A convenient forum for a libel action

By Justin Ling November 21, 201721 November 2017

A convenient forum for a libel action

Once again the Supreme Court of Canada is tasked with addressing how Canadian courts assume jurisdiction in the context of online activity.

Next week, the top court will hear arguments on whether Canadian businessman Mitchell Goldhar’s defamation lawsuit against an Israeli daily should be heard in Ontario.

The case itself turns on an article Haaretz published in 2011 alleging that Goldhar was mismanaging the Maccabi Tel Aviv Football Club he owns. In that piece, the author contends that Goldhar’s “lack of long-term planning” and “penny pinching” could be hobbling the team. It lays a large part of the problem on the fact that Goldhar was running his team largely from Canada.

But instead of suing Haaretz in Israel, where the article was read tens-of-thousands of times, Goldhar filed in Ontario.

Haaretz, by its own admission, has no footprint in Canada: No headquarters, no reporters, no subscribers. It does not even send printed copies to Canada.

The article attracted just 200 unique readers from Canada between its publication and the first hearing, many of which were likely from lawyers involved on the case.

That doesn’t mean the libel didn’t occur. But it raises a question: If the majority of the alleged harm occurred in Israel, why not bring the claim forward there? Would it not be the most convenient forum?

Haaretz applied for a stay in the case, arguing that Ontario is not the more appropriate forum. It alleges that Goldhar only filed the libel claim in Ontario because it is likely to be a more favourable to plead his case.

Goldhar’s lawyers, in their appeal to the Supreme Court, are sticking to a simple argument: “Mr. Goldhar’s reputation in Ontario was attacked. He therefore began this action against Haaretz and the author and editor of article in Ontario.”

The two lower courts agreed, noting that the offending article makes a sidelong reference to his Canadian business operations.

But it’s at the top court that things may make a seismic shift.

The Supreme Court has already issued a considerable number of rulings in recent years dealing with forum, in cases with clear parallels to this one.

In Breeden v. Black, in 2012, it allowed a libel suit to go forward after three Ontario newspapers published material that, the applicant claimed, was libelous. It agreed with the Court of Appeal that “a real and substantial connection was presumed to exist on the basis that a tort was committed in Ontario.” As such, Ontario was the best forum for the case.

In Club Resorts Ltd. v. Van Breda, involving Canadians on vacation who were injured by property owned by the resort, the top court ruled that, in testing for a real and substantial connection between the application and the forum, “the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum.”

That logic was held up in Éditions Écosociété Inc. v. Banro Corp, where the court allowed an Ontario-based corporation to proceed with a libel lawsuit against a Quebec-based publisher over a book that, while available in both provinces, was published in French and mainly intended for a Quebec audience. The appellants didn’t manage to convince the bench that Quebec was the more convenient forum.

So why isn’t Haaretz an open-and-shut case?

According to Iain MacKinnon, a partner at Linden & Associates, at the root of it is the question of where the most substantial harm was done.

In Breeden, the court found that the material was originally published in Ontario. So there was a clear connection and logic behind bringing forward the claim in that province. In Van Breda, the harm occurred against Canadians who had booked their vacations from Canada. In Banro, harm was not contemplated, as the appellants hadn’t adduced any evidence to that end.

That means there is still uncertainty over what forum non conveniens really means, MacKinnon says.

“One of the questions left open in those cases is whether a court should take into account the location where the most substantial harm was done or the location where the tort was committed,” he told CBA National. “They left that open in Banro, the court may now address that in this case.”

There is more evidence supporting the case that Goldhar’s reputation suffered in Isreal, more so than in Canada.

But in libel law, the amount of the damages, at least when it comes to proving the actionable offence itself, isn’t terribly relevant.

“The number of people who read, view or hear the libelous article or broadcast will simply impact the size of the damage award,” says Roger McConchie, with practises at McConchrie Law and specialises in online libel.

“The case-law revolves around whether there is a real and substantial connection,” he says. From his perspective, there’s no need for a new test to determine where the most harm occurred: The real connection is enough. And for Goldhar, a Canadian citizen with business operations in Canada that rest on his reputation, that’s easy to do.

Even so, McConchrie wants to see where the court comes down on the forum non conveniens issue. Even if Goldhar’s case is open-and-shut, it presents an opportunity for the court to fill in the record for those cases.

After all, the other two libel cases concerned with this extra-territorial libel — now five years old — involved newspapers and books. This case rests heavily on the territory-neutral reality of the internet.

That's why the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic (CIPPIC) intervened, arguing: "Because the same general framework applies to all plaintiffs, an overly lax approach to internet jurisdiction may open the door to disorderly misuse and overcrowding of our courts.”

In other words: While Goldhar may not be forum-shopping, or engaging in libel tourism, someone else may seek to.

As MacKinnon points out, “Canada is still relatively a plaintiff-friendly place.” Opening that door wider could put a rush on the courts for anyone who can prove any connection to Canada.

That would expose publishers in Canada and abroad. If a Dutch newspaper runs a news story on a multinational company, and is confident is has not run afoul of local libel law, could it face suit by a Canadian arm of the company for infringing Canadian law?

MacKinnon says it’s a consideration publishers ought to be considering. “These days, I think every publisher has to consider the fact that when they put something online, they have to consider this risk,” he says. “They theoretically could get sued everywhere in the world.”

It’s that concern that may drive the Supreme Court’s decision in this case.

“On a policy basis and on a practical basis it's not fair to expect a publisher to be faced with worldwide and almost unlimited liability,” MacKinnon says. “It's not realistic to have a story lawyered beforehand to ensure that it complies with libel laws anywhere in the world.”

The U.K., which has long boasted favourable libel laws for would-be applicants, cracked down on libel tourism in 2013, requiring applicants to prove that “serious harm” occurred. MacKinnon says the courts now operate under the assumption that if it’s a waste of judicial resources to hear the case, it won’t go forward, effectively stopping cases that are not worth the candle, nor the wick.

McConchrie isn’t so sure the court will get to that issue.

“I think it unlikely that the Supreme Court of Canada will comment on the U.K. model,” he says. “The Ontario resident who is suing cannot be considered a ‘tourist’ if he sues in the Ontario courts.”

Even if it does reach the issue of possible forum-shopping, the court will be at ease with the door that is being propped open. After all, it was just this year that the court issued a ruling in Google v. Equustek, opening the door for Canadian courts to issue courts governing foreign companies.

“The unique juridical advantage offered by this Court’s recent decision in Equustek entices plaintiffs with hypothetical and weak connections to Canada to commence litigation here,” CIPPIC writes in its brief. “Following Equustek, Canada is now the only place in the world where a third-party takedown or delisting order with extraterritorial effect has been upheld by the jurisdiction’s highest court.”

So while libel tourism may be a dirty word for many, it seems distinctly possible that the Supreme Court may be all too comfortable with making Canada a convenient forum.

 

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