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Private International Law - Law


Part 2

. Haaretz.com v. Goldhar

In Haaretz.com v. Goldhar (SCC, 2018) the Supreme Court of Canada split into several rulings, with three judges dissenting in the result. These extracts are from the largest (3 judge) faction in the majority, and they deal the venue issue in an internet defamation case - with the focus being on libel 'tourism' [plaintiffs 'shopping' a case for favourable law and logistics].

This extract considers the issue of choice of law as it fits into the forum non conveniens consideration:
[84] This Court, in Tolofson, established lex loci delicti, or the place where the tort occurs, as the general principle for determining choice of law (p. 1050). This rule is meant to ensure “certainty, ease of application and predictability” (Tolofson, at p. 1050).

[85] This Court did, however, leave the door open to carefully defined exceptions to this rule, particularly if the place where the tort occurs differs from the place where its consequences are felt. La Forest J., in Tolofson, considered that the tort of libel may possibly be such a case (pp. 1042 and 1050; see also Banro, at paras. 50-51). This led LeBel J., in Banro, to note that a possible alternative approach to choice of law in defamation cases may be the place of most substantial harm to reputation (para. 56).

[86] The motion judge found that the locus delicti of the tort was Ontario. Based on the limited comparative evidence regarding Goldhar’s reputation in Ontario and Israel, as well as Goldhar’s undertaking not to seek at the trial of the action to recover damages for reputational harm outside of Canada, the motion judge found that the most substantial harm to his reputation was also in Ontario. The majority of the Court of Appeal agreed.

[87] Pepall J.A., dissenting at the Court of Appeal, concluded that “lex loci delicti is too thin a strand on which to anchor choice of law in an Internet defamation case such as this one” (para. 179) and that, under the most substantial harm test, the law of Israel should govern the dispute. She would have found that the motion judge erred on the basis that he did not consider that the tort occurred in both Ontario and Israel, that there was no evidence of substantial harm to Goldhar’s reputation in Ontario and that he did not consider the principle of comity.

[88] As a tort has occurred in Ontario, Ontario law applies to the present action under the lex loci delicti rule. If, however, the action were to proceed in Israel, we can infer, relying upon the evidence of Dr. Tamar Gidron, a law professor at the Haim Striks School of Law in Israel, that Israeli courts would also apply their own law. As each forum would apply its own law, the applicable law factor cannot aid Haaretz in showing that it would be fairer and more efficient to proceed in the alternative forum.

[89] I recognize that, in Black and Banro, this Court considered only the applicable law in the chosen forum. I am concerned that disregarding the applicable law in the alternative forum is inconsistent with the comparative nature of the forum non conveniens analysis:
In many cases, including multi-jurisdiction defamation actions, different choice of law rules in each forum may well lead to different jurisdictions applying different substantive law. If the applicable law to the dispute is going to be used as a factor in the forum non conveniens analysis, then these different choice of law rules should be considered in order to properly determine whether in fact they can be said to favour one forum over the other.
(B. Kain, E. C. Marques and B. Shaw, “Developments in Private International Law: The 2011-2012 Term — The Unfinished Project of the Van Breda Trilogy” (2012), 59 S.C.L.R. (2d) 277, at p. 293)

[90] In any event, it is my view that applicable law, as determined by the lex loci delicti principle, should be accorded little weight in the forum non conveniens analysis in cases where jurisdiction is established on the basis of the situs of the tort. In circumstances where the situs of the tort leads to the assumption of jurisdiction in the chosen forum, lex loci delicti will inevitably also point to the chosen forum on the question of applicable law. This could be problematic, as this Court has clearly directed that the jurisdiction simpliciter and forum non conveniens analyses should be based on different factors (Van Breda, at para. 56; see also J.-G. Castel, “Multistate Defamation: Should the Place of Publication Rule be Abandoned for Jurisdiction and Choice of Law Purposes?” (1990), 28 Osgoode Hall L.J. 153, at p. 163, and M. Castel, at pp. 154-55 and 160). Accordingly, applicable law is of little value in determining whether an alternative forum is clearly more appropriate in cases where jurisdiction is established on the basis of the situs of the tort. As such, while I would not disturb the motion judge’s conclusion that applicable law favours Ontario, this factor should be given little weight in the ultimate balancing.

[91] This would not be an appropriate case for this Court to adopt the place of most substantial harm test proposed in Banro, since, in my view, the submissions on this issue provide an insufficient basis upon which to create such an exception. Indeed, this Court should be reluctant to make such changes to the existing private international law framework as they may create legal uncertainty in a manner contrary to the objectives of conflicts rules (Tolofson, at p. 1061).

[92] I recognize that in Internet defamation actions, where a tort may have occurred in multiple jurisdictions, the lex loci delicti rule may allow courts in multiple forums to assume jurisdiction and apply their own law. In an interconnected world where international players with global reputations are defamed through global publications, this is unsurprising.

[93] While I do not wish to discourage this Court from taking up this issue in a future case, it should do so only where this is necessary for the determination of the specific case before it and where appropriate evidence and argument are presented as to the impact of such a change.

[94] In concluding on this point, I would note that, in this case, the most substantial harm test would not have clearly favoured either forum. This is not a case such as the one contemplated in Tolofson, where the tort occurred in a different place than its consequences. The evidence is that Goldhar has a substantial reputation in Ontario, where his primary business interests lie, as well as a substantial reputation in Israel, where he enjoys a certain celebrity status by virtue of his ownership of a popular soccer team. While these reputations are qualitatively different, the evidence before me does not allow for a determination as to where Goldhar enjoyed the most substantial reputation or where the most substantial harm to that reputation occurred.
. Lilydale Cooperative Limited v. Meyn Canada Inc.

In Lilydale Cooperative Limited v. Meyn Canada Inc. (Ont CA, 2015) the Court of Appeal stated as follows on the test for determining which jurisdiction's substantive law applied to a contract:
[9] Meyn and Lilydale did not include in their contract a clause for the law that would govern disputes between them. Absent such a clause, the motion judge applied the test first set out by the Supreme Court of Canada nearly 50 years ago in Imperial Life Assurance Co. of Canada v. Segundo Casteleiro Y Colmenares, 1967 CanLII 7 (SCC), [1967] S.C.R. 443. All parties agreed that this was the appropriate test. In Colmenares, relying on English authority, Ritchie J. set out the closest and most real or most substantial connection test, at p. 448:
It now appears to have been accepted by the highest Courts in England that the problem of determining the proper law of a contract is to be solved by considering the contract as a whole in light of all the circumstances which surround it and applying the law with which it appears to have the closest and most substantial connection.

This test was adopted by the Privy Council in Bonython v. Commonwealth of Australia, [1951] A.C. 201, where Lord Simonds said at p. 219:
... the substance of the obligation must be determined by the proper law of the contract, i.e., the system of law by reference to which the contract was made or that with which the transaction had its closest and most real connexion.
[10] For the criteria that inform this test, Ritchie J. turned to Cheshire’s text on private international law:
The many factors which have been taken into consideration in various decided cases in determining the proper law to be applied, are described in the following passage from Cheshire on Private International Law, 7th ed., p. 190:
The court must take into account, for instance, the following matters: the domicil and even the residence of the parties; the national character of a corporation and the place where its principal place of business is situated; the place where the contract is made and the place where it is to be performed; the style in which the contract is drafted, as, for instance, whether the language is appropriate to one system of law, but inappropriate to another; the fact that a certain stipulation is valid under one law but void under another … the economic connexion of the contract with some other transaction … the nature of the subject matter or its situs; the head office of an insurance company, whose activities range over many countries; and, in short, any other fact which serves to localize the contract.
[11] The motion judge focused on four criteria: the nature and subject matter of the contract, the place of performance of the contract; the place of contracting, and the domicile and residence of the parties. The motion judge’s finding that the place of contracting was neutral is not contested on this appeal. Her findings on the other three criteria are in issue. I turn to them now. I do so with the standard of appellate review in mind. The motion judge’s balancing of the four criteria she considered called for the exercise of her discretion. Unless, in exercising her discretion, she made an error of law or an unreasonable finding of fact or balanced the criteria in an unreasonable way, this court should not interfere.
. Das v. George Weston Limited

In Das v. George Weston Limited (Ont CA, 2018), a complex international tort case, the Court of Appeal considers the rules for choice of law (the international jurisdiction's law that applies to the case) in tort:
[83] The parties agree that the Supreme Court’s decision in Tolofson provides the framework for the choice of law analysis in tort. In Tolofson, the Supreme Court held that, generally, tort claims should be governed by the substantive law of the place where the activity or wrong occurred, that is to say, the lex loci delicti: at pp. 1049-50. The court also recognized a narrow exception, namely, where its application would give rise to an injustice: Tolofson, at pp. 1052, 1054. La Forest J. wrote, at pp. 1049-50:
[I]t seems axiomatic to me that, at least as a general rule, the law to be applied in torts is the law of the place where the activity occurred, i.e., the lex loci delicti. There are situations, of course, notably where an act occurs in one place but the consequences are directly felt elsewhere, when the issue of where the tort takes place itself raises thorny issues. In such a case, it may well be that the consequences would be held to constitute the wrong.
[84] La Forest J. acknowledged, at p. 1054, that a strict application of the lex loci delicti rule may give rise to an injustice at the international level, but envisaged few cases that would warrant departing from the general rule:
I have already indicated, of course, that I view the lex loci delicti rule as the governing law. However, because a rigid rule on the international level could give rise to injustice, in certain circumstances, I am not averse to retaining a discretion in the court to apply our own law to deal with such circumstances. I can, however, imagine few cases where this would be necessary.


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Last modified: 21-01-23
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