News: Canada Rolls Out Welcome Mat for Libel Tourists – Paul B. Schabas and Erin Hoult

18 04 2012

The Supreme Court of Canada today released two decisions regarding assumed jurisdiction in defamation matters that leave the door to libel tourism wide-open in Canada.  The two cases – Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18 and Breeden v. Black, 2012 SCC 19 – involve defamation suits commenced in Ontario against non-resident defendants.

Breeden v Black involves defamation lawsuits brought Conrad Black, the former chairman of Hollinger International, and a British peer, against members of a special committee that issued press releases and a report to the United States Securities and Exchange Commission regarding Black’s tenure at Hollinger.

In Banro, an Ontario-based mining corporation sued the Quebec-based defendants in relation to an allegedly defamatory book.  The book was published in French, with nearly 5,000 copies printed.  The evidence was that 108 copies of the book were available to be purchased or read in Ontario (93 were in Ontario bookstores and 15 in Ontario libraries).  The book was also available for sale via the defendants’ website.

Like the lower courts, the Supreme Court held the Ontario courts have jurisdiction over each of the Black and Banro cases.  The Court further held that there was no reason to decline to exercise jurisdiction in either case, as the defendants had not shown there was a clearly more appropriate forum.

Without analysis, the Court confirmed that, under Canadian law, the tort of defamation “occurs” when and where a defamatory statement is published to a third party.  Further, “every repetition or republication of a defamatory statement constitutes a new publication”.  The Court held that a Canadian court has presumptive jurisdiction where a tort has “occurred” in that court’s province.  The Court explicitly rejected a jurisdictional test based on either the place of substantial publication, or based on the subject matter and conduct giving rise to the defamatory statement in issue.  Therefore, wherever a plaintiff can demonstrate that at least one copy of an allegedly defamatory publication made its way into a Canadian province, the court of that province will have presumptive jurisdiction over any non-resident defendant.

While such a presumption appears theoretically rebuttable by a defendant, the Court did not engage in any analysis in either Black or Banro as to why the presumption had not been rebutted in those cases or how a defendant might displace the presumption in a future case.

The Court also considered whether the Ontario courts should decline to exercise their presumptive jurisdiction on the basis of forum non conveniens.  In the course of that analysis, the Court made reference to concerns of forum-shopping and libel tourism.  However, such concerns appear to have held little sway in the outcomes of the cases.

For example, on the one hand, the Court stated in Black that any juridical advantage that might accrue to a plaintiff in its chosen forum (such as the more plaintiff-friendly libel laws of Canada as compared to those of the United States) “should not weigh too heavily” in the forum non conveniens analysis.  Moreover, the juridical disadvantage to defendants must also be weighed in the balance.  The Court emphasized that it is particularly inappropriate to heavily weigh a juridical advantage in favour of the plaintiff where the corresponding benefit that would accrue to the defendant in the foreign jurisdiction reflects “a deeply rooted and distinctive legal tradition” (such as American defamation law, rooted as it is in the First Amendment), which comity requires be respected.

On the other hand, in Banro the Court accepted what might be seen as the old standby of libel tourists who have suffered minimal damages in the chosen forum: that is, that a declaratory judgment may be “as valuable” to the plaintiff as any pecuniary award.

Notably, and unfortunately, the Supreme Court declined to answer one of the most pressing questions impacting transnational defamation claims – namely what substantive law should be applied to determine the claim.  Typically, the law to be applied in tort claims in Canada is that of the place of the tort (the lex loci delicti).  In Banro, the Court left open the possibility of a new rule for determining substantive law in defamation matters.  The Court suggested that the law of the place of the most substantial harm to reputation, as has been adopted in Australia by statute, may be a more appropriate choice of law rule in defamation matters.  The choice of law issue in Canadian defamation matters will therefore have to be resolved in a future case, which only adds to the uncertainty facing foreign defendants sued in Canadian defamation proceedings.

Paul Schabas and Erin Hoult, of Blake, Cassels & Graydon LLP, Toronto and Vancouver, Canada. 

The authors were counsel (with Ryder Gililand) to the appellants Richard C. Breeden and Richard C. Breeden & Co in Breeden v Black.


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23 04 2012
Law and Media Round Up – 23 April 2012 « Inforrm's Blog

[…] 2012 SCC 19 that involve defamation suits commenced in Ontario against non-resident defendants. In a comment piece published on Inforrm, Paul B. Schabas and Erin Hoult argue that they “leave the door to libel tourism wide-open in […]

23 04 2012
The Supreme Court of Canada Conflict of Laws Trilogy: Part II « THE TRIAL WARRIOR BLOG

[…] For Lord Black, the result is a Pyrrhic victory, but a victory nonetheless. As I reported previously, Conrad Black settled the libel actions , which his Canadian counsel recently confirmed in a press release. Fellow blawger, Ted Folkman has also written an insightful post on the Black decision over at Letters Blogatory. Co-counsel for the unsuccessful appellants, Richard C. Breeden and Richard C. Breeden & Co in Breeden v Black share a bit of sour grapes in a guest post at Inforrm’s Blog as well: News: Canada Rolls Out Welcome Mat for Libel Tourists. […]

28 04 2012
The Supreme Court of Canada: internet defamation, choice of law and libel tourism – Antonin I Pribetic « Inforrm's Blog

[…] For Lord Black, the result is a Pyrrhic victory (insofar he is now a convicted felon soon to be released after serving 42 months in a Florida prison on fraud and obstruction of justice charges), but a victory nonetheless. As I reported previously, Conrad Black settled the libel actions , which his Canadian counsel recently confirmed in a press release. Fellow blawger, Ted Folkman has also written an insightful post on the Black decision over at Letters Blogatory. Co-counsel for the unsuccessful appellants, Richard C. Breeden and Richard C. Breeden & Co in Breeden v Black share a bit of sour grapes in a guest post at Inforrm’s Blog as well: News: Canada Rolls Out Welcome Mat for Libel Tourists. […]

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