Dow Jones and Company Inc v Gutnick
[2002] HCATrans 191
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Melbourne No M3 of 2002
B e t w e e n -
DOW JONES & COMPANY, INC
Appellant
and
JOSEPH GUTNICK
Respondent
GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 28 MAY 2002, AT 10.16 AM
Copyright in the High Court of Australia
MR G.R. ROBERTSON, QC: If your Honours please, I appear for the appellant with MR T.F. ROBERTSON, SC. (instructed by Gilbert & Tobin)
MR J.L. SHER, QC: May it please the Court, I appear with my learned friend, MR M.F. WHEELAHAN, for the respondent. (instructed by Schetzer, Brott & Appel)
MR B.W. WALKER, SC: May it please the Court, with MS S.E. PRITCHARD, I seek leave to appear on behalf of Amazon.com, Inc, Associated Press, Association of Alternative Newsweeklies, BloombergLP, Cable News Network LP, LLLP, Guardian Newspapers Ltd, Knight Ridder, Inc, Media/Professional Insurance, The New York Times Company, News Limited, Online News Association, Reuters Group PLC, Time Inc, Tribune Company, The Washington Post Company, Yahoo! Inc, Internet Industry Association, and John Fairfax Holdings Ltd as interveners. (instructed by Blake Dawson Waldron)
GLEESON CJ: Is that opposed, Mr Sher?
MR SHER: It is, your Honours. Would your Honours wish to hear me?
GLEESON CJ: Yes, Mr Sher.
MR SHER: There are two points we wish to make in opposition to the intervention. The first is a short point and it is simply this, that this case does not concern free access to the Internet. That is the basis for the application of intervention. That is to say ‑ ‑ ‑
KIRBY J: The argument is that if your argument is correct, that that will have a freezing effect on what people are willing in different countries of the world to put on the Internet. That is an argument we are going to have to deal with, so why should we not hear those who wish to express that point of view and indicate how it is correct?
MR SHER: If the Court rejects the interveners and the appellant’s argument in relation to free access to the Internet, it would undoubtedly be advantageous to the plaintiff in this case, but it is not necessary to the decision ‑ that is simply the point we make ‑ because this is a subscription service in respect of which all the names and addresses of the subscribers was known to the publisher. It will not have a chilling effect, is what we say. But that is the short point. There is a more substantial point which has only arisen as a result of information we received late yesterday afternoon.
I would like to ask your Honours, if you would, to look at a document that we have had distributed this morning which is a document that was picked up on the Internet by researches that my junior undertook late yesterday afternoon when we received certain information. Do your Honours have the document headed, “AAN Joins Amici in Tribune Co Case”?
GLEESON CJ: Yes.
KIRBY J: You got this through the advantages of the Internet?
MR SHER: Certainly, your Honour, and I will tell your Honours exactly what happened – perhaps not now but later – and your Honours will be surprised and probably amazed. In short, what we discovered yesterday afternoon was that six of the interveners and the appellant are in fact participating in an American case in which the same point arises and which will be heard by the Federal Court of Appeals Fourth Circuit Court next Monday in Virginia.
We have actually now obtained through the assistance of my learned friend, Mr Walker, actually a copy of the first instance decision which I also hope has been distributed to your Honours. It is the case of ‑ ‑ ‑
GLEESON CJ: Is that the case of Young?
MR SHER: Young v Newhaven Advocate.
GLEESON CJ: We knew about that.
MR SHER: Very well. Your Honours, our point ‑ ‑ ‑
KIRBY J: Is that not rather against you, because it indicates that this issue is an issue that is arising in the United States, Australian and no doubt French and other courts and the more we are assisted to come to a conclusion that is informed, the better.
MR SHER: The advantage your Honours will have of hearing Mr Walker is undoubted but the point we make simply is that the appellants, and we would assume the interveners, are making the point that US courts do not follow overseas authority because it does not pay any regard to the freedom of speech requirements of the First Amendment. Indeed, in the cases cited by the appellants in note 36 on page 11 of their submissions they refer to two cases, one of which is the decision in Telnikoff v Matusevitch where it is made clear that American courts basically will not follow British, and we would therefore say, Australian authority. The persuasive effect, therefore,
of any decision of this Court on this topic in America is likely to be virtually nil.
KIRBY J: You make that point in your submissions. You say this is part of an American hegemony in the law.
MR SHER: That is so.
KIRBY J: That is a good point but we are surely entitled to hear the other point of view and especially because there is litigation on, apparently, a very similar question before United States courts about which the intervener would be able to help us.
MR SHER: It is the identical question and our point simply is that the interveners are having their day in an American court next Monday and there is therefore no need for most of them ‑ there are I think three exceptions only ‑ to have their day here. That is simply our point, your Honours.
GLEESON CJ: By majority you have that leave, Mr Walker. Yes, Mr Robertson.
MR ROBERTSON: If your Honours please, we have agreed time between us, if it is convenient to the Court. Mr Walker and I will detain your Honours until 12.15. Mr Sher will have half an hour before lunch and an hour and a half after, and I will reply in the last half hour.
GLEESON CJ: Yes, thank you, Mr Robertson.
MR ROBERTSON: Your Honours, the words which are the subject of this action comprise a few paragraphs in a long article entitled “Unholy Gains”. It appears many times, I am afraid, in the appeal bundle. At page 63 you will find it in numbered paragraphs. The paragraphs of which complaint is made are essentially paragraphs 31 to 36, in the middle of that article. That is the Internet article that was obtained online. It was first published in the appellant’s business journal, Barron’s, on Saturday, 28 October ‑ ‑ ‑
KIRBY J: Just before you go into the article. I saw that an application was made before Justice Hedigan, and I think allowed, to enlarge the statement of claim to permit the plaintiff to rely upon the actual publication of the newspapers in Victoria. Now, in your written submissions you seem to, as it were, bypass that and say the only tort is by virtue of the Internet publication, at 57.
