Vital to pick right forum for multi-jurisdictional defamation cases

By Staff

A recent Supreme Court of Canada decision in a case involving an alleged multi-jurisdictional internet defamation reinforces the fact that for Ontario to be regarded as the appropriate forum, the statement of claim must sufficiently focus on the plaintiff’s Canadian reputation and damage to it in Ontario, Toronto lawyer and mediator Howard Winkler and lawyer Eryn Pond write in the Toronto Law Journal.

In the matter, a newspaper that publishes in print in Israel and online worldwide appealed the lower court decisions that allowed a Canadian resident and business owner to sue the paper for libel in Ontario, the article says.

As Winkler, principal and founder of Winkler Dispute Resolution, and Pond, a lawyer with the firm, explain, while almost all judges agreed that Ontario courts had jurisdiction over the proceeding, the majority allowed the Israeli defendant’s appeal, finding that Israel was clearly the more appropriate forum.

There were four separate majority opinions with lead majority reasons delivered by Justice Suzanne Côté — backed by Justices Russell Brown and Malcolm Rowe — and the remaining majority opinions delivered separately by each of Justices Rosalie Abella and Andromache Karakatsanis and now Chief Justice Richard Wagner, Winkler and Pond write, adding former Chief Justice Beverley McLachlin wrote the dissenting reasons, backed by Justices Michael Moldaver and Clement Gascon.

Côté’s reasons suggest that a plaintiff’s failure to sufficiently plead and specify the existence of a substantial reputation in Ontario and focus on harm to that reputation may impede a plaintiff’s success on a jurisdiction motion, they write.

“Had [the Canadian] narrowed his statement of claim in a manner that focused on his Ontario business interests and his Ontario reputation, and had he specifically undertook in his statement of claim not to commence similar proceedings in other jurisdictions, the pendulum may have swung in his favour,” Winkler and Pond say.

In his reasons, Côté stressed the importance of defining the scope of the action in the jurisdiction simpliciter and forum non conveniens analyses, they write.

“In what would constitute a severe blow to [the plaintiff's] position, Justice Côté found that his amended statement of claim (amended claim) ‘was never limited to libellous statements pertaining to his Canadian business or damage to his Canadian reputation,’” Winkler and Pond write.

The article says that in relation to the amended claim, Côté, in particular, commented:

  1. While it states that the plaintiff is a “business owner and operator,” the amended claim only specifically mentions his business in Israel

  2. The natural and ordinary meaning of the article in the amended claim fails to identify any connection to his Canadian business

  3. The list of “alleged factual errors and fabrications in the article” in the amended claim “does not identify any such errors or fabrications relating to [the plaintiff’s] Canadian business practices, but it does specifically identify statements pertaining to his management of [his company in Tel Aviv]...”

  4. The amended claim “makes no mention of the article’s claim that [the plaintiff’s] management model was imported directly from his main business interest — a partnership with Wal-Mart to operate shopping centres in Canada” even though this is the passage that is said to provide the connection between the allegedly libellous statements and [the plaintiff’s] Canadian business reputation”

  5. The amended claim, while stating that damage to the plaintiff’s reputation will continue to be suffered in Israel, Canada, and the United States, it never singles out Canada as “the forum where reputational harm has been suffered for the purposes of this action.”

Winkler and Pond say that Abella also noted that five out of six of the defamatory statements “concern “[the businessman’s] conduct and reputation in Israel, not Canada.”

“This observation swayed Justice Abella in finding that the place of most substantial harm to [the plaintiff’s] reputation is Israel and, accordingly, Israeli law should apply,” they write.

Although the plaintiff acted to restrict his damages to only those suffered in Canada, Côté found that it could not act to limit the scope of his claim, Winkler and Pond write.

“Justice Côté also noted that [the plaintiff’s] undertaking did not ‘preclude a future action from being commenced in Israel to recover damages there’ and a possible future action in Israel detracts from an important consideration at the forum non conveniens analysis: The avoidance of a multiplicity of legal proceedings and of conflicting decisions,” they say.

Côté found that the undertaking provided by the plaintiff in this matter was materially different than the one considered in another multi-jurisdictional internet defamation case, Winkler and Pond say.

“In that case, the plaintiff … undertook ‘not to bring any libel action in any other jurisdiction’ and ‘limited his claim to damages to his reputation in Ontario.’ Unlike [with the Canadian businessman, the plaintiff in that case], while initially claiming damages to his worldwide reputation, later amended his claim, restricting it to damage to his Ontario reputation,” they write.

McLachlin, in dissent, disagreed with Côté on the undertaking issue, noting that, “subsequent representations and undertakings that limit the scope of the plaintiff’s action are relevant to the overall determination,” the article says.

“She also found that [the plaintiff’s] undertaking ensures that there will be no conflicting decisions and that there is no risk of a multiplicity of proceedings since [he] took the position before the court that 'it would be an abuse of process for him to sue in another jurisdiction,’” Winkler and Pond write.

“Critical of Justice Côté’s overly formalistic approach, Chief Justice McLachlin found that Justice Côté’s parsing of each line of the claim in ‘an effort to show that his concern about his business reputation in Canada is simply an afterthought’ ignores those parts of the amended claim that connect [the plaintiff] and the article with Ontario and discounts the undertaking provided by [him] to limit his claim to his Canadian reputation,” they say.

Côté’s refusal to allow the plaintiff’s undertaking to narrow the scope of his pleading had a significant impact on her Honour’s approach to the fairness factor in the forum non conveniens analysis, the article says.

Côté found that the motion judge erred by failing to consider the plaintiff’s “significant reputation in Israel” as his claim was never limited to damages sustained to “his reputation in Ontario or to statements pertaining to his business in Ontario,” Winkler and Pond write.

“Indeed, Justice Côté refers back to the amended claim, which confirms that [the plaintiff] ‘saw himself as enjoying a significant reputation in Israel.’ Referring back to the amended claim, Justice Côté found that [the plaintiff] ‘would suffer no significant unfairness by having to bring a libel claim in Israel for comments that were written and researched in Israel and that pertain primarily to his reputation and business in that jurisdiction,’” they write.

McLachlin disagreed, finding that fairness “strongly supports allowing [the plaintiff] to vindicate his reputation in the jurisdiction where he maintains his reputation, and where the sting of the article was felt by him” and his “reputation in Israel is not material to the analysis,” the article says.

Winkler and Pond say it’s important to note, as McLachlin did, that this was not a forum-shopping case and the plaintiff’s action was not an abuse of process. The man, a long-time resident of Ontario with business interest there, brought a legitimate claim and it was reasonably foreseeable that the newspaper would have to answer the claim in Ontario when it decided to publish the alleged defamatory statements, they point out.

“Given the plurality of reasons in this case, it is unlikely to be the last word on multi-jurisdictional internet defamation issues,” they write. “The clear lesson from this decision is that the statement of claim must focus on a plaintiff’s Canadian reputation and the damage to it in Canada. This focused approach will serve to ensure that a plaintiff is able to vindicate his or her reputation in the chosen forum.”

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