appealed. They argued the trial judge erred by not applying the participation element of the test for a common design tort. The Court of Appeal in Valley Traffic Systems Inc. v. Malak, 2024 BCCA 370, dismissed this argument, as the trial judge found Mr. Jackman and Mr. Paine paid Mr. Hanna $2.4 million to carry out the smear campaign. The Appellants argued the trial judge's finding that Mr. Jackman and Mr. Paine paid Mr. Hanna $2.4 million as compensation for the defamation campaign was not supported by the evidence. The Court of Appeal rejected this argument, finding there was evidence on which the judge could have drawn that inference. The Court of Appeal noted the trial judge's finding that the profit-sharing agreement was a complete fabrication, meant to mask the true reason for payments made by VTS to Mr. Hanna, was not based on Mr. Hanna's evidence, but on the inconsistencies in the evidence of Mr. Paine and Mr. Jackman and the improbability of such an important agreement remaining undocumented. The Court of Appeal also rejected the Appellants' argument that the general damages award was too high. The Appellants argued the aggravated damages of $200,000 was too high, contending that Mr. Jackman's and Mr. Paine's conduct—forwarding hyperlinks or copies of defamatory material to a handful of people—did not meet the threshold for malice that is a prerequisite for an award of aggravated damages. The Court of Appeal dismissed this, finding the judge concluded they hired and paid Mr. Hanna a significant sum of money to engage in a widespread and malicious smear campaign in order to damage and weaken a commercial competitor, and that the finding their conduct was malicious was well-founded on the evidence. The Appellants further argued the trial judge erred by awarding aggravated and punitive damages on a joint and several basis. The Court of Appeal dismissed this argument as well, finding that because the appellants engaged in a common design to defame the respondents to gain a competitive advantage, the conduct of all of the defendants was equally worthy of rebuke. On January 20, 2025, VTS, Mr. Jackman, and Mr. Paine remitted to Mr. Malak and the Ansan Group the amount of $1,729,692.58 in full satisfaction of the amount owing, being the damages awarded plus interest.

The contribution and indemnity action

VTS, Mr. Jackman, and Mr. Paine started this action against Mr. Hanna on April 7, 2025, seeking contribution and indemnity. They relied on s. 4 of the Negligence Act, R.S.B.C. 1996, c. 333, and s. 53(3) of the Law and Equity Act, R.S.B.C. 1996, c. 253. Mr. Hanna was served with the notice of civil claim but did not file a response. Default judgment was obtained on October 8, 2025, with damages to be assessed. The plaintiffs argued Mr. Hanna should indemnify them 100%, alternatively 80%, or at least 50%, contending the court found Mr. Hanna was the author of the defamatory material and mainly responsible for its distribution. They relied on Thomas v. McMullan, 2002 BCSC 22, arguing that those who spread the defamatory statements wider or emphasized them more prominently should be more liable for damages.

The court's ruling on apportionment

Justice Chan found Thomas v. McMullan distinguishable, as that case was not one where liability was found on a common design but instead involved the main defendant who created the defamatory material and various newspapers joined as third parties who published it. The court found that Mr. Jackman and Mr. Paine were incorrectly minimizing their involvement in the smear campaign. The trial judge had found they hired Mr. Hanna and entered into an agreement with him for the purpose of conducting a defamation campaign against Mr. Malak and the Ansan Group, hid behind a sham profit-sharing agreement to mask the true nature of the endeavour, and were motivated by malice—findings upheld on appeal. The court noted that the fact Mr. Hanna created the defamation material does not lessen the liability of Mr. Jackman and Mr. Paine, as Mr. Hanna created the defamatory materials because he was paid to do so by Mr. Jackman and Mr. Paine. The court also rejected the argument that, because Mr. Hanna did not file a response and default judgment had been obtained, the court could simply proceed on the basis that the allegations in the notice of civil claim had been admitted. Justice Chan held the duty of the court in assessing damages where there has been a default judgment is not limited to accepting the plaintiff's position, and the court has to conduct the apportionment based on findings made by the trial judge and upheld on appeal. Finding no basis to differentiate the degree of fault of Mr. Jackman, Mr. Paine, and Mr. Hanna, the court ordered that each of them should share equally in the payment of damages, with each paying one third. Mr. Hanna was ordered to contribute and indemnify VTS, Mr. Jackman, and Mr. Paine for one third of the $1,729,692.58, which is $576,564.19.