MR ROBERTSON: Yes.
KIRBY J: What is the position now? Is the plaintiff relying both on the Internet publication and on the newspaper publication, because they may present different questions?
MR ROBERTSON: They do and the judge in his decision put to one side the few publications – I think there were five – that had come in, albeit not via Dow Jones, that were proven that the plaintiff was suing upon and he said, in effect, “My decision on the Internet point settles the question, in substance, in the case”. But I think the plaintiff is still pursuing those few print publications.
KIRBY J: Is not that an alternative foundation for jurisdiction, whatever may be the forum non conveniens question or the force of ‑ ‑ ‑
MR ROBERTSON: Yes, it is, but we were only served with the process relating to the Internet. At page 3 your Honour will see the statement of claim which refers to the – the writ is at page 1 and the statement of claim is at page 3 and the service of process related only to the Internet publication, as your Honour sees at page 3, at paragraph 3 of the statement of claim:
the defendant published or caused to be published in Victoria by means of the internet and in permanent form an article entitled, “Unholy Gains” ‑ ‑ ‑
KIRBY J: I do not have a notice of contention in my appeal book. Is there no notice of contention, as it were, seeking to support jurisdiction on the basis of the newspaper publications within the jurisdiction?
MR ROBERTSON: No.
KIRBY J: So, we can ignore it, subject to anything Mr Sher says?
MR ROBERTSON: Yes, subject to what he said, our position is that this appeal relates only to the Internet publication and concerns the place and, indeed, the place of commission of the Internet tort. Your Honours, the print publication is found in the fourth bundle, that is, the print journal that went on sale in America on 28 October. Shortly after it went on sale on that Saturday, the contents were placed on the appellant’s website which is wsj.com, comprising six servers located at its business establishment in New Jersey. The article was written, researched and edited at Liberty Street in New York and was then piped, as it were, across the Hudson to the servers which are located in the business establishment across the Hudson in New Jersey.
Your Honours, at page 77 your Honours will see the letter before action that came from the plaintiff’s American New York and New Jersey lawyers on 30 October, on the Monday. At page 77 they complain about allegations made in the entire article, not the allegations that they finally sued upon, and in the second paragraph in the second sentence:
The world-wide dissemination of these accusations substantially increases the damage to Mr Gutnick, and increases your responsibility under the laws of many nations.
The appellant does not, of course, deny its increased responsibility in damages for world-wide publication if these allegations cannot be justified, but it contends that the justification should be decided by the law of the one nation by which its business operated under which the article was prepared and put up on the Internet which was the act which gave the plaintiff, in substance, his cause of complaint.
GUMMOW J: You mean laws of one State, do you not?
MR ROBERTSON: I am sorry.
GUMMOW J: You said nation; you mean State?
MR ROBERTSON: Yes.
GLEESON CJ: What was the nature of the appellant’s business?
MR ROBERTSON: The appellant’s business is to publish information.
GLEESON CJ: To communicate information.
MR ROBERTSON: To communicate information, yes.
HAYNE J: And which State do you say is the relevant State?
MR ROBERTSON: New Jersey, because that was the State where, in this case, the appellant had its main Internet business operation. That was where its six servers were located.
HAYNE J: Thus the fact that it was, as you said, researched, written and edited in New York is irrelevant.
MR ROBERTSON: No, it is relevant. In this case the appellant is prepared to be tried in either State. There is very little difference in their laws. There is this unusual bifurcation of function. We say that the act which gave the plaintiff his cause of complaint, the critical act of the defendant, was the uploading and that occurred where a business establishment was in place in New Jersey.
KIRBY J: Am I misremembering it, when a subscriber clicks on, do they not agree to be bound by the law of New York?
MR ROBERTSON: They do, by a US law, and the contract that they make with Dow Jones is notionally placed in New York.
KIRBY J: I just do not quite understand how New Jersey gets into it. It is written, it is researched, it is investigated and the law that, by clicking on, a subscriber in the United States or Australia, for whatever effect that has, agrees to be bound by as the law in New York and you say, as it were, piped. I do not understand that.
MR ROBERTSON: The evidence of Mr Sichler at page 30 explains what the – and there is a diagram, I am reminded, at 33. Perhaps if your Honours would look at the diagram at 33. One sees the way it goes. The routers that take it from New York to the harbour‑side in New Jersey and then to South Brunswick and then it is put up on the web servers at South Brunswick. In effect, the laws are the same. The States are contiguous. The operation has a foot in both camps. The appellant is prepared to be dealt with under either New York or New Jersey law. New York law would be appropriate certainly for the print publication, if that were to be part of the action.
KIRBY J: In the United States they do not have a national common law. Would the law of a court in New Jersey have to apply the law of New York, having regard to the agreement of the parties to be bound by that law?
MR ROBERTSON: Certainly if there was a suit on the contract between a subscriber and Dow Jones, my understanding is that would be the case.
KIRBY J: This may be a minor matter. I just did not quite understand why New Jersey got in on the act.
MR ROBERTSON: Your Honour, because the six servers are located there at what is called a corporate campus. Mr Sichler describes it in his affidavit at page ‑ ‑ ‑
HAYNE J: Page 30, paragraph 4.
MR ROBERTSON: I am obliged. Yes:
I am one of approximately 1,500 Dow Jones employees who work at the South Brunswick campus where many of the company’s financial, accounting and information technology staff also work.
