SCC wrestles with scope of harm in online libel case

OTTAWA — Canada’s highest court should prepare for consequences wrought on Canadian media in other countries, if it determines that a libel case — based on a foreign news article read by Canadians over the internet — can be tried in an Ontario court, the Supreme Court heard Wednesday. In that case, “newspapers in Canada, like newspapers around the world, adopting a Canadian approach to jurisdiction will face the spectre of crippling lawsuits brought against them in places where they have no connection whatsoever,” Paul Schabas, lawyer for Israel-based newspaper Haaretz, argued in front of the Supreme Court of Canada on Wednesday. At the heart of the case is Canadian billionaire Mitchell Goldhar, who owns the SmartCentres commercial real estate developer in the country. Goldhar brought a defamation suit in Ontario against Haaretz, over a 2011 profile entitled “Long-distance Operator.” The article allegedly criticized Goldhar for his management of Israeli soccer team Maccabi Tel Aviv, which he owns. The article notes that his management style was “imported directly” from how he operates his businesses. “Within the club, however, there are those who believe that Goldhar’s managerial culture is based on overconcentration bordering on megalomania, penny-pinching and a lack of long-term planning,” the English-language article, which is still viewable online, subsequently said. Goldhar, who has a residence in Israel, won a decision in Ontario’s highest court to trial the case in the province. But Haaretz appealed to the SCC, arguing the Canadian court does not have jurisdiction and that Israel was a more appropriate forum. “The connecting factor, which would be in Canada is not a reliable basis to presume a real and substantial connection” to the jurisdiction, Schabas said Wednesday. In Haaretz’ submission to the court, lawyers noted that in the eight months after the article’s posting online, there were “just over 200 ‘unique’ visits,” suggesting “very limited interest” in Canada. It added that no print versions of the article were distributed in Canada. It warned that the principles of “comity” and reciprocity would require that Canadian courts recognize the jurisdiction of foreign courts over Canadian defendants in similar “tenuous situations.” As a result, “Canadian media may be exposed to law suits in an unlimited number of jurisdictions, and Canadian-based speech may become subject to laws less friendly to free expression, creating ‘libel chill,’” the submission added. But lawyers for Goldhar characterized the Canadian audience that was exposed to the article as “significant” in their own submission to the court, further arguing that the article became known among those who worked at Goldhar’s SmartCentres’ headquarters. The fact that the article was read in Ontario “created a presumption of jurisdiction,” Goldhar’s counsel said. They further argued that the other side fails to “recognize that the internet is not only a powerful tool for the free exchange of ideas, but also a powerful weapon for the destruction of reputations.” The SCC wrestled with the issue of when harm to reputation occurs in the instance that a piece of allegedly harmful material is available for download. The judges also analyzed the logistical issue of having witnesses to the proceeding traveling from Israel to Ontario for the hearing, if the court decides in that direction, which Schabas argued would be costly and impractical. On that note, Schabas said Goldhar was engaging in “forum shopping,” wherein wealthy litigants can choose whichever forum they want to sue. Goldhar’s representatives rejected this argument. “Canada’s laws unreasonably favour and are out of step with the modern approaches adopted” in other countries, Schabas said. But Justice Michael Moldaver challenged the argument, suggesting that Goldhar is "very connected to Ontario" and does not appear to be a forum shopper in his view. Schabas said Goldhar didn't provide evidence showing harm to his reputation in Ontario. Furthermore, he added, because he has a "huge connection" to Israel, it's not unfair for him to bring the action to an Israeli court. The case comes mere weeks after a California court ruled that Alphabet Inc.’s Google does not have to comply with an order by the SCC to de-index search results in the United States emerging from an intellectual property infringement case. Following that Equustek decision, University of Ottawa law professor Jeremy de Beer told the Wire Report that the decision was “not surprising at all” because the SCC did not give full attention to how other jurisdictions, such as the California court, would size up the decision with their own laws. De Beer noted that the Haaretz case would give the SCC an opportunity to take another look at those arguments. He appeared before the court Wednesday, acting for intervenor Canadian Internet Policy and Public Interest Clinic (CIPPIC), and laid out those considerations in the five-minute time allotted for the intervention. “CIPPIC is concerned that the court’s decision in Equustek may entice forum shoppers to come to Canada seeking extraterritorial remedies or remedies with extraterritorial effect, global de-listing orders, places with otherwise tenuous connections to Canada,” de Beer argued in court. CIPPIC said in its written submission that while the internet has raised concerns about access to justice for vulnerable groups, such as those of cyber violence, it has also increased the ability to “forum shop merely for juridical advantage.” So “an overly lax approach to internet jurisdiction may open the door to disorderly misuse and overcrowding of our courts,” the group argued. One remedy for that, it argued, is for the court to take a careful look at why an Equustek ruling may be sought. The Haaretz case joins nearly a handful of other cases either before or resolved by Canadian courts involving the internet and extraterritorial jurisdiction, including Equustek, Douez and Globe24h. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Bryson Masse at bmasse@thewirereport.ca

SCC wrestles with scope of harm in online libel case

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SCC wrestles with scope of harm in online libel case

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