A Canadian Perspective on Libel Tourism – Antonin I. Pribetic

As with most Commonwealth jurisdictions, Canada (except the province of Quebec) has followed the English law of defamation. For this reason alone, Canadian journalists, bloggers and defamation lawyers, should take note of the recent tabling of the U.K. Government’s Draft Defamation Bill, which will undoubtedly have some impact on how Canadian defamation law in the digital age responds to the tension between freedom of expression on the one hand, and the protection of reputation and privacy, on the other. Clause 7 of Draft Defamation Bill – which deals with jurisdiction – is of particular interest and reads in part:

“Action against a person not domiciled in the UK or a Member State etc

(1) This section applies to an action for defamation against a person who is not domiciled—

(a) in the United Kingdom;

(b) in another Member State; or

(c) in a state which is for the time being a contracting party to the Lugano Convention.

(2) A court does not have jurisdiction to hear and determine an action to which this section applies unless the court is satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement…. [emphasis added]

The question of what constitutes “clearly the most appropriate place” to bring an action for defamation in an English court is an issue that Canadian courts have similarly struggled with in recent years.  Those familiar with the current “libel tourism” debate – either in the UK or the US – should take note of two recent Canadian decisions: Black v. Breeden, 2010 ONCA 547 and Banro Corporation v. Les Éditions Écosociété Inc, 2010 ONCA 416 (per Weiler, Blair and Rouleau JJ.A) , both of which were argued before the Supreme Court of Canada this week.

Black v. Breeden

In Black v. Breeden, the Court of Appeal for Ontario confirmed a liberal judicial approach to assuming jurisdiction in internet-based libel actions.  The case involves Conrad Black, Lord Black of Crossharbour, who filed six libel actions in Ontario in respect of statements posted on the Hollinger International website. The defendants in the actions were directors, advisors and a vice president of Hollinger, a publicly traded company headquartered in Chicago.

Black, who was formerly chairman of Hollinger, alleged that press releases and reports issued by the defendants contained defamatory statements which were downloaded, read and republished in Ontario by The Globe and Mail, the Toronto Star, and the National Post, and damaged his reputation in Ontario. The defendants moved to stay the actions on the ground that the Ontario court did not have jurisdiction, or alternatively that Ontario was not the convenient forum. The defendants argued that there was no real and substantial connection between Ontario and the actions, and that the more convenient forum was either New York or Illinois.

The motion judge, Belobaba, J. disagreed and dismissed the defendants’ motion and held that the Ontario court had jurisdiction over the actions and Ontario was the convenient and appropriate forum. While the statements in question may have been made in the United States, they were republished in Ontario and were alleged to have caused injury to Lord Black’s reputation in Ontario. The connection between Lord Black and Ontario was significant and he had long-standing ties to Ontario (albeit he had renounced his Canadian citizenship in favour of British citizenship to receive his peerage). The American defendants were connected to Ontario as it was reasonably foreseeable to them that the allegedly defamatory press releases would be downloaded and published in Ontario and would result in damage to Lord Black’s reputation in Ontario. The defendants appealed.

Mr. Justice Belobaba applied the test for assumed jurisdiction as set out in Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (C.A.) in the context of an Internet-based libel action, which the Ontario Court of Appeal recently modified and reformulated in Van Breda v. Village Resorts Limited (2010), 98 O.R. (3d) 721 (C.A.) (leave to appeal to S.C.C. granted, [2010] S.C.C.A. No. 174). The hearing of the appeal was deferred pending the release of the reasons for decision in Van Breda.

Writing for the unanimous court, Karakatsanis JA. (Doherty, Juriansz JJ.A. concurring) held that the motion judge did not err in finding that the alleged tort was committed in Ontario. There was evidence that the defendants targeted and directed their statements to the Ontario jurisdiction. The press releases posted on the Internet specifically provided contact information for Canadian media, as well as American and UK media outlets. The contact information for Canadian media clearly anticipated that the statements would be read by a Canadian audience and invited comments from Canadian media. The facts relevant to Black’s claim relating to publication in Ontario and the damage to Lord Black’s Ontario reputation formed a significant connection between the subject-matter of Black’s claims and Ontario. Accordingly, the motion judge did not err in finding that there was a real and substantial connection between Lord Black’s claim and Ontario or in finding that that there was a connection between the defendants and Ontario. Moreover, as Lord Black’s claims related to statements published in Ontario and his undertaking to not commence defamation actions elsewhere, the motion judge correctly concluded that it would be unfair to deprive him of a trial before the community in which his reputation had been damaged. In addition, there was no unfairness to hold the defendants accountable for the accuracy of statements that were widely disseminated over the Internet and specifically directed to Canadian media. The motion judge correctly concluded that Ontario was a convenient and appropriate forum, and that neither New York, Illinois, nor any other American jurisdiction was clearly more appropriate.