There is also a printing plant on that site. Your Honours, the letter before action was answered by the appellant’s counsel at page 136 – it was answered the next day – who pointed out that the allegations had been put to the plaintiff before publication, offered to correct any false statement that had been made and to publish any proffered reply, but a few weeks later the plaintiff chose to sue in Victoria and your Honours have seen the writ at page 1 and the statement of claim at page 3 issued out of the Victorian Supreme Court.
That process was served on Dow Jones in the United States under the two limbs of the Supreme Court Rules, and those rules are, as your Honours see from the writ at page 1, they take long‑arm jurisdiction where the action “is founded on a tort committed within Victoria” or in (j), that damage was suffered within Victoria from, we say, a foreign tort. The claim was confined to an allegation of damage suffered by a Victorian tort. That is made clear by the statement of claim, paragraph 3, at page 3. One notices at 7(d) on page 5 – this is the claim for punitive damages – that the plaintiff in this case alleges at (d) that:
The defendant published the words without any honest belief in the truth . . . recklessly, not caring whether the imputations were true or false.
That we just note at this stage to say that the allegation being made in Victoria parallels the allegation of actual malice that is required in America under the Sullivan test.
Your Honours, at page 10 you see that the appellant entered a conditional appearance and sought to set aside the process – that is at page 13 – or to stay the action under rule 8.09 and the stay, or the setting aside, were on the grounds made available by rule 7.05(2)(a) namely, that service was that authorised because it was a foreign tort and (b) that Victoria was, as the rule says, “not a convenient forum”.
KIRBY J: Just pausing, you say the plaintiff has not really prosecuted a claim under (j) which in a sense is an easier head for it to rely on? It is long‑arm jurisdiction copied from the United States which says, “It is enough, if there is damage, wherever the tort occurs.”
MR ROBERTSON: Indeed. We would have no ‑ ‑ ‑
KIRBY J: So are we not concerned with (j), in your submission?
MR ROBERTSON: Your Honours are concerned with (j) in the sense that we would not have any contention about being brought in under (j) because quite clearly the damage has been suffered in Victoria from what we say is a foreign tort.
KIRBY J: But that would be enough for (j), would it not?
MR ROBERTSON: It would.
KIRBY J: So that would cure the jurisdiction question?
MR ROBERTSON: The plaintiff in this case frames his action as a local tort. He does not contend that ‑ ‑ ‑
KIRBY J: There is no notice of contention supporting it on that basis, although that was stated in the writ?
MR ROBERTSON: In the statement of claim, it is quite clear that he frames his action as a Victorian tort. Your Honours, we contended that the place of the commission of the tort, for both the purposes of jurisdiction under (i) and choice of law, was New Jersey. Your Honours, the essential facts that enable the characterisation in respect to jurisdiction and a choice of law, are firstly, the fact that this was a site on the World Wide Web.
His Honour, at one or two points in his judgment, says this was not a World Wide Web site. In fact it was. It was a subscription web site, the largest in the world with some 535,000 paid subscribers – and that appears at page 30 – but it could also be accessed free of charge by anyone who wished to by going through a process known as a trial subscription. All they would do was to give a user name, which may not be their real name and an address, which may not of course be their real address, and they would get through to this site within a matter of minutes. That was done by Mr Hammond, the expert whose evidence is at page 150.
There were over a million pages available on that wsj.com site. So that was the first fact about the web site. So far as Victoria was concerned, it was admitted that there were several hundred subscribers to wsj.com in Victoria, including prominent business persons, some of whom it could be inferred, accessed or downloaded the article.
So far as the parties are concerned, the plaintiff, of course, is a prominent Victorian with business, sporting and philanthropic interests in Victoria, but he also has very important connections with the United States. He is chairman of an American public company whose shares are publicly traded on the United States Exchange, and he had for many years, actively solicited American investments in his Australian companies through – his Australian companies sold interests to US investors through what are called ADRs – American Depository Receipts – which are share equivalents. So his Australian company shares were being publicly traded in the United States.
He had been on what were called, “road shows” in America, to urge American investors to buy them, and he had announced before publication – and it is mentioned in the opening paragraph – that he was moving half his business to the United States to take advantage of the strength of the US dollar, in effect to make money in the US from Americans. So he had those important American connections. So far as the appellant is concerned, it has no place of business in Victoria.
KIRBY J: That is challenged, is it not? The respondent says that was never proved, it is simply a matter on which there is no evidence.
MR ROBERTSON: It was something that the judge accepted and, of course, we would have been served in Victoria, if there was a place of business there, but it was said there was no corporate presence and there was no challenge to the fact that we had no place of business in Victoria. The article itself was researched, written and edited in New York and the business administration, as I have said, was at the corporate campus in New Jersey where the web servers were.
There was no challenge to our position that Dow Jones had taken no action in Victoria to advertise or promote “Barron’s Online” or the article itself. What it had done and what the plaintiff relies upon is the fact that it had accepted several hundred subscribers from Victoria over the years since 1977 when the wsj.com started under agreements that were governed by US law. That is at page 312 in volume 2. Your Honours will see the subscriber agreement which is an agreement which is accepted by a click whether you are a subscriber or trial subscriber. After the disclaimers and warranties at the top of page 314 ‑ ‑ ‑
KIRBY J: I wonder how many subscribers actually read all this?
MR ROBERTSON: It is there for them to read on their PCs and they may notice that at the top of page 314, two lines down:
This Agreement, your rights and obligations, and all actions contemplated by this agreement shall be governed by the laws of the United States of America and New York State, as if the Agreement was a contract wholly entered into and wholly performed within New York State.
