Canada: Order In The Court? The Van Breda Trilogy – Part IV – Choice Of Law

At the Supreme Court of Canada, choice of law has always been the poor cousin of private international law. While the Court has shown fascination with jurisdiction simpliciter, forum non conveniens and the recognition and enforcement of foreign judgments – cases such as Morguard, Amchem, Hunt, Beals, Pro Swing and Teck Cominco come to mind – it has issued but a single judgment, Tolofson, that addresses choice of law in the modern era. The comments of American scholar Laurence Tribe, cited by the Supreme Court of Canada in Unifund, describe the traditional situation well:

There is much to be said for the view that the current state of the Supreme Court's personal jurisdiction and choice-of-law doctrines is precisely backwards. It is easy for a state to apply its law (which is by definition outcome-determinative) to a case, but relatively difficult for it to obtain jurisdiction over a dispute, even though jurisdiction is never directly outcome-determinative. Jurisdictional issues are unpredictable and endlessly litigated; choice-of-law matters are largely unregulated. (Unifund, at para. 74)

This trend has continued with the Van Breda Trilogy. As discussed in a previous post, the Supreme Court in Van Breda purported to rehabilitate Canadian conflicts rules in order to introduce greater certainty, stability and predictability in the law. Ironically, however, LeBel J.'s equivocal treatment of the choice of law rule for defamation in the two of the Trilogy's cases will likely increase the uncertainty in this branch of conflicts jurisprudence.

Choice of Law in the Van Breda Trilogy

The principal discussion of choice of law principles in the Van Breda Trilogy is found in Éditions Écosociété. There, the Court considered the matter while assessing whether Ontario was forum non conveniens for a defamation claim by an Ontario corporation, which was brought against the Quebec-based publisher, authors, researchers and editors of a book that commented adversely upon the plaintiff's gold-mining activities in Africa. In that context, to support their argument that Quebec was the more convenient forum for the claim, the defendants argued that Ontario's choice of law rules pointed towards Quebec as the governing law of the tort. To make this argument, the defendants submitted that the Court should abandon the lex loci delicti choice of law rule for tort from Tolofson – i.e., the law of "the place where the tort occurred" – in favour of a special choice of law rule for defamation that focused exclusively upon the "place of the most substantial publication".

The Supreme Court began by observing that the rationale for the lex loci delicti rule is that "in the case of most torts, the occurrence of the wrong constituting the tort is its most substantial or characteristic element" (Éditions Écosociété, at para. 50). It then rejected the new choice of law rule proposed by the defendants. According to LeBel J., the "most substantial publication" rule "provides both courts and litigants with little guidance", since it is easy to imagine a book "being substantially published in more than one jurisdiction, in which case, the problem of forum shopping and the multiplicity of jurisdictions would remain" (para. 54). Further, LeBel J. observed that Canadian tort law only requires there to be a single instance of publication to establish defamation, so "[t]o adopt the standard of substantial publication in the context of private international law would amount to a significant change in the substantive tort" (para. 55).

However, LeBel J. did not stop there. Rather than simply holding that Ontario law applied pursuant to the lex loci delicti rule – as he concluded was the case (paras. 56 and 62) – LeBel J. offered an extremely lengthy obiter dicta about whether an alternative choice of law rule to the lex loci delicti, based upon the "place of most substantial harm to reputation", applied in defamation cases. In the end, while LeBel J. suggested that this alternative choice of law rule had several desirable features (e.g., it was likely to reduce forum-shopping), he concluded that it was unnecessary to decide the issue on the facts of Éditions Écosociété, stating:

In the case at bar, whether we apply the lex loci delicti rule or consider the location of the most substantial harm to reputation, the applicable law is that of Ontario and not Quebec. As a result, whichever approach is adopted, this factor favours Ontario in the forum non conveniens analysis. In this case, nothing turns on the question of whether lex loci delicti ought to be abandoned as the choice of law rule in multijurisdictional defamation cases. For this reason, I believe it prudent to leave this issue for another day. (para. 62)