Under Canadian, Australian and English common law, a transnational defamation dispute is generally heard within the territory or location of the defamation, or where the defamed person suffered damages to his or her personal and/or business reputation (the “lex loci delicti” or the law of the place of the wrong) (Uta Kohl, Jurisdiction and the Internet: Regulatory Competence over Online Activity (Cambridge University Press, 2007) at 112-113).  Anyone who republishes a defamatory statement, or facilitates its publication to the public (electronic or otherwise), may be liable for per se damages for injury to reputation ( and subject to an injunction (a court order enjoining or prohibiting continued republication, such as ordering a webmaster to remove the alleged defamatory postings) and adverse cost consequences. As Raymond E. Brown, in his leading text, The Law of Defamation in Canada, 2nd ed. (1999) puts it:

“Jurisdiction may … be exercised even though the defendant’s website is located in the foreign jurisdiction … where the republication of the defamatory material in the jurisdiction where the plaintiff resides [or where he resided or has a reputation] is the natural and probable consequence of the posting elsewhere.”

In my view, the Black v. Breeden case was correctly decided. However, the Van Breda test does not fit well with internet-based libel actions. The presumption of a real and substantial connection on the ground that the case falls within a connection specified in r. 17.02 of the Ontario Rules of Civil Procedure is problematic. The default choice of law rule should not be the “lex loci delictii commissii” (the law of the place where the tort is committed) but rather, the lex loci protectionis (vindicatio)” (the law of the place where the protection is claimed or reputation vindicated). In the present case, Lord Black sought protection or vindication of his reputation in Ontario.

According to the Ontario Court of Appeal:

[36]     The defendants advocate a different approach to a claim for libel originating on the Internet. They suggest that the focus of the analysis of where the tort of Internet libel is committed should be on whether the defendant targeted the statements to the forum rather than where they were downloaded and read.

[37]     In support of the “targeting analysis” advocated, the defendants cite M. Geist, “Is There a There There? Toward Greater Certainty for Internet Jurisdiction” (2001), 16 Berkeley Tec. L.J. 1345, at 1380 and the case of Young v. New Haven Advocate, 315 F.3d 256, at 262-63 (4th Cir. 2002). In Young, the United States Court of Appeals for the 4th Circuit concluded that two Connecticut newspapers did not subject themselves to the jurisdiction of Virginia courts by posting on the Internet news articles that allegedly defamed the warden of a Virginia prison. The court explained at p. 263: “Something more than posting and accessibility is needed to ‘indicate that the [newspapers] purposefully (albeit electronically) directed [their] activity in a substantial way to the forum state’, Virginia. The newspapers must, through the Internet postings, manifest intent to target and focus on Virginia readers” (citations omitted).”

The fundamental problem with not adopting “targeting analysis” is the fact that the internet is ubiquitous. It has no physical presence. It is quintessentially “here, there and everywhere”. As noted in the recent OBA Submission to the Advisory Panel on Anti-SLAPP Legislation:

“In the Internet age, the Act should clearly define its jurisdiction. Forum-shopping and libel tourism are two criticisms of SLAPP suits. The issues of jurisdiction simpliciter and forum non conveniens relating to online defamation claims involving websites, message boards, and other non-traditional media need to be considered in this draft legislation [particularly since the SCC has granted leave in Van Breda v. Village Resorts Ltd. (Ont. C.A.)}. For example, if Company A (resident in the US) sues Ontario residents in Ontario relating to alleged defamatory postings on a website whose server is in the UK, on what basis does an Ontario court have jurisdiction over the claim? The Libel and Slander Act is unclear whether the defamatory statements were made in Ontario (where the alleged defamers reside) or in another jurisdiction (where the website’s server is located). Further, intermediary liability is also an issue (see Crookes v. Newton BCCA) leave to appeal to SCC granted.”

With respect to the discretionary forum non conveniens test, Justice Karakatsanis concludes,

“[86]     I agree with the motion judge that it is not appropriate to label it forum shopping or libel tourism if the party has a real and substantial connection with the forum: see Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897, at p. 920. Further, even if the judgment is not enforceable in the United States, it is enforceable in Ontario, and there is also value in the vindication of a defamation judgment regardless of the ability to collect damages.

[87]     Given the significance of the loss of juridical advantage to Black, I am not persuaded that the motion judge erred in the exercise of his discretion.