So that, in effect, what the accessor in Victoria is doing by sending his request messages to obtain pages that are on the web site is obtaining ‑ the pages are obtained by way of performance of this agreement which is governed and entered into in New York.
HAYNE J: What consequence do you say follows from that fact for this litigation?
MR ROBERTSON: There is no privity, obviously, between the plaintiff and Dow Jones, in that respect, although, presumably, he obtained his copy via this agreement. However, we say that the relevance is to show yet another foreign connection with New York, New Jersey, with US law, which makes it unrealistic to characterise these downloadings as local torts that, for the substance test, looking back at the defendant’s acts, this is one of the circumstances that one takes into account, but access to the web site was pursuant to a contract made in New York.
HAYNE J: What is the consequence that you attach to characterising, or failing to characterise, the tort as a local tort?
MR ROBERTSON: The consequence is that Dow Jones is brought in under (j) rather than (i), that it is brought in with, as it were, its American law because that is the law of the place of the commission of the tort, and that in so far as the forum question is concerned, that is decided in the discretion of the trial court bearing in mind or giving weight to the factor that the lex loci delicti is US law.
HAYNE J: These are consequences that you identify as being relevant to the inquiry about forum non conveniens.
MR ROBERTSON: Yes.
HAYNE J: They are not, as I would understand your submission, consequences that you say go to – rather, they proceed from an identification of the governing law of the action.
MR ROBERTSON: They are circumstances which are relevant to the identification of the governing law, because if the test for identifying the governing law in a multi‑State defamation is the test which we say is mandated by Voth, namely you look back on all the events and all the circumstances that led to the downloading of the publication and you see where the critical acts of the defendants occur. That is the place of the commission of the tort. One of the factors to be taken into account when one is looking at the acts of the defendant is that the defendant made this web site and its material available to Victorians pursuant to a contract that they entered into in New York.
GLEESON CJ: Is that quite right? What are the provisions of the contract that impose any obligations on Dow Jones? I just have not been able to pick them up at the moment.
MR ROBERTSON: Your Honour, the obligation on Dow Jones is to supply the electronic data.
GLEESON CJ: Whereabouts is that?
MR ROBERTSON: I think it is assumed on page 313 under “COPYRIGHT AND LIMITATIONS ON USE” and the second sentence:
The content available through WSJ.com is the property of Dow Jones –
You may disseminate it. Then it describes what the web site contains, wsj, includes facts. In the previous page, halfway down under “FEES AND PAYMENTS”:
Your subscription will continue and renew automatically ‑ ‑ ‑
GLEESON CJ: Just at the moment I cannot find any express terms in this agreement that bind Dow Jones to do anything. Any obligations of Dow Jones seem to be implied.
MR ROBERTSON: Your Honour, they certainly are implied. Whether we can pick up a specific reference, can I return to that in my reply.
GLEESON CJ: Yes.
MR ROBERTSON: We would say that the whole tenor of the agreement is that the access to the web site shall be provided. So Dow Jones, in return for the $59 of the actual subscriber, makes the web site available to him or her.
GUMMOW J: You may get something from line 50 on 313.
MR ROBERTSON: I am obliged.
Dow Jones may discontinue . . . and you may always terminate your subscription at any time.
GLEESON CJ: It just occurred to me that if we could find an expression of what Dow Jones agrees to do, it might help characterise its conduct.
MR ROBERTSON: Your Honour, I am obliged and I will return to that, if I may, when we look more closely at the subscription agreement.
CALLINAN J: Mr Robertson, Voth says nothing about misrepresentation cases or defamation cases.
MR ROBERTSON: Your Honour, I will show your Honours Voth, if I may, in a short time but our submission is that the rule that it applies, the substance test, is appropriate for multi‑State defamation, although Voth itself is not a defamation case.
CALLINAN J: No, I know. I think I adverted, perhaps in a dissenting judgment, to different sorts of situations from Voth which arise in relation to misrepresentation and defamation.
MR ROBERTSON: Yes. It is your Honour’s judgment in Hyde v Agar that we actually rely upon. I think it is paragraph 116 where your Honour draws attention to the importance of looking not at the consequences but at the critical acts of the defendant.
CALLINAN J: Yes, but I think in that later case – and again I emphasise it was a dissenting judgment, but I do not think the dissent has anything to do with this issue, where I do draw a distinction between misrepresentation and defamation.
MR ROBERTSON: Is that Pfeiffer?
CALLINAN J: I think that is in Regie, is it not – Renault?
MR ROBERTSON: In Zhang, yes, if I may come to Zhang again shortly. Your Honour may be thinking of paragraph 116 in Agar v Hyde.
Your Honour, so far as the United States law is concerned, the judge had before him an affidavit from an expert in US defamation law, Laura Handman – that is in bundle 2 at page 317 – and that identified as a matter of substantive law the distinctions between Victorian defamation law and United States defamation law which were the subject of analysis and comment in this Court in the case of Theophanous. Essentially, the juridical advantages to the speaker under US law is that the plaintiff bears the burden of proving falsity and that liability is dependent upon proving fault to a lower standard of negligence if the plaintiff is not a public figure. Those are constitutional rights in the United States which American publishers have by virtue of their First Amendment. They are precious in the sense that Justice Harlan quoted in Sullivan, described them as maybe folly to others, but on this we have staked our all.
Every advanced country will or seems to treat aspects of speech as precious in the sense this Court has given a limited immunity to speakers on political and governmental matters subject to a fault test that is based on reasonableness. In Britain now there is, thanks to the courts in the Reynolds Case, a much wider privilege to speak subject to reasonableness on matters of public interest and importance. New Zealand too, in Lange v Atkinson, has provided a slightly different test, but the point that we make ‑ ‑ ‑
KIRBY J: They refused to follow Reynolds, did they?
