IN THE COURT OF QUEEN'S BENCH OF ALBERTA JUDICIAL DISTRICT OF CALGARY. and- STATEMENT OF DEFENCE

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1 IN THE COURT OF QUEEN'S BENCH OF ALBERTA JUDICIAL DISTRICT OF CALGARY BETWEEN: RONALD D. GHITTER Plaintiff and- ROB ANDERS, EZRA LEVANT and E. VTRGIL ANDERSON, both in his own capacity and as TRUSTEE OF THE REFORM FUND CANADA Defendants STATEMENT OF DEFENCE 1. The Defendants deny each and every allegation contained in the Statement of Claim unless specifically hereinafter admitted. 2. The Defendants deny that Anderson was at any time material hereto a trustee of the Reform Fund Canada and further deny that the Reform Fund Canada operated as the Reform Party of Alberta for the purpose of raising funds for the Alberta Senatorial Selection Campaign. The Defendants further deny that the Defendants Anders and Levant at any time material were acting as spokesmen for the Reform Fund Canada. 3. The Defendants Levant and Anders admit paragraphs 2 and 3 of the Statement of Claim and that they were responsible for preparing and publishing the fundraising letter and emergency update referred to in paragraphs 12 and 13 of the Statement of Claim. The Defendants deny that Anderson and/or the Reform Fund Canada had anything to do with the preparation or circulation of the fundraising letter.

2 -2-4. The Defendants further deny that Anderson and/or the Reform Fund Canada had anything to do with the establishment of the Reform Website or the game "Wall of Shame Trivia" referred to in paragraphs 16 and 17 of the Statement of Claim. 5. The Defendants are not aware of the details of the PlaintifFs curriculum vitae as set out in paragraph 6 of the Statement of Claim but state that whether the Plaintiff has had a long and distinguished career of public and community service and whether he represents the people of Alberta as a Senator as alleged in paragraph 7 are matters of opinion, and will be determined by a judge and/or a jury at the trial of this action. 6. In answer to paragraphs 8,9,10 and 11 of the Statement of Claim these Defendants state that: (i) whether the Plaintiff has worked diligently with respect to Senate reform is a matter of opinion and will be deteimined by a judge and/or a jury based on the evidence before the Court; (ii) whether the Plaintiff has worked hard on behalf of Albertans is a matter of opinion to be detennined by a judge and/or a jury at the trial of this action, but the Defendants say that Senate attendance records for the period of February 1996 to September 1997 establish that the Plaintiff had an attendance record of less than 60% and the lowest attendance record of a Senator appointed from Alberta; (iii) the Plaintiff has been quoted widely in the press with respect to Alberta's human rights legislation and Albertans in general that "Alberta's become a back water, its an embarrassment" which he attributed to "bigotry that exists in Alberta and in Alberta's Government." 7. In answer to the whole of the Statement of Claim, the Defendants deny that the words complained of in the fundraising letter, the emergency update, the reports in the Calgary Herald and the Edmonton Journal and the Reform Website were defamatory of the Plaintiff in their plain and ordinary meaning or alternatively bear the innuendo claimed by the Plaintiff. 8. In further answer to the whole of the Statement of Claim and in the alternative, the Defendants state that if the words complained of by the Plaintiff are defamatory, which is not admitted, then those words were! published as political comment without malice on an occasion of

3 qualified privilege, that is during the Alberta Senatorial elections and were made of and concerning the Plaintiff, an appointed Senator from Alberta with respect to the manner in which he was discharging his duties as a public official. The Defendants have a right to criticize the Plaintiffs actions as a public official and possess a common interest with the Alberta electorate in debating during the Senatorial Election process how one of the appointed Senators from Alberta was performing his duties in the Senate. 9. In further answer to the whole of the Statement of Claim, the Defendants state that they enjoy a constitutional right and privilege of freedom of expression pursuant to Section 2(b) of the Canadian Charter of Rights and Freedoms to express and communicate facts, comments and opinions concerning the conduct of the Plaintiff, a public official, on matters of public interest. The Defendants state that the Plaintiff brings this action out of comments made criticising his performance as a public official and that this litigation involves issues which have been and still are being debated by the Plaintiff and the Government of Canada. The Defendants plead and rely upon Sections 2(b), 24 and 32 of the Canadian Charter of Rights and Freedoms, Section 52 of the Constitution Act, 1982 and the preamble and the entire text of the Constitution Act, 1867 in defence of this action. 10. In the alternative and in answer to the whole of the Statement of Claim and in particular paragraphs 12,13,15,16,17,18,19,20 and 21 the Defendants state that insofar as the words complained of consist of statements of fact they are substantially true and insofar as the words consist of expressions of opinion, they are bona fide fair comment made in good faith and without malice on facts relating to the Plaintiffs performance as a Senator and public official. 11. In further specific answer to paragraphs 12, 13, 16,17 and 18 of the Statement of Claim, the Defendants state that the following words of which the Plaintiff complains, are substantially true: (a) The Fundraising letter Dear Albertans, Who said these insulting words? "Alberta's become a backwater. It's an embarrassment" Any guesses? Was it Pierre Trudeau?

4 -4- Was it Lucien Bouchard? Was it Sheila Copps? Wrong, wrong, wrong. This anti-alberta statement came from Ron Ghitter. Alberta's own Senator. But it doesn't stop there. On July 26,1997, Ghitter told the Edmonton Journal that Alberta's culture is "based on the bigotry that exists, unfortunately, in my province and in my government"...ghitter showed up for work only 55% of the time over the last four years. But he still took 100% of his paycheque. Last year, Ghitter cost you and me more than $64,000 in salary. Plus another $40,000 for (champagne class) air travel... Plus another $39,000 for office and "other" expenses. Plus a $10,100 personal expense account. Tax free. With no need to show receipts. And, starting this year, he'll receive another $9,000 housing allowance to pay for his place out in Ottawa. What really angers me, though, is how Ghitter got to where he is. The Senate seat he now occupies used to belong to Stan Waters and the people of Alberta. In 1989, democracy took a huge step forward when Stan was voted into the Senate by the people. Hundreds of thousands of Albertans voted for Stan Waters to sit in the Senate. Nobody voted for Ghitter... But do you know what is the most frustrating thing about Ghitter's behaviour in Ottawa? Back in 1993 he told the Calgary Herald "I'm going to trv and do what I can to get an elected Senate."... In February of this year, he promised Calgary students that he'd resign if Albertan's ever elected a Senator. But one month later, when Premier Klein actually called Alberta's Senate election,... That's not the only time that Ghitter has challenged Premier Klein. On November 23,1996, he told the Calgary Herald that "the Klein revolution is being carried out on the backs of seniors, the ill, vouth and minorities." So what can we do about Ghitter?

5 And that's why I am writing to you today. I want vou to tell me whose side von'r^ on. On October 19th, Albertans will again vote for our Senators... To comply with Alberta's senate election laws, our candidates must run as <creform Party of Alberta" candidates. That's how it was for Stan Waters, too. I was proud to personally give one of the first contributions to the Senate campaign. But we need so many thousands of dollars more.... Whose side are you on? On October 19th, all Albertans will have to choose whose side they're on.... A contribution to the Reform Party of Alberta is eligible for a generous provincial tax credit,... Whatever you can give we need it now. Thank you for your generous support. Your truly, Rob Anders, MP Official Opposition Critic for the Senate P.S. Please make your cheque payable to "Reform Party of Alberta" and return it right away using the enclosed, pre-paid envelope. (b) Emergency Update As this letter goes to press, Alberta Senator Jean Forest is announcing herresignation from the Senate.... It's one thing for the Prime Minister to say he opposes an elected Senate.... As of today, Premier Klein is mobilizing against the feds. He has fired a warning shot, telling Chretien to back off and let Albertans fill this Senate seat democratically. The Reform Party has gone a step further. We have a team of top-notch constitutional lawyers seeking an injunction to stop Chretien from replacing Forest