[88]     I am not persuaded that it was unreasonable to conclude that neither New York nor Chicago were clearly a more appropriate forum for these actions than Ontario. While this certainly was not a clear cut case, it was a discretionary decision and I see no error in principle that would justify interference.”

Banro Corporation v. Les Éditions Écosociété Inc.

In Banro Corporation, the plaintiff, an Ontario gold exploration company action sued  for defamation over the publication of statements concerning the plaintiff in a book entitled, “Noir Canada Pillage, corruption et criminalité en Afrique” (“Noir Canada”), which was written in French, published by the defendant, Les Éditions Écosociété Inc. (“Écosociété”), authored by the defendant, Alain Deneault, with the research and editing assistance of the defendants, Delphine Abadie and William Sacher and promoted on various websites and in a speech as part of a book signing tour in Ontario.

The per curiam decision notes that,

“[1]               Although the Muscutt mechanics of the test for jurisdiction simpliciter were clarified and modified in Van Breda, the foundation of the test for assuming jurisdiction (whether there is a real and substantial connection between the Ontario court and the claim) remains the same.

[2]               In our view, whether the Muscutt or Van Breda principles are applied, the decision of Justice Roberts remains sound.  There is ample support in the record for her conclusion that there is a real and substantial connection in this case.”

The lower court decision provides a useful summary of the relevant authorities on establishing jurisdiction simpliciter in internet defamation cases:

“[23]           The tort of defamation is not complete until publication.  Publication occurs where it is received, for example, where it is downloaded from the internet or where a book is read.  It is not necessary in every case that the plaintiff prove directly that the words were brought to the attention of some third person.  It may be shown by circumstantial evidence.  Publication is presumed in all cases involving a book.  (See:  The Law of Defamation in Canada, 2d ed., Raymond E. Brown, pp. 7-59, 7-60 and 7-113.)

[24]           The defendants contend that the statements are not defamatory and that the plaintiff has failed to provide proof of any damage to its reputation at this point.  As a result, the defendants argue that there is no real and substantial connection with Ontario.  I disagree.

[25]      First, on a motion concerning the issue of jurisdiction, as also noted below, it is not necessary that the plaintiff prove its claim at this stage.  The motions court judge should not decide the merits of the claim for the purpose of determining jurisdiction; the plaintiff’s claim is to be taken at face value:  Young v. Tyco International of Canada Ltd., 2008 ONCA 709 (CanLII), 2008 ONCA 709, at para. 37.

[26]      Second, it is my view that the plaintiff has pleaded sufficient facts to support the allegations of defamation.  Without determining their veracity, the allegations in question suggest that the plaintiff has been involved in fraudulent and other legally questionable activities.  As such, they seriously impugn the reputation of the plaintiff.  It has long been held that general damages in defamation cases are presumed from the very publication of the false statement and are awarded at large:  Hill v. Church of Scientology, 1995 CanLII 59 (S.C.C.), [1995] 2 S.C.R. 1130, at para. 164.

[27]      Finally, it is recognized in defamation cases that the vindication of one’s reputation is as important as any monetary award of damages that might be obtained.  The plaintiff may be quite content with a declaration by a court in Ontario that the statements made by the defendants are untrue even if it cannot recover any damages that might be awarded to it as a consequence.  (Barrick Gold Corp. v. Blanchard and Co., [2003] O.J. No. 5817 (Ont. S.C.J.))

[28]      While the plaintiff is an international company, the plaintiff’s evidence establishes that its reputation in Ontario is of great importance to the plaintiff.  Through the affidavit of Martin Jones, the Vice President, Corporate Development of the plaintiff, sworn September 16, 2008, and filed in response to the defendants’ motion, the plaintiff sets out the importance of its reputation in Ontario as follows:

“As a leading global mineral exploration and development company, the plaintiff has a particularly high profile in Ontario where many of the world’s mining companies are incorporated and/or have their head offices.  The plaintiff treats this enviable reputation as one of its most highly valued assets and seeks to protect it.  The plaintiff relies on its good reputation to attract potential investors, to satisfy and reassure existing shareholders, and to profitably carry on its business.  Its good reputation is also critical to its dealings with its many regulators, including the Toronto Stock Exchange, the Ontario Securities Commission and the other Canadian securities commissions, the Securities and Exchange Commission in the United States, as well as the national and local governments it deals with on an ongoing basis.”

[29]      In the course of his cross-examination, Mr. Deneault conceded that he was aware that the plaintiff’s reputation is very important to its ability to conduct business.”