MR ROBERTSON: They did. They adopted a much firmer test or privilege in relation to governmental – political matters, political speech.
KIRBY J: So as far as I know, we have not had an argument in this Court about Reynolds. It is mentioned in the written submissions but I do not know whether or not it looms in any way ‑ ‑ ‑
MR ROBERTSON: There is a recent decision in the New South Wales Court of Appeal which refuses to follow Reynolds on the basis that Reynolds was decided pursuant to the European Convention of Human Rights which became adopted by the United Kingdom. It came into force in October 2000. We would question that argument on the basis that the Court of Appeal decision in Reynolds made clear that it was developing the wider public interest privilege from the antecedents of the common law in Toogood v Spyring and the early cases which were simply generalised to cover print publication to the public rather than to individuals.
KIRBY J: Is this an issue which would arise later if you are, as it were, fixed in this jurisdiction?
MR ROBERTSON: Absolutely.
KIRBY J: Then the question of what the law and whether there is a larger – qualified privilege would arise, but is it relevant at the stages of governing law or forum non conveniens, or not?
MR ROBERTSON: I only mention it for this reason, your Honour, that these advanced common law countries treat aspects of speech as special, as privileged. They do it in different ways so as to strike the balance between the right to reputation and the right to free speech. What we say is important as a matter of comity is that in selecting an appropriate “choice of law” rule the Court should respect the fact that other countries give rights to their citizens and that publishers in those countries work and publish and put the products of their work up on the web for their own citizens but, of course, inevitably for others and that a “choice of law” rule should recognise and respect the fact that the substantive law by which the publishers work is prima facie appropriate to judge whether their work is at fault.
GUMMOW J: You use the word “choice” and you have used the phrase “choice of law rule”, that is not apt, is it? We are not talking about a “choice of law” rule, are we?
MR ROBERTSON: In this context we are talking about private international law and where the place of the ‑ ‑ ‑
GUMMOW J: We are talking about jurisdiction which is quite distinct from choice of law, surely?
MR ROBERTSON: Your Honour, the first issue is jurisdiction.
GUMMOW J: Yes.
MR ROBERTSON: The second issue is choice of law and as ‑ ‑ ‑
GUMMOW J: The “choice of law” rules are settled.
MR ROBERTSON: The rule may be settled. The question of its application in this case is distinct. As your Honour pointed out in David Syme v Grey, there is no necessary connection between the jurisdictional issue of where was the tort committed and the “choice of law” issue, the lex loci delicti issue because there has to be one and only one place of commission of the tort and so there may be a distinct ‑ in a sense, one may be applying two separate tests, one to jurisdiction, one to choice of law, but as his Honour Justice Kirby pointed out at paragraph, I think it is [101] in Zhang, the same issue may present under both jurisdiction and choice of law, namely, where is this Internet tort committed.
Your Honours, finally on the facts, the Internet and the web was explained by expert evidence of Mr Hammond which is at page 150, and Mr Clarke which is at page 174 and at page 328. We say, in a nutshell, that that evidence establishes that the web is a means of communication unlike any other for three reasons. Firstly, it abolishes territorial boundaries in that speech placed on the web is almost instantaneously accessible from every jurisdiction in the world. Secondly, it is directionless. The publisher does not send information to a particular place; does not know with any confidence where the requests for access are coming; access is obtained by “get” messages or request messages sent from the PC user whose physical location is unknowable and those messages are sent to the server at the server’s physical location and operate electronically by pulling a copy of the requested page from the server. Every other form of communication has a direction, even notices put up on the club noticeboard are directed to members of the club, but ‑ ‑ ‑
KIRBY J: The respondent in his submissions suggests that that is an overly naïve view. The respondent was physically present in Victoria. He had most of his interests in Victoria, he would have had most of his friends to whom his reputation was precious in Victoria, that you would have known that he was in Victoria and that, therefore, if you put it on the web in respect of a real live human person, when that person is in another jurisdiction, you have to expect that it will become potentially inflamed in that particular jurisdiction and that that is something that a person like you just has to take into account.
MR ROBERTSON: A respondent in this case, of course, was very much in America, was active in America, and that was why he had attracted the attention of this American financial magazine. But so far as dealing with the distinctions between the Internet and other forms of communications, a question why is it different to CNN, is that it is directionless because nothing is beamed, there is no path of it and, thirdly, a web publication cannot be effectively controlled, unlike any previous form of publication.
McHUGH J: What do you mean it cannot be effectively controlled? Why cannot your client use a software screening program which scans messages for certain key words such as “Victoria” and then directs that the message be reviewed according to some protocol or by some other person?
MR ROBERTSON: Your Honour, we can do three things. Dow Jones could refuse to accept subscriptions that appear to come from Victoria, but names and addresses are not key because nothing is sent to an address in Victoria. So that will not limit the web site. Victorians who wish to subscribe will simply give addresses in New South Wales and will still access the web, so refusing ‑ ‑ ‑
KIRBY J: In that case, when you receive the subscription may not be contemplating your article about somebody in Azerbaijan.
MR ROBERTSON: Of course. That is the second stage I think Justice McHugh was putting to me, the concept of the electronic barrier, the firewall. That will certainly block some access, but the firewall is very easy to get around simply by a telephone call.
McHUGH J: I hope not. This Court has one.
MR ROBERTSON: It is a security firewall, I am told. But the firewall is simple to get around in the sense that one simply dials an ISP in New York and gets the article that way. The firewall has other problems because if you put a firewall round an article ‑ ‑ ‑
McHUGH J: There is no need to spend any time on this point.
