COVER

BIG DOLLAR BATTLE

THE REICHMANNS PRESS A LIBEL SUIT

PATRICIA CHISHOLM October 24 1988
COVER

BIG DOLLAR BATTLE

THE REICHMANNS PRESS A LIBEL SUIT

PATRICIA CHISHOLM October 24 1988

BIG DOLLAR BATTLE

COVER

THE REICHMANNS PRESS A LIBEL SUIT

It is one of the biggest, most complex and closely watched libel actions ever launched in Canada. Last January, Albert,

Paul and Ralph Reichmann, as well as their mother, Renée, and their multibillion-dollar company, Olympia & York Developments Ltd., sued Toronto Life Publishing Co. over an article published in Toronto Life last November, which tries to document the prewar and wartime sources of the Reichmann family’s fortune.

Toronto Life editor Marq de Villiers, freelance Toronto writer Elaine Dewar, Toronto Life owners Key Publishers Co. Ltd. and CUC Ltd. are also defendants in the $ 102-million lawsuit. But family head Paul Reichmann denied that the issue is one of a large business empire against a small magazine company.

Said Reichmann about initiating the large libel action: “Someone would tell me [that it was a] mistake to sue

and do this thing. I’m not surprised at that opinion but I’m certain that when the trial is concluded that people will realize we were right.”

Order: The case is still at a preliminary stage. Statements of claim and defence have been filed with the Supreme Court of Ontario, as well as a further response, known as a

reply, by the Reichmann plantiffs. So far, the Reichmanns have succeeded in obtaining a court order compelling Dewar to release her extensive interview notes, although she was permitted to block out names of confidential sources. However, the matter is still one of dispute, with the extent of the deletions also being contested.

And last week, lawyers for the Reichmanns also applied for the court’s permission to try the Toronto Life case together with a related suit against The Toronto Sun and Sun columnist Diane Francis. Just prior to the article’s publication, Francis wrote a column referring briefly to some of its contents. If the request to try the two cases together is granted, the Reichmanns will be exposed to only one set of examinations by opposing lawyers, rather than two. In addition, the Sun would be involved in a much larger, more

costly and lengthy proceeding over a complex article, instead of a simpler action over a 500-word column. The Toronto Sun has vigorously opposed the application. So far, preliminary, out-of-court examinations of the parties, known as examinations for discovery, are scheduled to begin in November.

If an out-of-court settlement cannot be

reached, a definitive conclusion to the dispute could take a very long time. Lawyers say that the case, with appeals, could drag on for five or six years and that the trial itself will not even begin for at least another one or two years.

Charge: The cost of such an extended lawsuit could be very significant. Senior lawyers routinely charge more than $200 per hour, and up to $1,500 to $2,000 per day for court time. If the Reichmann case goes to trial, legal fees may well exceed $1 million for each side. Indeed, any damages that are finally awarded may be far less than total legal fees. Despite the size of the claim, lawyers say that an award of more than $1 million would be very unlikely.

The highest libel award ever upheld by a Canadian court is $135,000, given last June to Montreal civic politician Gerald Snyder in

his suit against the Montreal Gazette. An award of almost $1 million was made against CTV Television Network Ltd. in a suit brought by waste-management firm Walker Bros. Quarries Ltd., but the Ontario Court of Appeal ruled in 1986 that the amount was too high and sent the award back for reassessment by a lower court. No new award has yet been made.

Toronto Life editor de Villiers confirmed that the magazine carries libel insurance of about $1 million but said that he has “no fears whatever about Toronto Life going down.” Added de Villiers: “The Reichmanns have not emerged with diminished reputations, but, nonetheless, it is not pleasant being sued by people with millions of dollars.”

Task: The Reichmanns have retained investigators to retrace much of Dewar’s extensive research. They have tried to find the individuals interviewed by Dewar and to reinterview them, a task that could involve travel to several countries, including Hungary, France, Morocco, Israel and the United States. Court documents filed by the Reichmanns’ lawyers in response to the statement of defence contain several references that suggest many of

A DISCUSSION OF THE REICHMANN PAST IS HOTLY CONTESTED IN COURT

Dewar’s key sources were reinterviewed.

