Canada: A New Era For Libel: Reconciling The Rules Of Jurisdiction With The Challenges Of The Internet Age

Torys Quarterly: The Cross-Border Update



In Haaretz.com v. Goldhar, the Supreme Court of Canada (SCC) offered a convoluted response to the important question of whether Canadians can sue for defamation in Canada over internet publications that are automatically and instantaneously disseminated all around the world.1

While the Court was very divided, its ultimate conclusion was that, even though Canadians may want to protect their reputations here at home, they may not be able to sue in Canadian courts for defamation.

While this case decides a narrow point on relatively narrow grounds, it reflects the primary legal question of the 21st century: how can local courts reconcile traditional legal principles with the modern reality of the internet? In 2017's Google Inc. v. Equustek Solutions Inc., the Court had no difficulty exercising its jurisdiction over the internet globally.2 In contrast, in Haaretz, the Court took a more limited approach to its own jurisdiction, deferring to other countries' courts to protect reputation.

Internet Libel Spans Multiple Jurisdictions

Mitchell Goldhar is a Canadian citizen who owns and operates SmartCentres Inc. in Ontario. He also owns the Maccabi Tel Aviv Football Club, a professional soccer team in Israel.

In November 2011, the prominent Israeli newspaper Haaretz published an article about Goldhar's ownership and management of the Maccabis. The article described Goldhar in colourful and unflattering ways, including comments that his management style is "based on overconcentration bordering on megalomania" and reflects "penny pinching and lack of long term planning." Although the article had a limited readership in Canada, it was published on Haaretz's English language website and was read by numerous of Goldhar's employees at SmartCentres. Goldhar commenced an action for libel in Ontario.

Court Directs the Plaintiff to sue in Israel

Haaretz sought to stay Goldhar's action on the basis that Ontario lacked jurisdiction and/or Israel was a more convenient forum. A majority of the SCC agreed, and stayed the proceeding as requested by Haaretz.

The SCC's reasons were uncharacteristically fractured, with six judges writing five different decisions.

The SCC's reasons were uncharacteristically fractured, with six judges writing five different decisions. The judgement that received the most support (written by Justice Côté, with Justices Brown and Rowe concurring), held that Israel was clearly a more convenient forum for the action.

Justice Côté held that the Ontario courts had "jurisdiction simpliciter" to hear the action, meaning it had the legal authority to determine it. A presumption of jurisdiction occurs when a tort is committed in the province. The tort of defamation is committed by publication, which includes anyone reading or downloading the article. Since that occurred in Ontario, Justice Côté held that jurisdiction simpliciter is "virtually automatic" in cases of internet defamation.3

However, Justice Côté opted to stay the action on the basis of forum non conveniens, which entitles courts that have jurisdiction to decline to hear a case if there is a clearly more appropriate forum to do so. In this case, that forum is Israel, for a variety of reasons:

  • Comparative convenience and expenses for the parties favoured Israel because Haartez's witnesses were there and may not be available in Ontario.
  • Enforceability favoured Israel because there was no evidence that Haaretz had any assets in Ontario.
  • Fairness and efficiency also favoured Israel. In particular, Goldhar had a reputation in Ontario, but also had significant business interests and reputation in Israel, which were the subject of the Haaretz article.4

Importantly, while the plurality said that forum non conveniens should not be applied any differently for internet defamation than other causes of action, the focus on the requirement for courts to be "particularly attuned to concerns about fairness and efficiency" (particularly for defendants) appears to point strongly in the direction of cases being heard in the jurisdiction in which the defendant publishes.5

While Justice Côté acknowledged that Goldhar would likely not have an opportunity to apply Ontario substantive law in an Israeli trial, she declined to give this factor much weight. They noted the application of foreign law should be unsurprising in an interconnected world for international players like Goldhar with global reputations.6

Concurrences and Dissents

The remainder of the court's six judges wrote four decisions disagreeing with Justice Côté and one another.

Three judges, each writing individually, would have taken an even more restrictive approach to internet defamation claims. For example, Justice Abella would have adopted the "most substantial harm test" where Canadian courts effectively would not have jurisdiction over a claim if the most substantial harm to the plaintiff's jurisdiction occurred elsewhere.7

The Court did not really tackle the realities of the internet, relying instead on analogies to traditional bricks-and-mortar businesses.

The remaining three judges dissented. They critiqued the majority judgement for extending the forum non conviens analysis and making it more difficult for plaintiffs to bring an action in the jurisdiction of their choosing.8 They would have permitted a plaintiff to bring a claim in Canada if he or she lives, works, and feels the "sting" of the libel in Canada.9

SCC Strikes Hot and Cold on the Question of Internet Jurisdiction

While the Haaretz decision, in isolation, is simply an exercise of a well-established test, the general approach of the majority's decision seems inconsistent with the 2017 decision in Google Inc. v. Equustek Solutions Inc.

Google began as an intellectual property dispute. Equustek sued Datalink for using trade secrets to design a rival product that it was marketing online. Equustek sought and obtained a global injunction against Google ordering it to remove links to Datalink's websites worldwide, including google.com, google.ca, google.fr and others.

As it stands now, Canadian courts will protect your intellectual property rights across the world, but may well not permit you to defend your reputation in your home jurisdiction.

The SCC upheld that the worldwide injunction as the "only effective way to mitigate harm to Equustek."10 In reaching this conclusion, the Court did not really tackle the realities of the internet, relying instead on analogies to traditional bricks-and-mortar businesses. This gave the impression that Canada's common law courts would not hesitate to take broad jurisdiction over internet torts, wherever they may have originated. The Court in Google rejected arguments concerning comity, duplication, or extraterritoriality, in the name of upholding Canadians' rights.

Indeed, it is the conclusion in Google that makes the approach in Haaretz surprising. Unlike Google, it seemed to focus on avoiding the internet's obvious potential to create claims in numerous jurisdictions, and, perhaps even more importantly, the defendant's right to defend itself in its home forum.

As it stands now, Canadian courts will protect your intellectual property rights across the world, but may well not permit you to defend your reputation in your home jurisdiction. While this may be the result of case-by-case decision making, it begs the question: what will the Court do the next time a global legal problem arises by operation of the internet? If the answer remains ambiguous then the Court is abdicating its responsibility to provide guidance for litigants who need to understand the scope and limits of its jurisdiction on wrongs conducted on the internet, wherever the defendant might be physically located.

Footnotes

1 Haaretz.com v. Goldhar, 2018 SCC 28.

2 Google Inc. v. Equustek Solutions Inc., 2017 SCC 34.

3 Haaretz, para. 48.

4 Ibid, paras. 53. 70, 78, 83.

5 Ibid, para. 48.

6 Ibid, para.92.

7 Ibid, paras 113, 129.

8 Ibid, para. 182.

9 Ibid, para. 151.

10 Google, para 53.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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