LeBel J. also left open whether such an alternative choice of law rule for defamation applied in the other Trilogy case of Black, even though he acknowledged that, as in Éditions Écosociété, it was unnecessary to resolve or even raise the issue on the facts of the case. (Black, at para. 32)

Potential Significance

The treatment of choice of law in Éditions Écosociété and Black is a good example of why common law courts should limit their reasons to the issues that are necessary to decide the case before them. At the very least, if the nation's highest Court decides to raise an issue of whether there should be a new legal rule, then it ought to resolve it. By reinvigorating the possibility that another choice of law rule in tort exists beyond the lex loci delicti, the Supreme Court has needlessly introduced the risk of confusion into the Canadian choice of law paradigm. Three aspects of the Court's decisions are particularly problematic.

First, as noted, Van Breda creates a possibility that the lex loci delicti is no longer the sole choice of law rule for claims in tort. While Tolofson itself left open this possibility "where the wrong directly arises out of some transnational or interprovincial activity" (Tolofson, at 1050), the Court's reasons in Tolofson suggested that any exception to the lex loci delicti would operate at the margins of Canadian conflict of laws principles. Indeed, the Tolofson Court elsewhere refused to recognize any exception to the lex loci delicti rule at all where the tort claim involved interprovincial as opposed to international conflicts (Tolofson, at 1055-1063). The Van Breda Trilogy, by contrast, suggests such an exception may exist in any case involving the tort of defamation, which would represent a significant evolution in the state of the law. Further, the Van Breda Court had no difficulty suggesting this exception in both Éditions Écosociétéand Black, even though the facts in Éditions Écosociété involved a merely interprovincial (Ontario/Quebec) as opposed to international conflicts situation, like Black (Ontario/Illinois). Strangely, the Court did not even consider whether the proposed alternative choice of law rule for defamation merited any differential treatment as between Éditions Écosociété and Black in light of the international dimensions of the latter case.

These loose threads from the Van Breda Trilogy will leave parties wondering not only how the choice of law rules will apply to their claims, but what choice of law rule will apply in the first place. The lex loci delicti rule from Tolofson was already notoriously difficult to apply; what did it mean, for instance, to speak of the place where the "tort occurred" in a case where the different elements of the tort were consummated in multiple jurisdictions? Yet far from providing concrete guidance on these unanswered questions from Tolofson, the Van Breda Trilogy compounded them by failing to even decide what the relevant choice of law rule is. Such an approach hardly contributes to the "security of transactions with justice" sought in Van Breda (para. 74). Further, it was not necessary for the Court to introduce this uncertainty, since as LeBel J. noted in both Éditions Écosociétéand Black, the entire issue was obiter. It is unclear why, nearly 18 years after Tolofson, the Supreme Court thought it appropriate to raise this issue in obiter once again, only to leave it open.

Second, LeBel J.'s reasons create the possibility that choice of law rules may vary depending upon the tort in question, something which Tolofson itself had suggested may be the case for libel (Tolofson, at 1042). Thus, whereas the tort of negligence at issue in Tolofson is subject to the lex loci delicti, the choice of law rule for the tort of defamation is the "place of most substantial harm to reputation". If this indeed what the Court was suggesting, then it is an approach that has much to commend it. As many tort scholars have observed, it is nonsensical to speak of a common, monolithic law of "tort". The reality is that there exists a law of "torts", in which the applicable principles vary widely depending upon the nature, aims and policy constraints of the relevant tort involved. Some torts require proof of injury (abuse of public office) or even special damages (injurious falsehood), while others are actionable without it (trespass to land). Certain torts require proof of intentional misconduct (inducing breach of contract) or malice (malicious prosecution), while others require only a lack of reasonable care (negligence) or give rise to strict liability (the Rylands v. Fletcher action). Still other torts are designed to protect rights of property (conversion), in contrast to those designed to protect rights of physical autonomy (battery), reputation (slander) or privacy (intrusion upon seclusion). Part of the problem with Tolofson is that it purported to articulate a choice of law rule for "tort", when in fact there is no such uniform legal construct. The result was a cumbersome choice of law rule, appropriate perhaps for negligence, but ill-suited for more nuanced torts.

