This post is the second of a two-part series of posts on the recent Canadian conflict of laws trilogy in Club Resorts Ltd. v. Van Breda, 2012 SCC  17 (“Van Breda”); Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18 (“Banro”) and Breeden v. Black, 2012 SCC 19. (“Black”) for Internet defamation, choice of law/forum shopping and libel tourism.  In an earlier post (on the Trial Warrior Blog) I discussed the the Van Breda decision and its implications to Canadian conflict of laws generally. 

The background to the lower court decisions in Banro and Black, is set out in my earlier Inforrm post on “A Canadian Perspective on Libel Tourism“.

Assuming Jurisdiction in Defamation Actions

Both the Banro and Black decisions upheld the Ontario court’s assumption of jurisdiction over the foreign defendants, based upon a restatement of the “real and substantial connection” test for tort actions. Both decisions also do not disturb the Ontario court’s rulings on forum non conveniens.

Those hoping that the Black and Banro decisions would clarify the test for assuming jurisdiction in multi-state defamation actions, particularly, those which give rise to internet defamation, will be met with disappointment.

In Black, the “New” Van Breda test as applied to defamation actions merely establishes the presumptive jurisdictional factor of the republication of the alleged libel in Ontario. Publication occurs when the impugned statements  are read, downloaded and republished in Ontario. Unlike the American single publication rule, in Canada, repetition or republication of a defamatory statement constitutes a new publication.  The original author of the statement may be held liable for the republication where it was authorized by the author or where the republication is the natural and probable result of the original publication (citing R. E. Brown, The Law of Defamation in Canada (1987), vol. 1, at pp. 253-54). As LeBel J. notes,

“In my view, the republication in the three newspapers of statements contained in press releases issued by the appellants clearly falls within the scope of this rule.  In the circumstances, the appellants have not displaced the presumption of jurisdiction that results from this connecting factor.” (at para. 20)

Similarly, in Banro, unlike the lower court and Court of Appeal, the Supreme Court downplays the significance of the promotion of the alleged libellous book, “Noir Canada Pillage, corruption et criminalité en Afrique” (“Noir Canada”), on various websites and in a speech as part of a book signing tour in Ontario. Rather, the Supreme Court held:

The motion judge’s decision to assume jurisdiction should be upheld.  When the analytical framework identified in Club Resorts is applied, it is clear that there is a real and substantial connection between Banro’s claim and Ontario [37].

Here, the alleged tort of defamation occurred in Ontario.  Noir Canada was distributed in Ontario.  At this stage of the proceedings, the plaintiff need not show evidence of harm or that the book was read.  The plaintiff need only allege publication and its allegations should be accepted as pleaded unless contradicted by evidence adduced by the defendants.  For the purposes of proving defamation, publication may be inferred when the libellous material is contained in a book that is circulated in a library; the new evidence adduced by Banro on consent establishes that 15 copies of Noir Canada were circulated in Ontario libraries and one copy was checked out.  In addition, Banro adduced evidence establishing that its reputation in Ontario is vital to conducting business, attracting investors and maintaining good relations with regulators such as the Ontario Securities Commission [38].

As discussed in Club Resorts, the commission of a tort in Ontario is a recognized presumptive connecting factor that prima facie entitles the Ontario court to assume jurisdiction over this dispute.  For the reasons discussed above, the defendants have not shown that only a minor element of the tort of defamation occurred in Ontario.  As a result, they have not displaced the presumption of jurisdiction that arises in this case [39].

On this basis, I conclude that the motion judge correctly assumed jurisdiction.  That said, it is then entirely appropriate for the respondent party in such a motion to raise the doctrine of forum non conveniens, and ask that factors that go beyond the objective connecting factors considered in the jurisdictional analysis be taken into account [40].

What is peculiar about the Supreme Court’s jurisdictional approach is the reluctance to face the issue of internet defamation in Black and Banro head-on, only obliquely suggesting in Banro that the appeal “raises difficult issues when publication occurs through the Internet, as this Court noted recently in Crookes v. Newton, 2011 SCC 47, [2011] 3 S.C.R. 269…”.

Rather that focusing on  the issue of jurisdiction in internet defamation actions—through websites, blogs and social media sites like Twitter and Facebook—LeBel J. opts to refer to the issue of  internet jurisdiction in the Van Breda decision, albeit only in obiter:

Active advertising in the jurisdiction or, for example, the fact that a Web site can be accessed from the jurisdiction would not suffice to establish that the defendant is carrying on business there. The notion of carrying on business requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office there or regularly visiting the territory of the particular jurisdiction. But the Court has not been asked in this appeal to decide whether and, if so, when e-trade in the jurisdiction would amount to a presence in the jurisdiction. With these reservations, “carrying on business” within the meaning of rule 17.02(p) may be an appropriate connecting factor. (Van Breda, at para. 87)

Based upon the foregoing, while having a website does not necessarily mean a company carries on business in the jurisdiction, allowing republication of defamatory statements on a personal or business website is sufficient for the court to assume jurisdiction.

