Ontario court has jurisdiction over internet defamation action

In a brief endorsement, the Court of Appeal for Ontario has upheld a lower court decision assuming jurisdiction in an internet defamation action:  Banro Corporation v. Les Éditions Écosociété Inc., 2010 ONCA 416 (per Weiler, Blair and Rouleau JJ.A)  affirming Banro Corporation v. Éditions Écosociété Inc., 2009 CanLII 7168 (ON S.C.) (per Roberts, J.).

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.”

Some critics might suggest that the learned justices are “gilding the lily” and that the Van Breda reformulation of the Muscutt test factors adds little in guiding litigants or providing certainty or predictability.

No matter. Justice Roberts in 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.

With respect to the discretionary forum non conveniens test,Justice Roberts applied the the reasoning of the Court of Appeal in Young v. Tyco International of Canada Ltd., 2008 ONCA 709 (CanLII), 2008 ONCA 709, at paras. 28 to 34, which expressed the following three principles as as guide to the exercise of discretion:

1.         On a forum non conveniens motion, the standard to displace the plaintiff’s chosen jurisdiction is high.  The existence of a more appropriate forum must be clearly established by the defendant to displace the forum selected by the plaintiff.

2.         The balancing of the relevant factors should aim to achieve the twin goals of efficiency and justice.  As noted above, there must be some other forum more convenient and appropriate for the pursuit of the action and for securing the ends of justice.

3.         As noted above, I should avoid drawing conclusions or making findings on important factual or legal disputes relating to the merits.  My assessment and weighing of the forum non conveniens factors should be based on the plaintiff’s claim, if it has a reasonable basis in the record, not on the defendants’ defence to that claim.

Unlike a recent decision to the contrary (in which I was plaintiff’s co-counsel), the motion judge in Banro takes the correct jurisdictional approach to internet defamation cases, noting,

[63]      In the case of a multi-jurisdiction defamation action, the publication of the allegedly defamatory material in the plaintiff’s home jurisdiction is an important factor in the application of the test of forum conveniens, as it is important to the plaintiff to seek to clear its good name where it is resident:  Direct Energy Marketing Ltd. v. Hillson, [1999] A.J. No. 695 (Alta.Q.B.), at paras. 9, 17 and 18.

[64]      The defendants contend that the distribution of 93 copies of Noir Canada is immaterial and that the trial should be heard in Quebec where the large majority of the copies were distributed.

[65]      That fewer copies of the book have been distributed in Ontario than Quebec is not conclusive of the issue of damage to reputation and the ability of the person allegedly defamed to clear its good name.  (Harrods Limited v. Dow Jones & Company Inc. 2003 WL 21162160 (QBD), [2003] EWHC 1162, at paras 37 to 39) This is particularly true where the distribution takes place in the home jurisdiction of the person allegedly defamed where the damage to that person’s reputation may be the greatest.  As noted above, the plaintiff’s reputation in Ontario is of great importance to the plaintiff.

As Justice Roberts correctly observes,

“The law to be applied to a tort is the lex loci delicti, or law of the place where the activity occurred.  In actions for defamation, the applicable law is the law of the jurisdiction where the publications were received or accessed.  (Trizec Properties, Inc. v. Citigroup Global Markets, Inc., supra, at para. 63)  As noted above, Noir Canada was distributed and accessed in Ontario.  As a result, the applicable law would be the law of Ontario.”

Unsurprisingly, the Court of Appeal agreed,

[3]               Nor do we see any error in principle or misapplication of the facts in the exercise of her discretion with respect to the forum non conveniens analysis.  There is therefore no basis for interfering with that decision.  Even accepting Mr. McDowell’s submission that the effect of Grant v. Torstar, [2009] 3 S.C.R. 640 and Cusson v. Quan, [2009] 3 S.C.R. 712 is at least to attenuate the juridical advantage point (without determining that issue), there were sufficient other bases in the record to support the forum non conveniens decision.


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