Ha'aretz, founded in 1918, is Israel's oldest daily newspaper. It is published in English and Hebrew; both editions are available online.
Mitchell Goldhar is a Canadian billionaire and the owner of the Maccabi Tel Aviv Football Club – a team that plays in the Israeli Premier League.
In November 2011 Ha'aretz published an article about Goldhar, titled "Long Distance Operator". The article criticised his management practices regarding the football team. In particular, the article claimed that "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 article also suggested that Goldhar imported his management model from his main business interest – a partnership with Walmart in Canada – such that "he runs his club down to every detail".
Goldhar strenuously objected to these remarks and brought a defamation suit against Ha'aretz, its sports editor and the reporter who wrote the article in the Canadian province of Ontario.
Ha'aretz brought a motion to stay the action on the basis that:
- the courts of Ontario lacked jurisdiction simpliciter to hear the matter;
- in the alternative, Israel was a more appropriate forum for the matter; and
- in the further alternative, the lawsuit was an abuse of process.
Addressing these arguments, Goldhar's counsel argued that his client sought a jury trial, which was not available in Israel, and damages to his reputation which were suffered only in Canada. Finally, Goldhar agreed to pay the costs for Ha'aretz's witnesses to travel to Ontario to defend the action.
Dismissing Ha'aretz's motion, the motions judge found that the article had caught the attention of many of Goldhar's 200 staff members in Toronto and that 200 to 300 people in Canada were likely to have read the article online. Following the concessions made by Goldhar, the motions judge limited Goldhar's damages in the Ontario action to those suffered in Canada and formally ordered that Goldhar pay travel and accommodation costs for Ha'aretz's witnesses.
Ha'aretz appealed to the Ontario Court of Appeal.(1)
The court of appeal had to decide whether:
- the Ontario courts did indeed have jurisdiction simpliciter over the matter;
- Israel was a more appropriate forum to hear the case; and
- the lawsuit was an abuse of process.
Jurisdiction simpliciter In Club Resorts v Van Breda,(2) the Supreme Court of Canada established a two-stage 'real and substantial' test to determine whether a court has jurisdiction over a dispute.
The first stage of the test is to determine whether a number of presumptive connecting factors (outlined in Van Breda) exist. If so, the court should prima facie assume jurisdiction of the case.
At the second stage, the party challenging the jurisdiction has the opportunity to rebut the presumption by demonstrating that there is no real (or only a weak) relationship between the dispute and the jurisdiction in which the action commenced. In setting out this part of the test, the Supreme Court noted that it would be very difficult to rebut jurisdiction when a tort occurred in the jurisdiction where the action commenced (unless the tort was multi-jurisdictional and the Canadian aspect was only a minor element of the tort).
The court of appeal rejected Ha'aretz's arguments that the matter was only weakly connected to Ontario due to the relatively small number of readers of the article in Canada. Rather, the court noted that the article was not confined to Goldhar's business dealings in Israel or the operation of the football club. Instead, the court stated that the article:
"puts Goldhar's Canadian connection front and center by acknowledging that he is a long distance operator and spends most of his time in Canada and by asserting that he imported his management model for [the football club] from his main business interest, his Canadian shopping center partnership".
The court noted:
"This is not a case of libel tourism. On the motion judge's findings, Goldhar lives in Ontario and has operated a business here for at least 17 years. Moreover, the subject matter of the litigation is connected to Ontario largely because of the link drawn between the article and Goldhar's Canadian business."
The court went on to quote Muscutt v Courcelles,(3) in which the Ontario Court of Appeal held that "the real and substantial connection test requires only a real and substantial connection, not the most real and substantial connection".
The court found that the motions judge did not err in holding that the Ontario court had jurisdiction simplicter over this case.
Appropriate forum In determining whether Ontario was the appropriate forum for hearing this case, the court of appeal noted that the motions judge considered four main aspects that, Ha'aretz argued, were indicative of the matter not being conducive to litigation in Ontario:
- convenience and expense to witnesses;
- applicable law;
- juridical advantage; and
- fairness to the parties.
In reviewing these factors, the court of appeal noted that in order to succeed in its arguments, Ha'aretz had to "demonstrate that the court of the alternative jurisdiction is a clearly more appropriate forum" (as per Bredeen v Black, 2012 SCC 19). Moreover, the court noted that the decision was discretionary and that the motions judge was entitled to "a high degree of deference on appeal".