Choice of Law and Forum Shopping/Libel Tourism

In both the Black and Banro decisions, the Supreme Court demurs in adopting a new choice of law rule for defamation actions; albeit in Banro, LeBel J. notes in passing that “one possible alternative to the lex loci delicti as the choice of law rule in defamation cases may be the place of most substantial harm to reputation.”

Whether applying the lex loci delicti rule or the locus of the most substantial harm to reputation  the applicable law was that of Ontario and this factor favoured Ontario in the forum non conveniens analysis, as did the factor of juridical advantage.

In Black, the issue of the choice of law is intertwined with considerations of fairness and loss of juridical advantage under the forum non conveniens analysis:

“This Court observed in Club Resorts that in addition to seeking to assure the efficacy of the litigation process, the doctrine of forum non conveniens also seeks to assure fairness to both parties.  The courts below agreed that the balance of fairness favours litigation in Ontario because it would be unfair to prevent Lord Black from suing in the community in which his reputation was established, whereas there would be no unfairness to the appellants if the actions were to proceed in Ontario because it would have been reasonably foreseeable to them that posting the impugned statements on the internet and targeting the Canadian media would cause damage to Lord Black’s reputation in Ontario.  I would agree, although I would also emphasize that the question of whether a targeting approach should be adopted in Canadian law does not arise on this appeal.  As discussed above, the importance of permitting a plaintiff to sue for defamation in the locality where he enjoys his reputation has long been recognized in Canadian defamation law.  Given the importance of his reputation in Ontario, this factor weighs heavily in favour of Lord Black” [36].

In Banro, Justice LeBel rejects the English “substantial publication” requirement, noting it “reflects England’s merits-based approach to the assumption of jurisdiction, which is arguably inconsistent with the Canadian approach of treating jurisdiction separately from the merits of a claim.” (Banro, at para. 55). Justice LeBel acknowledges that the problem of forum shopping has been addressed in other jurisdictions, notably Australia which enacted the Defamation Act 2005 (Qld.) to include a defamation-specific choice of law rule—”most closely connected to the harm occasioned by the publication as a whole”. However, despite similar calls for reform in Canada, the issue of adopting the proper law of the tort as a rule of conflicts in defamation cases is left for another day (Banro, at para. 60-62).

Conclusion

Although not applied or expressly approved, the Supreme Court does note the Court of Appeal’s decision in Paulsson v. Cooper, 2011 ONCA 150, 105 O.R. (3d) 28 (note: I was co-counsel for the plaintiff on the lower court motion) where the court adopted Nordheimer J.’s reasoning in Barrick Gold v. Blanchard with respect to ‘reasonable foreseeability of harm to reputation’, rather than evidence of damage to the plaintiff’s reputation, as a relevant factor in assuming jurisdiction over a foreign defendant in a defamation case, signifying a departure from the Court of Appeal’s earlier decision in Bangoura v. Washington Post (2005), 258 D.L.R. (4th) 341.

On the issue of forum non conveniens, LeBel J. reinforces the holding in Van Breda that the onus remains with the defendant to demonstrate that another jurisdiction is a “clearly more appropriate forum”. In Banro. LeBel J rejected the appellant’s arguments relating to disproportionality of costs (compared with the minimal potential for recovery for damage to reputation in Ontario); the effect of parallel proceedings; the applicability of Quebec law and comparative juridical advantage.

In Black, LeBel J. acknowledges that the courts of Illinois and Ontario were both appropriate fora for the trial of the libel actions. On the one hand, the factors of comparative convenience and expense for the parties and witnesses, location of the parties, avoidance of a multiplicity of proceedings and conflicting decisions and enforcement of judgment all favoured the Illinois court as a more appropriate forum. On the other hand, the factors of applicable law and fairness to the parties favoured the Ontario court. The determinative factor appears to be where Conrad Black’s local reputation is to be vindicated. As I  suggested in my earlier Inforrm post

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.

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.

For Banro, the defamation action may proceed in Ontario.

On the issue of forum shopping or “libel tourism”, the Ontario Bar Association has sent the Ontario Attorney General, The Honourable John Gerretsen, a gentle reminder to consider the Report of the Expert Advisory Panel on Anti-SLAPP legislation. The OBA’s submission is available here (pdf).

This post originally appeared on the Trial Warrior Blog and is reproduced with permission and thanks