Friday, 29 June 2018

The SCC’s Latest Ruling about Forum Non Conveniens

           The Supreme Court of Canada’s decision in Haaretz v Goldhar  2018 SCC 28, a case about online defamation,  suggests a lighter burden than before for a defendant who seeks a stay of proceeding based on the principle of Forum Non Conveniens.  

Mitchell Goldhar, who is a Canadian resident, sued Haaretz Daily Newspaper, which is an Israeli newspaper for defamation after Haaretz published an article regarding his Canadian business practices as well as a professional sports team he owns in Israel. Haaretz published it in Israel and  also posted it online, which and which was seen online in Canada.  Haaretz moved for a stay of the action, asking the court to exercise its discretion to decline jurisdiction in favour of the Israeli courts.   The motion court and Ontario Court of Appeal ruled in Goldhar’s favour.  The Supreme Court ruled against him 6 – 3, in a splintered decision with five sets of reasons.

If a court has determined it has jurisdiction simpliciter, a defendant may ask the court to exercise its discretion to decline to exercise jurisdiction on the ground that a court elsewhere is “clearly more appropriate”.  As the Court confirmed in Club Resorts v Van Breda, 2012 SCC 17 (para. 109), “the normal state of affairs is that jurisdiction should be exercised once it is properly assumed”, and the onus is on the defendant to show that the foreign court is in a better position to dispose fairly and efficiently of the litigation, such that the plaintiff should be deprived of his choice of forum.    Haaretz arguably erodes that principle; I say this for several reasons. 

One   Among the factors the majority say pointed to Israel as the clearly more appropriate forum was the fact that Haaretz would want to call several witnesses who reside in Israel and who apparently would not testify voluntarily.  There is no way to compel them to come to Canada to testify.  Haaretz said it would be unfair to proceed in Canada without their evidence, but provided no evidence as to whether Israeli courts would uphold a letter of request/letters rogatory from the Ontario court to compel the testimony of those witnesses in Israel for use in Canada.   The majority held that Haaretz had met its burden, and that it was incumbent on Goldhar to prove that the Israeli courts would likely compel the testimony, insofar as expert evidence must be led by the party seeking to prove the content of foreign law (para. 61 – 65).  But why must it be Goldhar who proves whether the Israeli courts would compel the evidence?  This is an essential element in Haaretz’s claim that it would not have the testimony if the case proceeded in Ontario.  To require Goldhar to prove how the Israeli courts would respond to the letters rogatory is to shift the onus from Haaretz to Goldhar. 

Two  Although Goldhar originally sued for damage to his reputation in both Canada and Israel, he made clear at the motion that he would confine his claim to his reputation in Canada.  It appears he curtailed his claim so as to minimize the risk of the case being tried in Israel, so dearly did he want the case to be tried in Canada.   Yet the majority of the Supreme Court would not give weight to this.   The Court focussed on the wording of the statement of claim and the fact that Goldhar had not actually undertaken not to sue later for the damage to his reputation in Israel.  However, there is no indication that the motion court or Haaretz had asked for such an undertaking or that Goldhar would refuse it.    Plainly, protecting his reputation in Canada was more important to Goldhar than his reputation in Israel. Focussing the proceeding on the former makes the whole proceeding more efficient, which is to be encouraged.   For the Court to disregard this suggests the Court is backing away from the principle, described above, that the court will generally respect the plaintiff’s choice of forum.

Three   The motions judge gave weight to an undertaking Goldhar made to pay the travel and accommodation costs of Haaretz’s witnesses to come to Canada.    The majority said the judge ought not to have done so, saying the undertaking “is of no significant value”.  It added that “consideration of such an undertaking would allow a wealthy plaintiff to sway the forum non conveniens analysis, which would be inimical to the foundational principles of fairness and efficiency underlying this doctrine.”  (para. 66).  

Two concerns arise here.   First, the forum non conveniens analysis is a matter of the judge’s discretion.  The standard of appellate review for discretionary decisions does not allow the appeal court to substitute its judgment as to the weight to be given to an element of the analysis. 

Second, the undertaking can hardly be inimical to fairness if it helps the defendant conduct a trial here. Indeed such undertakings should be encouraged, as they help alleviate a burden that a defendant might face as a result of the principle that a plaintiff’s choice of forum is generally to be respected. The fact the Supreme Court rejected the undertaking as a factor suggests the plaintiff’s choice of forum will not carry as much weight as before. 

Chief Justice McLachlin was among the three judges dissenting (it was the last judgment for the recently retired judge). In other words, if the case were heard today, perhaps only two judges would rule for the plaintiff.    

It is to be hoped that a future ruling will reaffirm the principle that a plaintiff’s choice of forum is generally to be respected.