The Law of Defamation and the Internet

Update 8

Dow Jones & Company Inc v Gutnick [2002] HCA 56 (10 December 2002)

Australian decision concerning the place of publication of Internet material and jurisdictional issues

Australia’s ultimate appellate court, the High Court, delivered its judgment in Dow Jones & Company Inc v Gutnick on 10 December 2002. The decision has attracted widespread international interest. A copy of the judgment is available by following this link.

The matter was heard on appeal from the Supreme Court of Victoria. The first instance decision is the subject of a separate update.

The respondent, 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 issue before the Court was whether the proceeding should proceed in Victoria (where the plaintiff resides and has a substantial reputation), New York (where the article was written and edited) or New Jersey (where the article was uploaded and where Dow Jones’ web servers are situated).

The Court held unanimously in the plaintiff’s favour. The Court’s decision is consistent with the statement of Australian law set out in chapter 24 of The Law of Defamation and the Internet.

The Joint Judgment

In a joint judgment, Gleeson CJ, McHugh, Gummow and Hayne JJ said, in effect, that the Internet was nothing more than the technological descendent of widely disseminated newspapers and magazines, and radio and television broadcasts. They said, at para 39:

It must be recognised … that satellite broadcasting now permits very wide dissemination of radio and television and it may, therefore, be doubted that it is right to say that the World Wide Web has a uniquely broad reach. It is no more or less ubiquitous than some television services… However broad may be the reach of any particular means of communication, those who make information accessible by a particular method do so knowing of the reach that their information may have. In particular, those who post information on the World Wide Web do so knowing that the information they make available is available to all and sundry without any geographic restriction.

Their Honours held, consistent with longstanding Anglo-Australian legal authority, that as defamation law is concerned with reputation, the place in which damage is suffered will ordinarily be the place of the tort. At para 44:

It is only when the material is in comprehensible form that the damage to reputation is done and it is damage to reputation which is the principle focus of defamation, not any quality of the defendant’s conduct. In the case of material on the World Wide Web, it is not available in comprehensible form until downloaded on to the computer of a person who has used a web browser to pull the material from the web server. It is where that person downloads the material that the damage to reputation may be done. Ordinarily then, that will be the place where the tort of defamation is committed.

Gleeson CJ, McHugh, Gummow and Hayne JJ concluded that as the plaintiff had confined his claim to damage to his reputation in Victoria, as a consequence of publications of the offending article occurring in that State, the cause of action occurred wholly in Victoria and all substantive issues arising in the action fell to be determined according to the law of Victoria.

Their Honours rejected the submission that an American-style ‘single publication’ rule should be adopted in Australia: see paras 29-37.

Their Honours did not think that their decision was likely to lead to gross unfairness to publishers, or to proceedings being brought in multiple jurisdictions in respect of the same material, for a number of reasons.

First, they pointed out at para 50 that forum non conveniens principles would prevent plaintiffs from choosing a forum which was clearly inappropriate for the hearing and determination of proceedings arising out of the publication of defamatory Internet material.

Secondly, they observed that where a publisher’s conduct had all occurred outside the jurisdiction of the forum, it might be appropriate for the court to have regard to the reasonableness of the publisher’s conduct in deciding whether it has a defence. Specifically, their Honours hinted that Australian common law might develop a defence which applies where publishers have acted reasonably having regard to where their conduct took place, and what rules about defamation apply in that place: see para 51. In applying such a defence, due weight would have to be given to the fact that a claim for damage to reputation will warrant an award of substantial damages only if the plaintiff has a reputation in the place where the publication is made: para 53.

Thirdly, their Honours thought there were practical reasons why foreign plaintiffs would be unlikely to sue foreign publishers in Australia other than in exceptional cases. They pointed out that plaintiffs will only be likely to sue in places where they have a substantial reputation, and if they are likely to be able to enforce any judgment they obtain in a place where the defendant has assets.