MR ROBERTSON: ‑ ‑ ‑ you identify it and it has the spy catcher effect that everyone wants to see it. But whether we are talking about subscription denials to Victorians or firewalls that make it more difficult for Australians to access, we are, with respect, inviting or encouraging a policy that cannot be in the interest of Australians in blocking them from obtaining valuable information for their businesses that is available presumably on the site.
HAYNE J: The fundamental tension in your case is this, is it not, that the web abolishes territorial boundary, you say contains no direction, is difficult if not impossible of control, and you respond to the consequent breadth of dissemination by a universal rule of singular location, that is, you respond to breadth by singularity?
MR ROBERTSON: Yes.
HAYNE J: Why should you? Why should you respond to breadth by narrowness? That is the fundamental tension in your case, is it not?
MR ROBERTSON: We respond to that by saying that the only way in which we can avoid liability which may be very unfair, because we have prepared the article so it is fireproof by American law and suddenly we find there is a law of some place in the world that will hit us with punitive damages because we ‑ ‑ ‑
HAYNE J: That is to say, it is a rule of convenience to the publisher.
MR ROBERTSON: No, it is a rule ‑ ‑ ‑
HAYNE J: That is the only justification thus far advanced, Mr Robertson.
MR ROBERTSON: Let me try and advance another. It is a rule of convenience but it is a rule of importance to the public because the only way the web owner can avoid liability is not to put the material on the web at all, to confine publication of the material to the jurisdiction in which it is justifiable. The jurisdiction by which it is written, researched and so forth is the jurisdiction where the publisher ensures that by that jurisdiction’s laws he is safe from suit.
It must be in the interests, first of all of comity, of giving effect to the right of sovereign States to protect their speakers within those States and it must be in the interests of the Australian public, and indeed the social utility, of this particular form of instantaneous communication to have a rule which does not deter foreign publishers from putting information on their web sites.
GLEESON CJ: Mr Robertson, suppose the danger against which a publisher was seeking to protect itself was not defamation but terrorism. Could it respond to that by uploading information in two places?
MR ROBERTSON: The terrorism being the ‑ ‑ ‑
GLEESON CJ: Destruction of a campus.
MR ROBERTSON: Yes.
GLEESON CJ: Might somebody in a business such as your client respond to a problem like that by uploading the same information at New Jersey and India?
MR ROBERTSON: Yes, indeed, having a backup site.
GLEESON CJ: Yes.
MR ROBERTSON: The substance test, we say, would get to the heart of the matter where the editorial decisions are made, where the principal establishment is, where the place where the decision has been taken to upload. This is, if you like, the attraction of applying the substance test. As Dicey and Morris says, it does weed out – I mean, the plaintiffs take another example of the unscrupulous publisher who sets up in the defamation haven in Liberia. Again, the substance test gets to where the critical decision which has given the plaintiff his cause to complain is made. It is not the Cook Islands defamation‑free law that the publisher is going to be able to survive by. It is, by application of the substance test, where that publisher is effectively located and where the critical decision was taken that gives the plaintiff his cause of complaint.
GAUDRON J: But what is that critical decision that will lead you to the substance?
MR ROBERTSON: The decision to publish and put ‑ ‑ ‑
GLEESON CJ: Was that made in New York or New Jersey?
MR ROBERTSON: The decision to publish is probably made in New York but the actual placing on the web is made in New Jersey.
GLEESON CJ: Why does the substance test lead you to New Jersey rather than New York?
MR ROBERTSON: Your Honour, simply because there is an establishment in New Jersey which services the web site. The business and administration is conducted there. It may be – and I do not shrink from the fact – that this is one of those, we say, few cases where there may be a difficulty. It is a difficulty that does not – because there is no difference, in effect, between the law of New Jersey and the law of New York, it is not a – and the respondent is prepared to deal with the case in either jurisdiction but I accept ‑ ‑ ‑
GLEESON CJ: Yes, but we are not in a state of negotiation with the respondent or with the appellant.
MR ROBERTSON: No.
GLEESON CJ: The difficulty of demonstrating why it should be New Jersey rather than New York, in the present case, illustrates that the substance test itself is far from clear, does it not?
MR ROBERTSON: It demonstrates that there may be difficult decisions, and your Honours say that in Zhang and in Pfeiffer, that there may be close calls. Here we accept and have always argued that the place of the print publication is New York and the place of the web publication, because of the 1,500 employees and the business set‑up there, the web business set‑up, is New Jersey. Usually, there will be no difficulty in the substance test because the place of the – and I think this appears, if one looks at the interveners and where they have their web sites, there is no difficulty in the case of most of the interveners in identifying the place where the critical decision is made.
McHUGH J: How does this theory operate in a “passing off” case, where the reputation for goods is only in a particular jurisdiction? Supposing Time magazine has no reputation in Liberia and I set up a web site there, and I purport to publish publications by Time magazine which can be uplifted in Victoria. Now, Time has no reputation, on the hypothesis, in Liberia, so there is no cause of action for passing off, even though all the damage is done to it in Victoria.
MR ROBERTSON: It depends where “you” are. If “you” the proprietor and perpetrator of this fraudulent web site are located in Victoria then there would seem to be no difficulty in suing you in Victoria.
McHUGH J: No, but your theory – the damage in a “passing off” action is done where the reputation for the goods are.
MR ROBERTSON: Yes.
McHUGH J: And that does not necessarily coincide with the place where the decision to publish is made, and on your theory of the case it would seem that in many situations you may have no cause of action at all, even though you suffer damage.
