"I welcome today’s decision by the court to dismiss the Foulidis lawsuit against me. I will continue fighting to represent the best interests of Toronto taxpayers at city hall. There is still a lot of work to be done and I will continue to focus on this," Ford said in a statement issued by his office.
Restaurateur George Foulidis sued Ford over critical comments made in August 2010, while Ford was in the midst of his first mayoralty campaign, concerning a deal between the city and Foulidis's business, Tuggs Inc.
The comments were made when Ford was invited to discuss campaign issues with the Toronto Sun editorial board.
Ford was incensed at the time that the city gave an untendered 20-year lease extension to Tuggs Inc. for the continued operation of the Boardwalk Café along Woodbine Beach. Foulidis said Ford suggested he won the contract as a result of illegal activity.
Ford's lawyer, Gavin Tighe, argued the defence of fair comment, telling the court that Ford's comments were opinion. He cited defamation case law from the Supreme Court of Canada, saying Ford's remarks were not libellous unless the primary intent was to hurt Foulidis.
Foulidis was seeking $6 million in damages.
Justice John Macdonald's 15-page decision says Foulidis failed to prove his case, which "must therefore be dismissed."
Macdonald ruled the plaintiff did not prove that Ford's comment were directed at Foulidis or that they were defamatory.
Foulidis' lawyer, Brian Shiller, said in an email to CBC News that "Mr. Foulidis is disappointed in the decision and is considering his options."
Meanwhile, Ford will return to court on Jan. 7 to appeal an unrelated decision.
In late November, Ontario Superior Court Justice Charles Hackland found that the mayor had violated conflict of interest laws by voting on an issue in which he had a financial interest. The judge ordered that Ford be removed from office.
A stay was granted until the appeal could be heard, and Ford has vowed that he will run in the byelection for his job if one is called. He argued that his decision to vote was an error in judgment.