6 before Albertans vote in October. We don't know if we'll win this fight but we're committed to trying? We'll do our best to keep you informed on this breaking story. But the need for your help is stronger then ever. We now have a two-front war to wage... We have to pay for radio ads and lawn signs. On the other hand, we have to pay for the battle in court, too. And each day in court can cost thousands of dollars. So, please give generously. Now more than ever, stand and be counted in this historical fight. 12. In further particular answer to paragraphs 12 and 13 of the Statement of Claim the Defendants state that the comments and opinion upon the facts set out in paragraph 11 herein are as follows: (a) The Fundraising letter Ghitter is embarrassed by Albertans. He thinks you and I are bigots. He thinks our home is a "backwater". But that hasn't stopped him from taking every last cent of his huge pav cheque that he collects for being one of Alberta' unelected, unaccountable, lazy Senators. That's right. I said lazy. But decide for yourself:... I guess representing a backwater like Alberta, full of bigots like us, still has its perks. Plus another $40, for champagne-class air travel....for when he bothers to show up for work....just his pal Brian Mulronev.... The excuses.... Five years have gone by, and the only thing he's achieved is a tidy pay raise....ghitter reneged on his promise. Instead of doing the honourable thing, Ghitter has spent the last six months denouncing Senate elections, and desperately trying to protect his cushy job. I know what he wants you to do. He wants you to forget about him, and his cushy expense accounts. He wants you to ignore his wastefulness. He wants you to ignore his insults.

7 -7-...Are you on the side of Ron Ghitter, an unelected, unaccountable Mulroney Tory? Are you on the side of Jean Chretien and the establishment who always seem to find a way to insult Alberta. Or are you on the side of the late Stan Waters and Preston Manning and Premier Ralph Klein and the 91% of Albertans who support Senate elections?...we'll choose two proud Albertans - not someone like Ron Ghitter. We need vour help Ghitter and the other Senators have the resources of the Senate behind them - fax machines, staff, airline tickets, expense accounts, the works. All we have are the donations of grassroots Albertans like you. We need your help to campaign far Senate reform, for democratic elections, and against the Ron Ghitters of the world....we've got to run a campaign to elect real Senators, and to shame Ghitter out of office! When I think about Ghitter I get angry, and frustrated. But I know that there is something constructive we can do: clean out the Senate stables. On one side of us stands Ron Ghitter, Jean Chretien and the embarrassing Senate. On the other side stands Preston Manning, Ralph Klein, and thousands of Albertans....And today, I'm asking vou to choose sides, and to support Senate reform with a cpntribution....and it's a concrete way to show your support for Senate reform. Because Alberta shouldn't have to put up with Ron Ghitter a minute longer than we have to. (b) Emergency Update...This may be the first step in a deliberate plan by the Prime Minister to undermine Alberta's Senate election. We understand the Prime Minister is right now planning to replace Forest with another appointment-and de-rail Alberta's Senate election. This is an affront to every Alberta voter....but it is something completely different when he deliberately sabotages our election.

8 -8-...Ottawa courts have a history of siding with Ottawa politicians against Albertans......On the one hand, we've got to campaign in the Senate election, against people like Ron Ghitter... Now, more than ever, it's important that we show the Prime Minister who's the real boss in our democracy. He's picked a fight with Albertans and we can't back down. Senate reform has always been Albertans' dream. We can't let the Ottawa bullies steal that dream from us. 13. In answer to paragraphs 15, 16, 17, 18, and 19 of the Statement of Claim the Defendants say in the alternative that if the statements made by them to the press concerning the fund raising letter and if the statements made on the Reform Website are defamatory as alleged, which is not admitted, then they are political comment made during the Alberta Senatorial campaign process and are accordingly protected either by the defence of qualified privilege or of bona fide fair comment on matters of public interest and the Defendants will plead and rely upon Sections 2(b), 24 and 32 of the Canadian Charter of Rights and Freedoms, Section 52 of the Constitution Act, 1982 and on the preamble and entire text of the Constitution Act, In further answer to paragraph 24 of the Statement of Claim the Defendants say that the facts and opinions that were published in the fundraising letter, in the statements to the press and on the Reform Website were all made during a political campaign, namely the Alberta Senatorial election, and were made honestly and without malice in support of an elected Senate and as such are protected by qualified privilege and/or fair comment. The Defendants further deny that the facts upon which they based their political comment and expressed their opinions were false but say that those facts are substantially true. 15. In further answer to the whole of the Statement of Claim, the Defendants state-that they enjoy a constitutional right and privilege of freedom of expression pursuant to the preamble and text of the Constitution Act, 1867 where the parliamentary form of government was adopted for Canada. In order for a parliamentary form of government to function effectively and democratically, Members of Parliament on either side of any political issue of the day must be able to express and communicate facts, comments and opinions concerning the conduct of other Members of Parliament which are of public interest and that a constitutional privilege attaches to such comments. The Plaintiff brings this action out of comments criticizing his performance as a public official and this litigation involves issues which have been and still are being debated by the Plaintiff and Members of Parliament in the Parliament of Canada and elsewhere. To the extent that the comments and

9 -9- opinion expressed by the Defendants of and concerning the Plaintiff relate to the manner in which the Plaintiff is carrying out his duties as a Senator, they relate to the good government of Canada and are made on an occasion of privilege. The Defendants plead and rely upon the preamble and the entire text of the Constitution Act, 1867 and amendments thereto in defence of this action. 16. In further answer to the whole of the Statement of Claim, the Defendants deny that the Plaintiff has been defamed as alleged, has suffered the damage to his reputation as alleged or at all and further deny that they were actuated by malice in making the political comments. 17. The Defendants propose that the trial of this action be held before a judge and jury in the City of Calgary. WHEREFORE THE DEFENDANTS PRAY THAT THE PLAINTIFF'S CLAIM BE DISMISSED WITH COSTS ON A SOLICITOR AND ITS OWN CLIENT BASIS. DATED at the City of Calgary, in the Province of Alberta, this ^V day of December, 1998, AND DELIVERED BY Messrs. Fraser Milner, Barristers and Solicitors, Solicitors for the Defendants, whose address for service is in care of the said solicitors at 29th Floor Fifth Avenue Place, 237-4th Avenue S.W., Calgary, Alberta, T2P 4X7.

10 TO: RONALD D. GHITTER Action No IN THE COURT OF QUEEN'S BENCH OF ALB^TA JUDICIAL DISTRICT OF CALGARY THIS STATEMENT OF DEFENCE is filed by Fraser Milner, Barristers and Solicitors, solicitors for die Defendants, ROB ANDERS, EZRA LEVANT and E. VIRGIL ANDERSON, both in his own capacity and as TRUSTEE OF THE REFORM FUND CANADA The Lawyer to contact at FRASER MILNER is G. Neil McDennid, Q.C., telephone (403) The Defendants reside at: BETWEEN: RONALD D. GHITTER -and- Plaintiff Calgary, Alberta This Defendants address for service is: c/o Fraser Milner Barristers & Solicitors 2900,237-4th Avenue S.W. Fifth Avenue Place Calgary, Alberta T2P4X7 Attention: G. Neil McDennid, Q.C. ROB ANDERS, EZRA LEVANT and E. VIRGIL ANDERSON, both in his own capacity and as TRUSTEE OF THE REFORM FUND CANADA STATEMENT OF DEFJSNCE Defendants at which address service of subsequent proceedings in this action may be served as effectively as if served upon these Defendants personally. FRASERVMILI Barristers fi*solicitors 3000, 237-4th Avenue S.W. Fifth Avenue Place Calgary, Alberta T2P4X7 Solicitor: G. Neil McDennid, Q.C. Telephone: (403) Facsimile: (403) File: CY1997 GNMCDERM

LAW SOCIETY OF ALBERTA IN THE MATTER OF THE LEGAL PROFESSION ACT; AND

LAW SOCIETY OF ALBERTA IN THE MATTER OF THE LEGAL PROFESSION ACT; AND IN THE MATTER OF A HEARING REGARDING THE CONDUCT OF ARNOLD PIRAGOFF, QC A MEMBER OF THE LAW SOCIETY OF ALBERTA Single Bencher Hearing