MR ROBERTSON: Your Honour, it may be that the “passing off” rule would involve a search for a different place, but if Time magazine has no reputation in Liberia, the web site is in Liberia and the proprietor of the web site is in Liberia, then it has no cause of action in Liberia, that would follow, but it may, if the proprietor of the web site has a presence in another country or promotes the web site in another country, it might be difficult to see why Time magazine should be concerned unless the mock Time and its web site were actively promoted by the publisher going to Victoria and placing advertisements in Victoria and papers and so forth, and that would entail liability in Victoria, on my theory, which makes express allowance for cases where the publisher has turned its back on the protections of its local law and has entered the plaintiff’s jurisdiction in order to promote or advertise its web site and so instigate downloadings.
If that were the case, as it was in a sense in Distillers where the failure had been the sending of information which did not include a warning to New South Wales, if that were the case, then the act of which the plaintiff complains would be the defendant’s act in Victoria in instigating the downloadings and looking at it from as it were the State interest comity position that we set out in our case, the publisher would waive or abandon the protections of the law under which he operates by virtue of the fact that he had gone abroad and was active in the plaintiff’s State, or any State in which the plaintiff had a reputation.
GAUDRON J: But comity surely, Mr Robertson, cannot just be restricted to the countries whose legal systems we respect, Now, it is quite conceivable that people can put on the Internet material which on being released in one of the countries whose legal systems we respect, is criminal by the laws of that country. A terrorist in Azerbaijan or like place may do the equivalent of calling fire on the Internet in Azerbaijan. We have to give them comity too.
MR ROBERTSON: Criminality is territorial, at criminal jurisdiction.
GAUDRON J: Exactly. Although the law of conspiracy has extended that somewhat.
MR ROBERTSON: But the Azerbaijan web site that ‑ ‑ ‑
GAUDRON J: We will say Azerbaijan ‑ it could be anywhere ‑ says “There will be a further bombing in New York tomorrow at 10 am American time” which causes panic in New York.
MR ROBERTSON: Yes.
GAUDRON J: It is intended to have its consequences in New York, it has its consequences in New York, and it is put on the web site elsewhere.
MR ROBERTSON: If your Honour is postulating the Azerbaijan web site that, by putting up false, albeit not defamatory, in the circumstances, information, creates panic and injury in New York and a damages claim is brought in New York against the proprietor of the Azerbaijan web site who is in New York.
GAUDRON J: No, who is not in New York.
GUMMOW J: That is the problem for you.
MR ROBERTSON: Seeks to bring in to New York ‑ ‑ ‑
GAUDRON J: Well, ceases to have a writ ready to serve the minute that man does arrive in New York, or woman arrives in New York. I mean, there is potential at least, is there not, for vast economic damage to be perpetrated on the Internet?
MR ROBERTSON: Yes.
GAUDRON J: And one may assume that there are people who would like to cause such damage in developed countries like the country in which the appellant carries on business.
MR ROBERTSON: Yes.
GAUDRON J: Well, how do we look to the substance then?
MR ROBERTSON: Well, the same test applies. Civil liability depends on the intention to cause damage in the jurisdiction. The example that your Honour gives will be met by application of the substance test and by finding by which law the ‑ ‑ ‑
GAUDRON J: Well, that brings you to the question: what is it that determines substance? I should not have thought it was simply where decisions are made, whether they be in the realm of defamation or deliberate intention to cause economic harm or conspiracy to cause economic harm.
MR ROBERTSON: If made with the intention to cause injury in New York, that obviously is a factor. It may be ‑ ‑ ‑
GAUDRON J: Well, now, here, it may be hard to impute intention, but what is the difference between intention and without regard to whether it causes harm to the reputation in Victoria?
MR ROBERTSON: There is a difference between intending to cause harm in Victoria and really not knowing whether harm is going to be caused or not knowing whether it is going to be caused in Victoria or America or whatever. The issue that the substance test looks to is the critical act of the defendant and it finds a location for that act ‑ ‑ ‑
GAUDRON J: Well, you keep talking about the critical act. What you seek to do, do you not, Mr Robertson, is get away from the elements of the tort?
MR ROBERTSON: Yes.
GAUDRON J: And why should we move away from the well‑understood elements of the tort any more than we should from the well‑understood elements of a crime, or what is involved in breach of contract or breach of confidence or the like?
MR ROBERTSON: Because, with respect, your Honour, the elements of the tort do not give other than an artificial answer. They do not give a realistic answer. The elements of the tort of defamation may merely be publication causing damage, but the actual action of defamation is very much affected by the defendant’s acts. They are relevant in terms of a privilege defence. They are relevant in terms of malice. They are relevant in many respects in considering questions of – fair comment is another example where the defendant’s act is relevant. We say that to look only at the ‑ ‑ ‑
GAUDRON J: Well, they are relevant to defences.
MR ROBERTSON: Yes.
GAUDRON J: It seems to me that your cause of action is one thing in this area; your defence is quite another. There may well be scope within the existing field of law for the elaboration of defences to take account of the development of Internet services, but why go to the cause of action as distinct from defences?
MR ROBERTSON: Your Honour, even looking at the cause of action in Victoria as the judge found comprised by the multiple publication in Victoria through different downloadings, it would be artificial, in our respectful submission, not to see the foreign element, the foreign origin, of the publication.
GAUDRON J: Exactly. So when it comes to notions of reasonableness, recklessness or the fairness of the comment, it may well be appropriate to have regard to the fact that it was reasonable by reference to the laws of the place where the publication is centred, if you like, but that is a different issue from what you contend for, it seems to me, Mr Robertson.
