The Supreme Court of Canada fractures on jurisdiction and online defamation.

This week, a highly fractured Supreme Court addressed some of the common issues that arise in determining the appropriate jurisdiction for defamation claims when the harmful remarks have been published online.

The case centered around an article published by Haaretz in print and online in November 2011. The article took issue with Mitchell Goldhar’s ownership and management of Maccabi Tel Aviv. In it, Goldhar – a Canadian businessman and owner of SmartCentres Inc. – was said to be “penny pinching”, responsible for the team’s recurring crises, and “bordering on megalomania”.

The article was read widely in Israel – with some 70,000 copies in circulation – and was also read online by some 200-300 people in Ontario, where the businessman Goldhar resides.

Goldhar sued the journalist, the responsible editor, and Haaretz in Ontario. The Ontario courts’ jurisdiction was then challenged, and a majority of the Supreme Court confirmed that while the courts of Ontario may have possessed jurisdiction, Israel remained the clearly more appropriate forum.

At a basic level, the Court struggled with the fundamental issue of how to curb jurisdictional overreach. The common law tort of defamation is said to occur wherever the material is communicated to, and received by, someone other than the plaintiff. For publications diffused online, that means each individual download serves as both an anchor for jurisdiction and as a justification to apply the law of that forum. Since jurisdiction, once established, is only meant to be declined exceptionally on the basis of forum non conveniens, the current conflicts rules risk jeopardizing the order, fairness, and comity that are meant to shape this area of the law.

Israel considered to be the clearly more appropriate forum

For Justice Côté, the solution was simple. Authoring the lead judgment on behalf of herself and Justices Brown, and Rowe, and with the substantial concurrence of Justices Abella, Karakatsanis, and Wagner, she reasoned that “[g]iven the ease with which jurisdiction simpliciter may be established in a defamation case […] a motion judge must conduct a robust and carefully scrutinized review of the issue of forum non conveniens” (para. 48).

Applying this kind of careful scrutiny, the majority concluded that Israel was the clearly more appropriate forum.

The Haaretz defendants were all based in Israel and had no assets or presence in Ontario. While Goldhar resides in Ontario, he visits Israel frequently, and indeed possesses celebrity status there as the owner of its most popular soccer team. Haaretz’s witnesses were also mostly located in Israel. Importantly, these Israeli witnesses could not have been compelled to testify in Ontario, and so Haaretz’ ability to properly defend itself would have been compromised if the trial proceeded in Ontario. While Ontario law would apply on the basis that defamatory material was read in the province, Justice Côté reasoned that this factor ought to not be given much weight when the applicable law itself is based on the place where the wrong occurred. Moreover, Israeli law would have applied if the case were heard in Israel, and so there was no meaningful concern that the court eventually seized would be compelled to apply a less familiar law.

Justices Abella and Wagner endorse the theory that applicable law in online defamation cases should be established based on where the “most substantial harm” occurred

Justices Abella and Wagner were willing to go further still. Justice Abella reasoned that Israeli law should apply since it is the forum where the “most substantial harm” occurred. In online defamation cases, she reasoned, this rule would ensure that the law that applies is the one most closely connected to the wrong. Indeed, it would ensure that the applicable law reflects what is at the core of the tort of defamation – the protection of reputation. In this case, the record indicated that some 200 or 300 people had read the article online in Ontario, while up to 70,000 would have read it in Israel. And since Israeli law should apply to the merits of the dispute, all the more reason for this case to be heard in Israel.

Justice Abella added that the same approach should be used to determine which forum possesses jurisdiction (although on this, Justice Wagner disagreed).

Justice Côté, for her part, suggested that such an important departure from the traditional conflicts rules should be reserved for a future case, but did not want to “discourage [the] Court from taking up this issue” at such a later time (paras. 91-93).

Whether forum non conveniens should be applied more discerningly when the basis of jurisdiction is broad

The sharper fault line emerged over the proper approach to forum non conveniens. The majority – composed of six judges spread out over four (!) sets of reasons – appeared to endorse Justice Côté’s suggestion that a “robust and carefully scrutinized review of the issue of forum non conveniens” was especially appropriate where, as here, the establishment of presumptive jurisdiction was “virtually automatic” (para. 48).

The dissent disagreed. Chief Justice McLachlin and Justices Moldaver and Gascon reasoned that forum non conveniens sets a “high threshold” that is “purposefully stringent” and which should not be lowered, either through lenient application or through a robust and carefully scrutinized review.

Applying so high a standard, Israel could not be said to be clearly more appropriate. After all, Ontario law would continue to apply, and the plaintiff Goldhar should be free to sue for defamation in the place where he enjoys his reputation. For them, convenience for the parties and witnesses and the potential need to enforce any resulting judgment in secondary proceedings weighed less on the analysis.

The decision is of some importance to Quebec lawyers, since the law of Ontario – after Van Breda – is now similar to the basic rules set out in articles 3148 and 3135 of our Civil Code. Its presence will mostly likely be felt on the issue of forum non conveniens, where courts have clung to the notion that the doctrine must only be applied exceptionally, even when a number of the bases of jurisdiction recognized in the Code are broad and present the very same risks relating to unfairness and inefficiency.