Ontario Court of Appeal allows Conrad Black’s defamation actions to proceed in Ontario

The recent Ontario Court of Appeal decision in Black v. Breeden, 2010 ONCA 547  confirms a liberal judicial approach to assuming jurisdiction in internet-based libel actions.
In Black v. Breeden, Lord Black of Crossharbour 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. The motion judge 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 wre 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 had 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. As discussed previously here, here and here, the Ontario Court of Appeal modified and reformulated the Muscutt test 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.
The Court of Appeal decision attempts to reconcile the prior inconsistency inherent in the Muscutt factors with the new formulation of the Van Breda test. As I wrote  previously in a post entitled “Defamation on Web 2.0“:
“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, U.K.: Cambridge University Press, 2007)] at 112-113). Of course, there are often thorny jurisdictional issues if the defendant challenges the plaintiff’s chosen forum on the grounds that the local court lacks a “real and substantial connection” to the parties or the subject-matter of the dispute, or, alternatively, that there is another more convenient forum elsewhere based upon the doctrine of forum non conveniens. Moreover, choice of law issues may also be problematic depending on the nature of the plaintiff’s claim (i.e. contract, tort, unjust enrichment, etc.)

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 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. Karakatsanis JA. takes a different view and notes:
“[32]     Black submits that a real and substantial connection is presumed to exist because the claim falls under r. 17.02(g). The motion judge, although not performing the analysis described in Van Breda, found that the alleged tort was committed in Ontario. I see no basis to interfere with this conclusion.
[33]      The motion judge rejected the defendants’ characterization of the claims as being about the governance of a U.S. company in accordance with U.S. law. He stated that, properly characterized, the claims were for defamation committed and damages sustained in Ontario. On the law of defamation, the motion judge explained at para. 35:
The case law is clear that the heart of a libel action is publication. The tort of defamation is committed where the publication takes place. Publication occurs when the words are heard, read or downloaded. The statements in question may well have been made in the U.S. by the directors or advisors of a U.S. company, but they were published or republished in Ontario and they are alleged to have caused injury in Ontario. The connection between the subject matter of the actions and Ontario is thus significant. [Footnotes omitted.]
[34]     The defendants submit that the statements in question were all made in the United States, primarily in New York; although Black pleads republication in Ontario, the republication was not made by the defendants. They take the position that the alleged tort was not committed in Ontario and American libel law would apply.
[35]     The defendants submit that treating the lex loci delicti as the place in which allegedly defamatory statements were accessed is inappropriate in the context of Internet libel. An approach that looks to where the statements were accessed, they argue, is contrary to the principles of order and fairness, leads to libel tourism and the prospect of unlimited liability and has a chilling effect on freedom of speech.
[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.”
The learned justice continues,
[41]     Alternatively, the defendants submit that in the context of the Internet, downloading was merely the ‘completion’ of the tort, suggesting that the tort could be committed in more than one jurisdiction. They suggest that where a tort can be committed in more than one jurisdiction, this court create an exception to the presumption of real and substantial connection. However, in my view, it is unnecessary to create a new exception in order to address principles of fairness and order or jurisdictional restraint.
[42]     As a claim “in respect of a tort committed in Ontario”, a connection described in r. 17.02(g), there is a presumption of a connection to Ontario for the purpose of establishing jurisdiction. This presumption is not conclusive; it remains open to the defendants rebut the presumption and to show that in these particular circumstances there is no real and substantial connection with Ontario.”
The Supreme Court of Canada may have some concerns with the Ontario Court of Appeal’s approach in using a product liability case (Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393) as an analog for establishing jurisdiction in an internet defamation action:
“[56]     In my view, the motion judge’s analogy to the approach in product liability cases, as found in Moran was appropriate in the circumstances of this case. In Moran, Dickson J. noted at p. 409:
By tendering his products in the market place directly or through normal distributive channels, a manufacturer ought to assume the burden of defending those products wherever they cause harm as long as the forum into which the manufacturer is taken is one that he reasonably ought to have had in his contemplation when he so tendered his goods.
[57]     As noted by the motion judge, this approach has been mirrored in Internet defamation cases. In Barrick Gold Corp. v. Blanchard and Co. (2003), 9 B.L.R. (4th) 316 (Ont. S.C.), Nordheimer J. stated at para. 44:
If a person issues a statement and places that statement in a normal distribution channel designed for media attention and publication, a person ought to assume the burden of defending those statements, wherever they may damage the reputation of the target of those statements and thereby cause the target harm, as long as that harm occurred in a place that the originator of the statements ought reasonably to have had in … contemplation when the statements were issued.
[58]     While the defendants suggest it is unfair to make foreign defendants defend themselves in a jurisdiction to which the statements were not directed, in fact, as indicated above, there is clear evidence in this case that the press releases were directed to Canadian media.”
 It also appears that fairness has taken on a renewed sense of vigour in the Ontario Court of Appeal’s jurisdictional analysis:
[72]     This case involves international defendants and activities, suggesting caution and restraint. However, I agree with the motion judge that even if the Ontario judgment is unenforceable in the United States, a judgment would have significant value to Black as a vindication of his Ontario reputation. It would also be enforceable against the resident defendant. The unwillingness of American courts to enforce a foreign libel judgment that is contrary to the actual malice rule, is based upon their constitutional guarantees and as such does not raise comity as an issue: see Bangoura at para. 39.
[73]     The defendants submit that the motion judge erred in failing to refer to jurisdictional restraint. Just as unfairness does not amount to an independent factor capable of trumping the want of a real and substantial connection, I am not persuaded that jurisdictional restraint is a free standing principle that could defeat jurisdiction where there is a real and substantial connection. The “core” real and substantial connection test, informed by the principle of fairness and the other considerations in Van Breda, results in jurisdictional restraint. As explained by the court in Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon, [1994] 3 S.C.R. 1022, at p. 1049, the real and substantial connection test “has the effect of preventing a court from unduly entering into matters in which the jurisdiction in which it is located has little interest”: see also Van Breda at para. 45.
[74]     In the circumstances of this case, the general principles support a real and substantial connection of Black’s claims and the defendants to the forum and respect the principles of fairness and order, as well as, the general principles listed in Van Breda.
[75]     Finally, I do not agree that the motion judge engage in a mechanical tallying of the factors. In para. 80 of his reasons, he was simply summarizing his findings. It is clear throughout that he was alive to the need to be flexible and focussed upon the connections to the forum and respect for the principles of fairness and order.
Did anyone else catch the hyperbaton from “order and fairness” to “fairness and order”?  In Hunt v. T & N plc, [1993] 109 D.L.R.4th 16 (S.C.C.)Justice La Forest stated that the assessment of the “reasonableness” of a foreign court’s assumption of jurisdiction was not a mechanical accounting of connections between a case and a territory, but a decision “guided by the requirements of order and fairness.” (Hunt v. T& N plc, at 42). More pointedly, Justice La Forest in Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon [1994] 3 S.C.R. 1022, (1994) 120 D.L.R. (4th) 289 at 311 wrote:
“…it may be unfortunate for a plaintiff that he or she was the victim of a tort in one jurisdiction rather than another and so be unable to claim as much compensation as if it had occurred in another jurisdiction.  But such differences are a concomitant of the territoriality principle.  While, no doubt, as was observed in Morguard, the underlying principles of private international law are order and fairness, order comes first.  Order is a precondition to justice.” [emphasis added] 

Finally, with respect to forum non conveniens, 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.”

 It will be interesting to see how the Supreme Court of Canada views the reformulated Van Breda test in the upcoming appeal. In the meantime, there are a couple of lessons  to take away from the Black v. Breeden 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.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: