The Law of Defamation and the Internet

Update 2

Gutnick v Dow Jones & Co Inc [2001] VSC 305

Australian decision concerning the place of publication of Internet material and the application of forum non conveniens principles

Stop press … High Court grants limited leave to appeal to Dow Jones – see commentary below

Stop press … High Court delivers judgment in favour of Gutnick on 10 December 2002 – see separate update for commentary

On 28 August 2001, Hedigan J of the Victorian Supreme Court delivered his judgment in Gutnick v Dow Jones & Co Inc, a case which is mentioned in the notes to para 24.52 of The Law of Defamation and the Internet. A copy is available by following this link.

Dow Jones publishes the business magazine Barrons and an online news service, Barrons Online. In October 2000, it published an article entitled ‘Unholy Gains’ which, in short, accused the plaintiff, a prominent Melbourne businessman, of improper dealings with gaoled money-launderer and tax evader Nachum Goldberg. The article was written in New York, where Barrons magazine is also printed. Barrons Online is stored on web servers in New Jersey. There was evidence that the online article, although overwhelmingly accessed in America, had probably been read by more than 300 people in Victoria. Around 14 copies of Barrons magazine had been sold in Victoria. The plaintiff sued for defamation in the Supreme Court of Victoria.

The hearing before Hedigan J concerned an application by Dow Jones to stay the Victorian proceedings, principally on the ground that Victoria was an inappropriate forum. In the result, his Honour held that the matter should proceed in Victoria.

Dow Jones argued, first, that the Internet publication of the offending article occurred in New Jersey, being the place in which the article was ‘uploaded’ from Dow Jones’ web servers each time an Internet user requested a copy of the article. That argument was rejected. Hedigan J noted that it has been uniformly held in Anglo-Australian law for centuries that, for the purposes of defamation law, material is ‘published’ in the place where it is ‘seen and heard, (ie made manifest to) and comprehended by the reader or hearer.’ His Honour’s observation is hardly controversial: see The Law of Defamation and the Internet, paras 5.10, 24.10. Dow Jones was asking the court to reach a strikingly different conclusion about the place of publication. Hedigan J declined to do so, preferring to follow ‘the long and steady line of authority’ in non-Internet contexts. His Honour noted that Dow Jones was effectively asking him ‘to entrench the United States, the primary home of much of Internet publishing, as the forum’ for the hearing and determination of all defamation cases concerning material written, edited and uploaded there.

It followed from the conclusion that the article had been published in Victoria that the tort of defamation had been committed there and that, as a result, the Victorian Supreme Court had jurisdiction to hear and determine the plaintiff’s case.

Perhaps the more substantial issue in the case was whether the court should decline to exercise its jurisdiction, on the basis that it was a ‘clearly inappropriate forum’, the test which has prevailed in Australia since Voth v Manildra Flour Mills Pty Ltd: see The Law of Defamation and the Internet, para 24.36.

Dow Jones contended that the proceeding was more substantially connected to the United States than to Victoria. The plaintiff countered that Victoria was an appropriate forum. Notably, he was prepared to limit his action to such publications of the article as had occurred in Victoria, and to discrete imputations allegedly conveyed by the article concerning events which were said to have occurred in Victoria.

Hedigan J decided that Victoria was the more appropriate forum. His Honour was influenced, in particular, by the fact that publication of the article had occurred in Victoria, the plaintiff had his family, residence, business headquarters and social life there, and the plaintiff was prepared to limit his claim to damage to his reputation in Victoria.

Leave to appeal was denied by the Victorian Court of Appeal on 21 September 2001.

Hedigan J’s decision is consistent with the authorities discussed in paras 24.44–24.51, and the conclusions expressed in para 24.52, of The Law of Defamation and the Internet.

Stop press

Australia’s ultimate appellate court, the High Court, granted Dow Jones limited leave to appeal from Hedigan J’s judgment on 14 December 2001. The appeal was heard on 28 May 2002.

A transcript of the oral argument before the Court can be found by following this link.

If Dow Jones is to succeed in its appeal, the Court will have to depart quite radically from orthodox principles concerning the place of publication for the purposes of defamation law. As the High Court is not bound by precedent, arguments of policy assumed considerable importance at the appeal, and make it impossible to predict the likely outcome.

Judgment is expected to be delivered in late 2002.

‹‹Previous Index Next››

DISCLAIMER

The author makes no warranties or representations concerning the accuracy of the information contained on this web page. To the maximum extent permitted by law, the author accepts no liability for any direct, indirect or consequential damages resulting from the use of this web page or reliance on the information contained on it. Links to other web sites are provided in good faith and for information only. The author disclaims any responsibility for the materials contained in any web site linked to this web page.