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Supreme Court rules Canadian billionaire must take defamation suit to Israel

The Supreme Court of Canada has given writers and publishers some protection from lawsuits in distant jurisdictions that allege online defamation, telling a Canadian billionaire who sued an Israeli newspaper to take his lawsuit to Israel.

Mitchell Goldhar, a real estate developer, had sued Haaretz in Ontario.

In an important decision for publishing in the internet era, when an article or book produced in one country may be read online almost anywhere in the world, the court’s 6-3 ruling stressed the need for fairness in choosing a jurisdiction for a defamation suit.

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Traditionally, Canadians could sue in the jurisdiction in which the alleged defamation was published, meaning wherever the internet is available. But as a result of the ruling, considerations such as where most of the audience is and where the potential witnesses are have taken on extra importance.

For courts worldwide, “this is an important message of restraint,” Paul Schabas, a Toronto lawyer representing the Israeli newspaper Haaretz, which had argued the lawsuit should be heard in Israel, said in an interview.

Mr. Goldhar, who owns a Tel Aviv soccer club, had sued over a sports article that depicted him as an interfering, “megalomaniac” owner, while also saying he had a similar approach to management in Canada. Haaretz said Israel was more appropriate because the witnesses it would call live there, most of its readers live there and the story mostly concerned the Tel Aviv soccer team.

Mr. Schabas deemed the ruling a win for Canadian media also because it will be seen as a model for courts in other countries. “This was a long and expensive struggle for a struggling newspaper, to find itself sued over a sports column halfway around the world. The way our court treats foreign media is something that Canadian media can rely on if they find themselves in the same position in Israel or Kazakhstan.”

Under traditional rules, Mr. Goldhar had a strong case for suing in Ontario: The article was published and read there. His business operations (he is executive chair of SmartCentres, a real estate investment trust) have an Ontario headquarters, and he said hundreds of his employees viewed or discussed the Haaretz article. Two lower courts affirmed his right to sue in Ontario.

But the Supreme Court majority said the convenience and costs for Mr. Goldhar and Haaretz, and for witnesses, favoured Israel. Mr. Goldhar had a right to seek a legal advantage in Ontario, which unlike Israel has jury trials for civil cases; but this was a minor factor, it said. Fairness favoured Israel, because Haaretz might not be able to compel its witnesses to testify in Canada.

“Israel is clearly the more appropriate forum,” Justice Suzanne Côté wrote for three of the six judges in the majority.

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Each of the other three judges in the majority offered somewhat different reasons for choosing Israel, with Justices Rosalie Abella and Richard Wagner saying a key consideration should be identifying the jurisdiction where the most harm to reputation is alleged to have been done, which in this case would be Israel.

The three dissenting judges, including the now-retired chief justice Beverley McLachlin, said the court had weakened Canadians’ access to justice.

“When a Canadian citizen is allegedly defamed for his Canadian business practices − in an article published online in his home province by a foreign newspaper − is he entitled to vindicate his reputation in the courts of the province where he lives and maintains his business, and where the sting of the article’s comments is felt?” The answer, they said, is yes.

Mr. Goldhar, in a statement made through his lawyer, William McDowell of Toronto, said he respects the court’s ruling, but noted that it “addresses the matter of jurisdiction only. This decision did not deal with the libel claim itself.”

Hilary Young, a professor at the University of New Brunswick Faculty of Law, said the decision could reduce “libel tourism,” but also creates uncertainty. “The newspaper won in this case, but in the future, publishers will still have to consider the risk of being sued for libel not only at home, but also in foreign countries.”

The ruling is the third major internet-law decision of the Supreme Court in the past year. Two rulings last year stressed the importance of access to justice in Canada.

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Last June, the court set a world precedent by ordering the search engine Google to take down – everywhere, not only in Canada – information about a company that was accused of stealing trade secrets. It also allowed a class-action lawsuit against Facebook to proceed in Canada, even though a clause in Facebook’s user-agreement with its social-media customers specifies California as the jurisdiction for any legal disputes in which it is involved.

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