Convenience and expense to witnesses On the issue of convenience and expense to witnesses, the court first considered the number of witnesses that would have to travel to Canada for the trial. Ha'aretz filed evidence that 18 of its 21 witnesses resided in Israel. Some dispute arose as to whether all of these witnesses would have relevant evidence and also whether some of them would indeed travel to Canada. The motions judge held that:
- evidence could be given by video-conference (permitted by the rules of court);
- testimony could be compelled inter-jurisdictionally through letters rogatory; and
- Goldhar had agreed to cover the expense of Ha'aretz's Israeli witnesses.
The court of appeal found that – despite a misunderstanding by the motions judge of the effect of letters rogatory – the ruling was not unreasonable. The court's observation has important implications for cases of this sort. It stated:
"…the use of technology and interpreters cannot be viewed as undermining the fairness of a civil trial. We live in an age of international communication and commerce. Multi-jurisdictional parties – and witnesses who do not speak either of Canada's official languages – are to be expected. Courtroom procedures must accommodate testimony by videoconferencing. Interpreters have long been a common feature of the Canadian judicial system."
The court found that the motions judge was not reasonable in finding that "convenience and expense to witnesses" only slightly favoured a trial in Israel.
Applicable law On the issue of applicable law, the court of appeal found that – regardless of whether it applied the lex loci delicti rule (the law of the place where the tort was committed) or the rule of law of the jurisdiction in which the plaintiff suffered the "most substantial harm to reputation"(4) – the motions judge was not reasonable in holding that the balance favoured that the trial take place in Ontario.
The court of appeal rejected Ha'aretz's argument that because the number of readers in Israel was higher, the harm was automatically more substantial in that jurisdiction. In any event, the court took special note of the fact that Goldhar limited his claim to damages sustained in Ontario. The court specifically rejected the notion that Goldhar was "forum shopping". It remarked that this "confirms the significance to [Goldhar] of his reputation in Ontario and the importance to him of vindicating it here".
Juridical advantage On the issue of juridical advantage, Goldhar argued that if the matter were to be transferred to Israel, he would be unable to have the matter heard by a jury and he would be subject to the 'public figure' defence, which would assist Ha'aretz. The court of appeal expressed some scepticism as to whether Goldhar would be entitled to a jury in Ontario in any event, given that he had delayed filing a jury notice for approximately 20 months.
Ha'aretz noted several perceived juridical benefits to Goldhar if the matter were to proceed in Israel. The court noted that it was not Ha'aretz's place to argue these benefits on behalf of Goldhar. In any event, the court noted that no evidence had been filed on the choice of law rule that would apply if the matter were to proceed in Israel.
The court of appeal did not find that the motions judge's ruling was unreasonable. Moreover, it noted that the court in Van Breda cautioned against placing too much emphasis on juridical advantage in the forum non conveniens analysis of the 'real and substantial connection test'.
Fairness to the parties Finally, on the issue of fairness to the parties, the court addressed Ha'aretz's concerns "about having to defend an action in Ontario arising from an article about an Israeli soccer team that 'virtually no one' in Ontario read". The court noted the reasons that were emphasised in Banro:
"The importance of place of reputation has long been recognized in Canadian defamation law. For example, the importance of permitting plaintiffs to sue for defamation on the locality where they enjoy their reputation was recognized … in Jenner v. Sun Oil Co. Ltd. In that case, [the Court] found that the plaintiff would not be able to satisfactorily 'clear his good name of the imputation made against him' other than by suing for defamation in the locality where he enjoyed his reputation – that is, where he lived and had his place of business and vocation in life".
The court accepted this reasoning and the motions judge's finding that:
"[a]t the end of the day, … Goldhar lives and works in Ontario and that Ha'aretz chose to write an article about him impugning his management of an Israeli soocer team in a manner that implicated his Canadian business practices and integrity as a Canadian businessman".
Abuse of process
Finally, the court of appeal addressed Ha'aretz's claim that the lawsuit was an abuse of process. Ha'aretz argued that the action amounted to a strategic lawsuit against public participation and should therefore have been struck. Ha'aretz alleged that the claim was an attempt to "muzzle [it] by making it impossible to defend itself and which will impose crushing costs".
The court of appeal refused to dismiss the case on this basis, noting that this is particularly difficult to do in a defamation case where damages are presumed.
The motion was dismissed.
Ha'aretz has sought leave to appeal to the Supreme Court of Canada.
For further information on this topic please contact Carlos P Martins or Tae Mee Park at Bersenas Jacobsen Chouest Thomson Blackburn LLP by telephone (+1 416 982 3800) or email (firstname.lastname@example.org or email@example.com). The Bersenas Jacobsen Chouest Thomson Blackburn website can be accessed at www.lexcanada.com.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.