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Boardwalk Cafe owner George Foulidis sued the mayor over comments made about sole-source contract with the city, but a judge dismissed the case in 2012Matthew Sherwood/The Globe and Mail

An Ontario judge erred by ignoring the "winks and nudges" and "vague innuendo" made by Toronto Mayor Rob Ford when dismissing a defamation case against him two years ago, the lawyers for a Beaches restaurant owner are arguing in appeals court.

George Foulidis sued Mr. Ford two years ago for comments the mayor made to The Toronto Sun about Mr. Foulidis' restaurant's sole-source contract with the city – saying its exclusive right to sell food at the beach "stinks to high heaven."

The judge in 2012 dismissed the $6-million lawsuit, but Mr. Foulidis – who owns the restaurant formerly known as The Boardwalk Pub – brought the case to appeals court on Tuesday, asking for the decision to be overturned.

Mr. Foulidis' lawyers, Paul Pape and Andrea Bolieiro, said the trial judge erred in finding the comments not defamatory or directed at Mr. Foulidis specifically.

In his 2012 decision, Mr. Justice John Macdonald ruled that Mr. Ford's comments were not defamatory partly because the mayor never mentioned Mr. Foulidis by name – only his company, Tuggs Inc.

But Mr. Pape argued that the judge "failed to appreciate that accusations made by vague innuendo are in most cases more grievous than direct accusations, which can be more easily met and refuted."

The arguments, made by written submissions, also said that "Reasonable readers make inferences. They 'read between the lines.' They are able to 'take a hint,' including 'nudges and winks.'"

The two lawyers said in court that media reports frequently mentioned Mr. Foulidis by name. They added that the mayor's spokeswoman at the time, Adrienne Batra, used Mr. Foulidis's name in a radio interview, daring him to sue the mayor.

Mr. Ford's lawyer, Gavin Tighe, responded that Mr. Foulidis himself linked his name with the deal by calling a press conference and demanding the mayor apologize. He maintained that the mayor was referring to the deal, and not Mr. Foulidis in his comments.

Judge Macdonald's 2012 decision also noted that Mr. Ford hedged his comments by adding "I can't accuse anyone, or I can't pinpoint it." But those words, Mr. Pape wrote, "have as much neutralizing effect on the rest of Ford's words as lipstick does on a pig."

Mr. Tighe would not say whether he has spoken recently with the mayor, who is on leave seeking help for substance abuse. "Clearly, the mayor was 100 per cent successful in the [original] trial.

"He's hopeful that that will be maintained, and my instructions are to try and make that the case," he said.

Mr. Foulidis is also appealing his lawsuit against Bruce Baker, a city council candidate, over a letter he sent to councillors about the deal.

If his appeals are successful, Mr. Foulidis is asking for $20,000 each from the mayor and Mr. Baker, and reimbursement for the legal costs he was ordered to pay for Mr. Ford.

The court has reserved its decision.

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