If the Court was intent on raising the issue of the wisdom of a uniform lex loci delicti rule in tort, it ought to have provided further guidance. Indeed, some of the Court's comments – for instance, that the lex loci delicti was selected as the choice of law rule for "tort" because "in the case of most torts, the occurrence of the wrong constituting the tort is its most substantial or characteristic element" – hint at the existence of an underlying principle for identifying new choice of law rules in tort. The Court could have developed this principle, perhaps by exploring whether it captures the minimum constitutional requirements of choice of law rules for torts recognized in Tolofson, in a manner similar to the "real and substantial connection" principle in Van Breda. If a "most substantial or characteristic element" test (or some other underlying principle) were to be applied in assessing the choice of law rule appropriate to each tort, then it would permit choice of law rules to be developed in a rational way, which is both sensitive to the unique features of the torts involved and in compliance with the Canadian Constitution. Indeed, that was the very goal the Court sought to achieve for jurisdiction simpliciter through its use of the constitutional "real and substantial connection" principle in Van Breda.

Third, the Court's reliance on "forum shopping" as a factor in selecting the appropriate choice of law rule for defamation is curious. LeBel J.'s reasons in Éditions Écosociété seem to suggest that concerns about forum shopping militate in favour of the choice of law rule that is most likely to require the application of a single jurisdiction's substantive law, regardless of the forum in which the claim is heard. As he observes:

... Restricting the available choice of laws might be a way to curb forum shopping. Indeed, there would be little strategic advantage to forum shopping if the conflicts rules were to require application of the same law regardless of where the matter is tried. (para. 49)

However, this analysis fails to take into account the fact that choice of law rules are always specific to the forum itself. Therefore, regardless of whether the choice of law rule adopted for a particular forum only permits the substantive law of a single jurisdiction to apply, another forum may have a completely different choice of law rule that requires the application of its own substantive law, or even the application of a third jurisdiction's substantive law that is more favourable than either of the other two. The important point here is that forum shopping includes shopping for the forum's choice of law rules themselves, as the forum's choice of law rules will ultimately determine the substantive law that applies to the plaintiff's claim. Thus, unless choice of law rules are made uniform throughout the world (which is entirely unlikely in the near future), the fact that a particular jurisdiction such as Ontario adopts a given choice of law rule will have no effect upon whether litigants may forum shop in other jurisdictions with different choice of law rules.

Indeed, the Court in Éditions Écosociété seemed to recognize this very fact. Immediately after completing its choice of law analysis in which it concluded that the law of Ontario would apply to the defamation claim (whether pursuant to the lex loci delicti, or the "place of most substantial harm to reputation" rule), LeBel J. turned to the remaining forum non conveniens question of whether either party would experience a "juridical advantage" if the claim were heard in Quebec. In that connection, he observed that if the claim were transferred to Quebec, then "[a]rguments about which law would govern the civil liability of Écosociété could also be raised under s. 3126 of the Civil Code of Québec and would have to be resolved by the courts of Quebec" (para. 63). Thus, the Ontario choice of law rule applied by the Court in Éditions Écosociété would not have prevented the plaintiff from forum shopping in Quebec had it perceived the Quebec choice of law rule to result in the application of a more advantageous substantive law.

It is to be hoped that the next time the Supreme Court addresses choice of law rules in "tort", its analysis will focus less upon concerns with forum shopping, and more upon developing clear rules for individual torts. Until that occurs, the ideals of order and fairness sought in Van Breda will remain as elusive as ever. As the Supreme Court said in Hunt, another conflicts case:

Legal systems and rules are a reflection and expression of the fundamental values of a society, so to respect diversity of societies it is important to respect differences in legal systems.  But if this is to work in our era where numerous transactions and interactions spill over the borders defining legal communities in our decentralized world legal order, there must also be a workable method of coordinating this diversity.  Otherwise, the anarchic system's worst attributes emerge, and individual litigants will pay the inevitable price of unfairness. ... (Hunt, at 295)

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