SCC Stays Internet Defamation Case, Urges Fairness and Efficiency

 On June 6, 2018, the Supreme Court of Canada (SCC) addressed the challenging issue of jurisdiction and the internet in Haaretz.com v. Goldhar (Haaretz), by emphasizing the importance of ensuring fairness to foreign defendants, given that jurisdiction can be readily presumed based solely on a single download of an article.

In Haaretz, the SCC stayed a libel action against an Israeli newspaper brought by a Canadian businessman who claimed his reputation was harmed in Ontario because some people in Canada read the article online. The decision is significant for both domestic and foreign media.

BACKGROUND

In 2011, Israeli newspaper, Haaretz, published an article about Mitchell Goldhar, the owner and manager of the popular Maccabi Tel Aviv football team. The article focused on Mr. Goldhar’s ownership and management of the team, but mentioned that Mr. Goldhar, a Canadian, had a business in Canada and also referred to his management style. The article was published in Israel in Hebrew and English, to approximately 70,000 subscribers, and was posted on Haaretz’s website. No hard copies of the article were sent to Canada, but it was downloaded in Canada by 200-300 people.

Mr. Goldhar sued Haaretz in Ontario, alleging damages in Israel, the United States and Canada. Haaretz moved to have the action stayed on the basis that Ontario courts did not have jurisdiction, or alternatively, because Israel was the more appropriate forum.

The motion judge applied the two-step test laid out in Club Resorts Ltd. v. Van Breda (Van Breda), which is intended to ensure that courts assume jurisdiction only where there is a “real and substantial connection” between the subject matter of the action and the jurisdiction. At the first step, jurisdiction can be assumed on the basis of presumptive connecting factors, one of which is where the tort is committed. This presumption can be rebutted where it would be unreasonable to expect the defendant to be sued in the chosen forum. At the second step, the court engages in a “forum non conveniens” analysis to determine whether another forum is more appropriate, based on factors such as the comparative convenience and expense to the parties, applicable law, potential for multiplicity of proceedings and conflicting decisions, enforcement, and fairness.

The motion judge held that because the article was downloaded (i.e., published) in Ontario, the tort of defamation was committed in Canada. As a result, jurisdiction was presumed and was not rebutted. The motion judge also held that Haaretz had not demonstrated that Israel was clearly a more convenient forum.

A majority of the Ontario Court of Appeal upheld the motion judge’s decision, despite acknowledging that the judge had made legal errors in the forum analysis. Justice Pepall, dissenting, held that due to the motion judge’s errors, the decision was not entitled to deference, and that given the low threshold on which jurisdiction was presumed, it was necessary to conduct a “robust and carefully scrutinized review of the issue of forum non conveniens”. This led her to conclude that Israel was clearly the more appropriate venue.

SCC DECISION

A majority of the SCC allowed the appeal on the basis that Israel was clearly the more appropriate forum for the action. Chief Justice McLachlin, and Justices Moldaver and Gascon, dissenting, would have dismissed the appeal on substantially the same grounds as the motion judge and majority of the Court of Appeal.

While all the judges confirmed the use of the two-step Van Breda framework, they differed over its application. As Justice Côté noted, the jurisdiction simpliciter analysis prioritizes “order, stability and predictability by relying on objective connecting factors”, while, at the forum non conveniens stage, fairness and efficiency is emphasized. As a result, one download is sufficient to constitute publication and therefore, commission of the tort in the jurisdiction is presumed. However, in an indication that libel tourists (non-residents of Canada who may wish to come here to sue) will be unwelcome, she noted that the presumption may be rebutted if, for example, the plaintiff does not enjoy a reputation in the jurisdiction.

Otherwise, however, Justice Côté agreed with Justice Pepall that courts must conduct “a robust and carefully scrutinized review of the issue of forum non conveniens”. Justice Côté noted that this would require motion judges “to be particularly attuned to concerns about fairness and efficiency”, but added that it “should not be understood as imposing a different standard or burden for defamation cases”. After applying a robust and careful analysis, Justice Côté concluded that Israel was clearly the more appropriate, or convenient, forum.

Justices Abella and Wagner agreed that Israel was the clearly more appropriate forum, but differed from Justice Côté as they supported adopting the “place of most substantial harm” framework to determine the applicable law, something Justice Côté left open. As the article was essentially about Mr. Goldhar’s conduct in Israel, addressed to an Israeli audience where Mr. Goldhar is a celebrity, the place of most substantial harm to his reputation was clearly Israel, and so Israeli law should apply, favouring Israel as the appropriate forum.

The dissenting judges took a different view, deferring to the motion judge and holding that the presumption of jurisdiction was not rebutted because it was foreseeable that Mr. Goldhar would sue Haaretz in Ontario, and that fairness to Mr. Goldhar includes allowing him to sue where he enjoys his reputation, which includes Ontario.

IMPLICATIONS

The decision sends a message of restraint in internet libel cases. Canadian courts must be cautious in assuming jurisdiction over foreign defendants for libel on the internet. Justice Côté also gives clear guidance that foreign plaintiffs coming to Canada as libel tourists will be frowned on and may lose at the jurisdiction stage. For other cases involving Canadian residents, the SCC has told courts to consider the fairness in bringing a foreign media defendant into a Canadian court based on tenuous, but presumptively “real and substantial”, connections to Canada.

In staying the action against Haaretz, the SCC is also saying that Canadian media should not be made to defend cases brought elsewhere in the same circumstances, which may comfort Canadian media facing lawsuits wherever their publications may be downloaded.

Blakes acted for Haaretz in this matter.

For further information, please contact:

Paul Schabas                       416-863-4274
Kaley Pulfer                         416-863-2756
Brittiny Rabinovitch              416-863-4258

or any other member of our Media & Defamation group.