Canada: Jurisdiction Over Internet Defamation: Same Law, Different Facts In Haaretz v. Goldhar

Last Updated: June 11 2018
Article by Aileen Furey

On June 6, 2018, the Supreme Court of Canada considered the test for jurisdiction over an allegedly defamatory Internet article – the reputational effects of which can reach around the globe. But those who expected the Court's decision in Haaretz v. Goldhar to change the law on jurisdiction in the Internet age will be disappointed: while the defendants successfully obtained a stay on the basis that Israel was a clearly more appropriate forum, their success is attributed to the Court's fresh analysis of the facts – and not to new law. The decision leaves many (including the media) waiting for guidance on a jurisdictional test for a clearly more appropriate forum responsive to the realities of the Internet age.

Goldhar is a Canadian businessman living primarily in Ontario and known among the business who's-who for his entrepreneurial successes. He also maintains an apartment in Israel, owns its most popular soccer team and enjoys a different level of celebrity there. Haaretz is Israel's oldest daily newspaper, published in in English and Hebrew and in both print and electronically; its print circulation is about 70,000 and electronic content is available worldwide. Haaretz printed an article about Goldhar about how he runs his soccer club. Goldhar considered the article defamatory and filed a lawsuit in Ontario. Haaretz applied for a stay of the action on the basis the Ontario court didn't have jurisdiction, and even if it did, then it should not exercise that jurisdiction because Israel was a clearly more appropriate forum for the issue to be tried. Both the Ontario Superior Court of Justice and Court of Appeal found Ontario had jurisdiction and that Israel is not a clearly more appropriate forum, and denied the stay application. However, while the Supreme Court of Canada agreed Ontario had jurisdiction, it decided Israel was a clearly more appropriate forum than Ontario and a stay should be granted. The Court viewed the question simply: did the Ontario courts have jurisdiction, and if so should it decline to exercise that jurisdiction in favour of a clearly more appropriate forum? To answer it, the Court applied the same analysis using the same well-established tests – despite the new factors the Internet publication platform introduced:

Real & Substantial Connection. The Court reiterated that to establish jurisdiction, there must be a "real and substantial connection" between the subject matter of the litigation (the defamation) and the chosen forum (Ontario). Here, the fact the wrong was committed in Ontario (and anywhere else the article was read) established a presumptive connecting factor. But this presumption has always been rebuttable, particularly important in the Internet context in which, as the Court conceded, it could be easily established based on a mere click or online download. A party can still rebut the presumptive connecting factor by showing the connection between the forum and the subject matter is insufficient: despite the connection, it's not reasonable to expect the defendant to respond to proceedings commenced in the chosen forum. And the presumption must be rebutted by factors other than those in the "clearly more appropriate" forum analysis, which remains distinct. For example, the presumptive connecting factor in a defamation case is rebutted where a Plaintiff has no reputation in the chosen forum.

Clearly More Appropriate Forum. The Court also reiterated that if jurisdiction isn't rebutted, a court must next decide whether to decline to exercise that jurisdiction in favour of a clearly more appropriate forum. Pursuant to the traditional test, the defendant bears the burden of showing that another forum is clearly more appropriate because it's fairer and more efficient based on the analysis of five factors: the comparative convenience and expense for the parties and/or witnesses; fairness to both parties; loss of legitimate juridical advantage; likelihood of enforcement; and the applicable law. In this case, it was the applicable law factor where the defendant invited change. The defendant suggested that in Internet defamation cases the analysis should be guided by a "substantial harm test": the defendant shouldn't be required to defend all over the world – a real possibility in an Internet defamation case – but only where the plaintiff suffered the most harm. And since the article was about Goldhar's businesses in Israel and reached a primarily Israeli audience, that should be Israel. All judges agreed that typically, the law of the place where the tort occurred is the law that applies (lex loci delicti), and where jurisdiction arises from the location of occurrence of the tort, and lex loci delicti is applied, the applicable law factor generally favours the chosen forum. However, the judges didn't agree on whether lex loci delicti responds to the realities of Internet defamation and its inevitably multijurisdictional nature – and a majority of the Court's judges refused to adopt the substantial harm test, though were divided on why: three didn't decide whether to adopt it because in this case, there was an insufficient evidentiary basis to apply it so it wouldn't have mattered; two would adopt the test to determine the applicable law in the Internet defamation context going forward; and three point blank refused to adopt it. The Court ultimately determined that is in this case, Israel was the clearly more appropriate forum, but based on the facts – and the same old legal test.

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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