Dow Jones & Company Inc V Gutnick: An Adequate Response to Transnational Internet Defamation?

Article excerpt

I INTRODUCTION

The recent decision of the High Court of Australia in Dow Jones & Co Inc v Gutnick (1) has inspired much controversy. The reaction from media and technology groups has been particularly critical as they see the decision representing a threat to freedom of expression on the Internet and a deterrent to online publication. (2) It has also been suggested that the High Court judgments reflect a peculiarly nationalistic approach to resolving problems with respect to a medium that is fundamentally borderless and aterritorial. (3) More generally, the decision is also highly significant because it represents the first major opportunity for an Australian court to examine the application of the rules of private international law to Internet conduct. While in the United States and Europe there now exists a large body of judicial decisions (4) and legislative activity (5) on the topic, in Australia, until Gutnick, the issues of jurisdiction and choice of law in relation to the Internet remained largely unexplored. (6)

The purpose of this article is to assess the adequacy of the approach taken by the High Court according to a number of criteria of adjudicative fairness. Firstly, does the decision treat plaintiffs and defendants with equality in transnational defamation litigation? Secondly, does it effectively advance the objectives of comity between nation states and the proper allocation of jurisdictional competence among national courts? In considering these issues, a number of alternative approaches to that adopted by the Court will also be discussed.

II THE FACTS AND DECISION IN GUTNICK

Gutnick concerned an article written by journalists for the American publisher, Dow Jones, in the Barron's magazine. The article was researched and prepared in New York but uploaded (or posted) onto the Dow Jones website, which was hosted on a server in New Jersey. The article contained an allegation that Mr Gutnick, a high profile entrepreneur resident in Victoria, had engaged in the manipulation of share prices and had associated with a well-known American money launderer and tax evader. The Dow Jones website was not an ordinary site open to the public at large, but was a subscriber site that required the payment of subscription fees and password access. The worldwide subscription to the site was over 550 000, of whom 1700 were resident in Australia with a few hundred from Victoria. A small number of print copies of the offending article were also sold in Victoria. (7)

Gutnick sued Dow Jones in the Supreme Court of Victoria, expressly confining his claim to those damages flowing from publication of the article in Victoria. As Dow Jones had no place of business in Australia it was necessary for Gutnick to serve the defendant outside the jurisdiction under Order 7 of the Supreme Court Rules 1996 (Vic) to establish jurisdiction in that state. Two grounds were relied upon by the plaintiff: first, that the action was based upon a tort committed in Victoria (rule 7.01(1)(i)) and second, that damage was suffered in Victoria as a result of a tort wherever occurring (rule 7.01(1)0)). Gutnick was successful on both bases before Hedigan J of the Supreme Court of Victoria and the Victorian Court of Appeal. Dow Jones then appealed to the High Court, which unanimously upheld the decision of the trial judge. The principal judgment was delivered by Gleeson CJ, McHugh, Hayne and Gummow JJ with whom Gaudron J expressly agreed. Callinan J delivered a separate judgment in which he agreed with the principal judgment on all but one issue, (8) while Kirby J also delivered a separate judgment in which he agreed generally with the other judges but expressed some concerns about the application of the rules to a global technological medium such as the Interact. (9)

In the appeal Dow Jones effectively conceded that rule 7.01(1)(j) was satisfied on the facts, which meant that the respondent had successfully established jurisdiction in Victoria. …