Legal Updates

Imposition of a lien for a disputable debt constitutes defamation

May 17, 2018

A municipal water corporation imposed a lien on the bank accounts of a real estate development company for a water debt, despite the fact that the debt was in dispute.

The Court held that the lien constitute defamation against the company.  Imposition of a lien by itself constitutes publication of defamation because it presents to third parties that one does not repay its debts and thus harms the reputation. The water corporation is not entitled to defences of good faith or truth of the publication because of its failure to take reasonable means to review the company's arguments before imposing the lien.