Finally, Gleeson CJ, McHugh, Gummow and Hayne JJ rejected Dow Jones’ argument that publishers will potentially be exposed to the risk of being sued in multiple jurisdictions every time they publish material via the Internet. At para 54:

[T]he spectre which Dow Jones sought to conjure up in the present appeal, of a publisher forced to consider every article it publishes on the World Wide Web against the defamation laws of every country from Afghanistan to Zimbabwe is seen to be unreal when it is recalled that in all except the most unusual of cases, identifying the person about whom material is to be published will readily identify the defamation law to which that person may resort.

Gaudron J

Gaudron J agreed with Gleeson CJ, McHugh, Gummow and Hayne JJ, and made some additional observations about the American ‘single publication’ rule. Her Honour noted that no question of multiple suits in different jurisdictions arose in the instant case, because the plaintiff had elected to limit his claim to damages arising out of the publication of the offending material in Victoria; a controversy capable of being determined entirely by the Supreme Court of Victoria.

Kirby J

Although agreeing in the result, Kirby J was the only judge to express any reservations about the outcome of the case. He observed, at para 113, that the Internet is a global medium which knows no geographic boundaries, and said that its ‘basic lack of locality suggests the need for a formulation of new legal rules to address the absence of congruence between cyberspace and the boundaries and laws of any given jurisdiction.’

After considering a range of alternatives, Kirby J said, at para 151:

Where a person or corporation publishes material which is potentially defamatory to another, to ask the publisher to be cognisant of the defamation laws of the place where the person resides and has a reputation is not to impose on the publisher an excessive burden. At least it is not to do so where the potential damage to reputation is substantial and the risks of being sued are commensurately real. Publishers in the United States are well aware that few, if any, other jurisdictions in the world observe the approach to the vindication of reputation adopted by the law in that country.

Kirby J agreed with Gleeson CJ, McHugh, Gummow and Hayne JJ that the spectre of ‘global liability’ had been exaggerated. He said, at para 165:

Apart from anything else, the costs and practicalities of bringing proceedings against a foreign publisher will usually be a sufficient impediment to discourage even the most intrepid of litigants. Further, in many cases of this kind, where the publisher is said to have no presence or assets in the jurisdiction, it may choose simply to ignore the proceedings. It may save its contest to the courts of its own jurisdiction until an attempt is later made to enforce there the judgment obtained in the foreign trial. It may do this especially if that judgment was secured by the application of laws, the enforcement of which would be regarded as unconstitutional or otherwise offensive to a different legal culture.

Kirby J’s judgment concluded, at para 166:

However, such results are still less than wholly satisfactory. They appear to warrant national legislative attention and to require international discussion in a forum as global as the Internet itself. In default of local legislation and international agreements, there are limits on the extent to which national courts can provide radical solutions that would oblige a major overhaul of longstanding legal doctrine in the field of defamation law.

Callinan J

Callinan J saw no difficulty in holding Internet publishers to account according to the law of the place in which material is comprehended. He said, at para 181:

A publisher, particularly one carrying on the business of publishing, does not act to put matter on the Internet in order for it to reach a small target. It is its ubiquity which is one of the main attractions to users of it.

His Honour observed at para 182 that publishers ‘are not obliged to publish on the Internet’. He said that if ‘the potential reach is uncontrollable then the greater the need to exercise care in publication.’

In reaching the same conclusion as the remainder of the Court, Callinan J said, at para 200:

[W]hat the appellant seeks to do … is to impose upon Australian residents for the purposes of this and many other cases, an American legal hegemony in relation to Internet publications. The consequence, if the appellant’s submission were to be accepted would be to confer upon one country, and one notably more benevolent to the commercial and other media than this one, an effective domain over the law of defamation, to the financial advantage of publishers in the United States, and the serious disadvantage of those unfortunate enough to be reputationally damaged outside the United States. A further consequence might be to place commercial publishers in this country at a disadvantage to commercial publishers in the United States.

Click here for further commentary and analysis on the significance of the High Court’s decision.

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