The U.S. SPEECH Act

The U.S. “Securing the Protection of our Enduring and Established Constitutional Heritage Act” (viz. SPEECH Act” s. 3518) which President Obama recently signed into law represents a retreat from judicial comity, back to judicial isolationism. The SPEECH Act is essentially a blocking statute that restricts enforcement of foreign libel judgments (particularly English libel judgments) in the U.S. rendered against American publishers, journalists and academics unless they meet American First Amendment standards of free speech and freedom of the press.

The irony is that it rather than an English libel judgment, it seems a Canadian libel judgment will  be the first to be challenged under the SPEECH Act.

In Mina Mar Group Inc. v. Divine, 2011 ONSC 1172 (CanLII) the plaintiffs, Mina Mar Group Inc., a Toronto-based investor relations services, and its principal Miro Zecevic,  successfully moved for a partial default judgment for internet defamation against New Jersey based Defendants, James Divine and Catherine Divine, both of whom were noted in default. Under the Ontario Rules of Civil Procedure, pursuant to rule 19.02 (1), a defendant who has been noted in default is deemed to admit the truth of all allegations of fact made in the statement of claim. The nature of the action is summarized by Justice Perell as follows:

[5]                Beginning in 2006 and continuing to date, by profuse postings on Internet bulletin boards and websites, particularly the website of InvestorsHub.com Inc., the Defendants, James Divine and Catherine Divine have frequently defamed Mino Mar and Mr. Zecevic. The Defendants’ postings, which are authored under the pseudo name of “Stratey” describe the plaintiffs as thieves, crooks, sham artists, liars, dishonest, corrupt, incompetent, and immoral.

[6]               As a consequence of the defamatory statements, Mina Mar has lost clients and opportunities for new clients.

[7]               Mina Mar and Mr. Zecevic demanded that the Divines withdraw their postings and apologize, but the Divines refused to do so.

[8]               On this motion for a partial default judgment, reserving their right to claim special damages (its pecuniary losses) by setting the action down for a trial for an assessment of their business and other losses, Mina Mar and Mr. Zecevic seek general damages, punitive damages, and injunctive relief.”

After a comprehensive review of Canadian damage awards for internet defamation, Perell J. awarded the Plaintiffs $50,000 for general damage and if the plaintiffs abandon their outstanding claim for special damages, held that an award of $25,000 for punitive damages would be appropriate. The court also granted a permanent injunction restraining the Defendants from disseminating, posting on the Internet or publishing further defamatory statements concerning the plaintiffs, plus costs.

According to one report, the co-defendant, InvestorsHub.com Inc. (“iHub”), which owns and operates the website where the defamatory statements were posted, settled with the plaintiffs by posting an apology. A December 2010 letter from InvestorsHub to Mina Mar, posted on Mina Mar’s website, states:

“In compliance with the Judgment of the Ontario Superior Court, InvestorsHub.com Inc. (‘IHub’) hereby apologizes to Mina Mar Group Inc., Mina Mar Group Inc. (of the USA) and Miro Zecevic for defamatory postings authored by third parties not affiliated with iHub that appeared on the iHub website.”

Rather than challenging the Ontario court’s jurisdiction at first instance, iHub previously brought a declaratory judgment action against Mina Mar and Zecevic in Florida which was dismissed without prejudice for lack of subject-matter/diversity jurisdiction.

In a subsequently filed federal complaint, iHub, along with its former president Robert Zumbrunnen and former employee, Matthew Brown, accused Mina Mar Canada (and its US affiliate)  and Zecevic of engaging in “libel tourism” , alleging that  “Canada provides less protection for free speech than United States and Florida law.”. The Canadian defendants have filed an Answer and Affirmative Defenses denying the libel tourism allegation and asserting estoppel arising from the prior settlement and online apology.  Given that a Florida court has previously declined jurisdiction over the parties and Canadian standards for freedom of speech are likely within the purview of First Amendment standards, the failure to challenge the Ontario court’s jurisdiction at first instance may prove fatal for iHub. Hopefully, the Florida court will make a pronouncement of whether the SPEECH Act First Amendment requirements have been met by a Canadian court.

Conclusion

It will be interesting to see how the Supreme Court of Canada deals with the reformulated Van Breda test in the Black v. Breeden and Banro Corporation appeals. In the meantime, there are a couple of lessons to take away from Lord Black’s case: First, “always bet on Black”; even a convicted felon (albeit his “honest services” fraud convictions were recently overturned by the U.S. Supreme Court) has a right to seek vindication of his reputation. Second, it’s always best to avoid issuing press releases which contain potentially defamatory statements, but if you feel compelled to do so, then try to not target Canadian media outlets.

Antonin I. Pribetic is Litigation Counsel at the law firm of Steinberg Morton Hope & Israel LLP in Toronto, Ontario, Canada and author of the The Trial Warrior Blog. All opinions expressed are his own.