Reaction to the suit ranges from support from some members of the Jewish community to outrage from many writers and publishers. Soon after publication of the Dewar story, The Toronto Sun and The Globe and Mail

were also sued by the Reichmann brothers following a column in the Sun and an article in the Globe that both referred to the Dewar article. According to the claim against The Globe and Mail, the Globe article is libellous because it suggests that the Reichmann lawsuits are aimed at suppressing publication of information concerning the Reichmann family’s past. Since that time, few articles have appeared that refer to the suit except those chronicling its slow progress through court.

Libel: Under Canadian law, any publication that repeats libellous information is responsible for the libel to the same extent as the original publisher. In libel cases where the injured party has established that the information complained of could be perceived as libellous, the onus to prove the truth of disputed statements falls on the defendants. Normally, that places the burden to prove the truth of certain statements on those making them, often journalists.

But under American law, the burden of proving that disputed information is incorrect lies with those most likely to know, the plaintiffs. In addition, public figures in the United States are given less protection from libel than ordinary citizens. Their activities are viewed as being available for wide public comment, and unless it is shown that such comment is motivated by malice, libel against a public figure is difficult to prove.

Some Canadian experts say that the Canadian law has the effect of unduly chilling public comment.

Richard Dearden, an Ottawa libel lawyer, said that the Canadian law is “absolutely too restrictive for the

media who are reporting on public figures; robust public opinion is inhibited.” But many Canadian editors deny that the Reichmanninitiated litigation has influenced them. Said Globe and Mail managing editor Geoffrey Stevens: “There is no sense of oppression here. I don’t feel in any way intimidated about doing other pieces on the Reichmanns.” He added, “So much of good reporting attracts libel notices because people want to shut you up.” And said Ian Urquhart, man-

aging editor of The Toronto Star: “I don’t think that we have backed off on a single story because of the Toronto Life situation. We haven’t been chilled.”

Other procedures in the Toronto Life suit relate to an as-yet-unpublished book about

the Reichmanns, also written by Dewar. Lawyers for the Reichmanns have succeeded in obtaining court orders compelling Dewar to release copies of the manuscript of the book to them. They are now also seeking the computer disk on which the book was written. Titled Absolute Trust: The Reichmanns’ Rise to Wealth and Power, the 400-page book will be published by Random House of Canada Ltd., although Random editor Edward Carson would not say when.

The company has libel insurance, but Carson said that he is not waiting for the outcome of the trial to publish. He added: “I bought the book long before the article was published. The reason then and the reason now is that it is an absolutely fabulous story.” However, New York City-based Viking Press, which expressed interest in publishing the book in the United States, withdrew after the libel suit was initiated and does not plan to publish.

The Dewar article contains many references to the Reichmann family’s position in

the Jewish community, especially the Orthodox community, both in Canada and during their residence in Europe and Morocco up until the end of the Second World War. They are devout Orthodox Jews with a wide reputation for generous philanthropy among Orthodox organizations. Several members of the Toronto Jewish community discount any negative effect caused by the article. Martin Lockshin is an Orthodox Jew and a director of the Hebrew program at York University in North York, Ont. Lockshin said that the Reichmanns are “wonderful, generous people who have done great things for the Jewish community.” He added that the Dewar article has “not had an appreciable effect” on the way the family is perceived by the Orthodox community.

Success: Gunther Plaut, a senior scholar at Toronto’s largest synagogue, Holy Blossom Temple, said that he has not heard the article discussed in months, and that it left the Reichmanns’

reputation unsullied. Said Plaut: “When the topic turns to the Reichmanns, the talk is of their fabulous success and their munificence to charitable causes. One hears of their scrupulous honesty and their ethical behavior.”

It is clear that as the case progresses, the positions on

both sides of that widely followed lawsuit will come under greater and greater scrutiny. Many important issues of libel law will be addressed and, if the case proceeds to trial, possibly resolved. But whatever the outcome, it is likely that the reverberations of the dispute will have a lasting effect on Canadian libel law and on the Canadian journalists who must work within its rules.

PATRICIA CHISHOLM