Canada: The Supreme Court's Conflicting Reasons On Conflicts Of Law

Last Updated: September 2 2018
Article by Cynthia Spry

The Law Times recently asked me about the Supreme Court's decision in Haaretz.com v. Goldhar, 2018 SCC 28 ("Goldhar"), and specifically, for the takeaway on convenient forums, in light of the Supreme Court's earlier decision in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 ("Van Breda").

While it is possible to ferret out a takeaway, the decision involves five different judgments, with six judges concurring in the result, but for a variety of different reasons. It appears to be a departure from the former Chief Justice's approach, which was reportedly to seek unanimous decisions, and discourage concurring reasons (which she viewed as an unnecessary, confusing indulgence).1 

Background: In 2011, Mitchell Goldhar commenced a claim for libel in connection with an article that was written about him by an Israeli newspaper, in English and Hebrew, and published in print and online. Mitchell Goldhar is a prominent Canadian businessman who owns and operates a number of SmartCentres in Ontario, as well as the Maccabi Tel Aviv Football Club in Israel. Mr. Goldhar maintains a residence in Israel and travels there every few months, and was described as something of a celebrity there.

The allegedly libelous article suggested that Mr. Goldhar's management style might doom the soccer club, and that this management style, which was imported from his Ontario businesses, involved "overconcentration bordering on megalomania, penny-pinching and a lack of long-term planning". The motion judge found it likely that 200 to 300 people in Canada read the article (including most of Mr. Goldhar's employees), while approximately 70,000 people read the article in Israel.

The Decision in Goldhar: The two questions the Court deal with in Goldhar were: (1) whether the Ontario court could exercise jurisdiction over the claim (whether there was a presumptive connecting factor pointing to a real and substantial connection between the dispute and the jurisdiction); and (2) whether it should (meaning, should it decline to exercise its jurisdiction, in favour of Israel, as a clearly more appropriate forum).

The majority of the Supreme Court found that the Ontario court did have jurisdiction to hear the dispute, based on a presumptive connecting factor (the tort was committed in Ontario, because the article was read or downloaded in Ontario) but that it should decline to exercise its jurisdiction, as Israel was a clearly more appropriate forum.

In Van Breda, the Court listed four specific factors that give rise to a rebuttable presumption a Canadian court has jurisdiction to hear a dispute.2  Justice Côté, for the majority in Goldhar, characterized the Van Breda approach as an attempt to bring greater order and predictability to the jurisdictional analysis, while still ensuring fairness and efficiency.3

On the first question, the Court in Goldhar did not disturb the finding in Van Breda: four factors give rise to a rebuttable presumption that the court has jurisdiction simpliciter. Goldhar also provided some helpful guidance as to the circumstances in which the presumption might be rebutted in a defamation case (lack of reputation in the jurisdiction, for example).4 

On the second question (the forum non conveniens analysis), Justice Côté cited heavily from Van Breda, reiterating that the burden is on the defendant to satisfy the court that the alternative forum is "clearly more appropriate", and the normal state of affairs is that jurisdiction should be exercised once it is properly assumed.5 However, the result in this case (that Israel was a clearly more appropriate forum) casts doubt on this finding. Dissenting Justices McLachlin, Moldaver and Gascon expressed concern that Justice Côté's approach suggested more scrutiny of the lower courts' decisions than was appropriate,6 and an erosion of the high bar that must be met in the forum non conveniens analysis.7

The Takeaway: Given the five sets of reasons, it is difficult to know exactly what effect Goldhar will have.  The practical takeaway appears to be that the determination of whether the court has jurisdiction is about ensuring order and predictability, and the exercise of jurisdiction (the forum non conveniens analysis) is about fairness.

Justice Côté wrote:

The "real and substantial connection" test at the jurisdiction simpliciter stage prioritizes order, stability and predictability by relying on objective connecting factors for the assumption of jurisdiction. Conversely, the forum non conveniens analysis emphasizes fairness and efficiency by adopting a case-by-case approach to identify whether an alternative jurisdiction may be "clearly more appropriate".8

In the result, Justices Côté, Brown and Rowe appeared to be primarily concerned that it was unfair to the Defendants to litigate in Ontario, given the number of witnesses they intended to call that were resident in Israel.9 By contrast, Chief Justice McLachlin (as she then was), appeared to be primarily concerned that Mr. Goldhar should be able to sue where he maintains his reputation, because for many plaintiffs, being denied access to one's home forum means being denied justice altogether.10  The Chief Justice saw no unfairness in the Defendants being sued here, because the motion judge expressly found that it should come to no surprise to the Defendants that Mr. Goldhar would seek to "vindicate his reputation where he lives and works".11

To date, Goldhar has been relied upon to dismiss two proposed class proceedings on jurisdictional grounds, or alternatively, stay the action because Ontario is forum non conveniens,12  and to determine choice of law in an estate dispute.13  The long-term effect of Goldhar remains to be seen.

Footnotes

1 Kirk Makin, "Beverley McLachlin", online: The Canadian Encyclopedia <https://www.thecanadianencyclopedia.ca/en/article/beverley-mclachlin>.

2 We previously blogged about these factors here: the defendant is domiciled or resident in the province; the defendant carries on business in the province; the tort was committed in the province; or, a contract connected with the dispute was made in the province.

3 Goldhar, paras. 28 to 32.

4 Ibid., para. 44.

5 Ibid., para. 46.

6 Ibid., para. 179.

7 Ibid., paras 174, 191.

8 Ibid., para. 28.

9 Ibid., paras 54 to 70, 79 and 96.

10 Ibid., paras 213 to 217.

11 Ibid., para. 216.

12 Leon v. Volkswagen AG, 2018 ONSC 4265 (alleging the common law tort of fraudulent misrepresentation with respect to the sale of certain securities); Yip v. HSBC Holdings plc, 2018 ONCA 626 (alleging secondary market liability under Part XXIII.1 of the Ontario Securities Act, R.S.O 1990, c. S-5).

13 Wamboldt Estate v. Wamboldt, 2018 NSSC 163.

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