MR ROBERTSON: With respect, we contend for that position and the only way we can reach that position is by having the choice of law as US law, because otherwise ‑ ‑ ‑
GAUDRON J: You say that is the only way. I am putting to you that there are other ways. You are suggesting you could only get that by forum and/or by ‑ ‑ ‑
MR ROBERTSON: Choice of law.
GAUDRON J: Well, location of the tort in a way which will give you a law of that kind. I do not see that that is right. It may well be that the law of defamation does have to develop to take account of these developments and it might be that it develops through notions of reasonableness having regard to the place of uploading or to the laws of the place of uploading, but it does not seem to me that picking location of the tort is the only way to take account of the development of the Internet.
MR ROBERTSON: It may not be the only way if local law were to develop, but if I can just give your Honour an example ‑ ‑ ‑
GAUDRON J: Your argument would stultify local law though, would it not, at the inception? Any development would be stillborn.
MR ROBERTSON: It may be that requiring Victorian courts to apply American law rather than stultifying it may assist its development.
GAUDRON J: No, I did not say apply American law.
KIRBY J: That is a very American viewpoint which is not shared by the rest of the world. The whole rest of the world does not share. It has to be very clear. The international covenant on civil and political rights does not share the American, as others see it, obsession with free speech. There are countervailing human rights, including reputation and privacy.
MR ROBERTSON: We accept that entirely. If I could give a practical example that emerges from this case: every balance of free speech and reputation by a court has an effect in the newsroom. Under American law the result of Sullivan has been that investigative journalists put all their allegations to a potential public figure plaintiff before they publish. One can see that in operation in the questions that the respondent was asked at pages 138 to 140. This is the result of the Sullivan test but, to avoid a finding of express malice and the colossal damages that are their result, the American investigative journalist has to put the questions precisely to the person he is about to publish. If that individual then responds saying, “You’re barking up the wrong tree; this is false”, then if he goes ahead and takes the risk of publishing, the risk of colossal damages results.
This is not something that under Victorian law resounds at all but it is what one might call a form of reasonable approach or professional practice that follows from the local defamation law.
Coming back to your Honour Justice Gaudron, that is the way the American journalist has operated professionally to obtain the protection of American law, but that does not ‑ ‑ ‑
GAUDRON J: What protection do you say you are obtaining? You are getting the benefit of a defence?
MR ROBERTSON: Yes.
GAUDRON J: I see no reason why it would not be possible to argue in Australia we did it this way because that is how it is done in New York, or what have you, and we believed that was the proper way to act and the responsible way to act, having regard to our laws. I have no reason – why it could not be held as a matter of fact in this country that to so act was reasonable.
MR ROBERTSON: That would be the case were Victorian law to accept a form of Reynolds privilege, but at the moment ‑ ‑ ‑
GAUDRON J: Not entirely. Reasonableness, ultimately, is a question of fact, is it not ‑ ‑ ‑
MR ROBERTSON: Yes.
GAUDRON J: ‑ ‑ ‑ in the United States as much as in Australia?
MR ROBERTSON: Yes, but unless we can bring ourselves within Lange qualified privilege here – and the argument vehemently made against it is we cannot because we were not writing about a government or political matter – then the issue of reasonableness does not figure in a defence because the common law defamation is a tort of strict liability.
GLEESON CJ: Mr Robertson, the rule for which you contend is that which appears in the first sentence in paragraph 31 of your written submissions, is that right?
MR ROBERTSON: Your Honour, yes.
GLEESON CJ: That rule contains two qualifications which I would like to understand a little better. The first qualification is that the rule only applies assuming the place of uploading is “neither adventitious nor opportunistic”.
MR ROBERTSON: Yes.
GLEESON CJ: What do you mean by “adventitious or opportunistic”?
MR ROBERTSON: Opportunistic is the tax haven example, the unscrupulous publisher, the spectre of whom is conjured up by the respondents, who sets up the server in a defamation‑free zone. The substance test, we say, requires him, if he is going to Liberia, to put his editorial and administrative establishment there as well.
GLEESON CJ: Would the same kind of qualification apply in relation to the tort of passing off?
MR ROBERTSON: I would have thought so, without having ‑ ‑ ‑
GLEESON CJ: There are some intellectual property law free zones.
MR ROBERTSON: Yes, but again the substance test would require the establishment to be there, something other than a server. If I could show your Honours the way Dicey and Morris approached this point, it perhaps will bring out the arguments for and against. It is Dicey and Morris at page 1568 at 35‑137. I think this is the most authoritative consideration of the point which has not arisen in the courts. It begins by admitting that:
the place of publication approach gives rise to practical difficulties in cases where defamatory material is disseminated through the internet, not least because of the potential number of countries in which access may be had to that material. Nonetheless; it has been maintained –
and it refers to other textbook writers –
that the tort is to be taken to have been committed in the country where the material is “downloaded” or retrieved.
And then gives the arguments that have been made for that:
defamation over the internet is not, perhaps, conceptually different from defamation by other media: rather it merely increases the number of countries where the offending material can be accessed –
and we say the Internet is different –
Secondly, the potential of the internet in this context is relatively well‑known and those who make use of it in a manner which is likely to involve the law of defamation should bear the risk –
we say that result is to reduce the amount of information available on the Net –
Thirdly –
is an English-specific point and –
Fourthly, as pointed out above, the claimant is not compelled to rely on the law of every country where publication takes place, and is free to limit the claim to one such place if he or she so wishes.
That has, in effect, been done by the plaintiff in this case by limiting the claim to Victoria and, indeed, limiting the ambit of what is sued on.
On the other hand, localising a defamatory statement on the internet is somewhat unrealistic. It might therefore, be more appropriate to regard the place of commission in such cases, as the country in which, in the light of all the circumstances of the case, the substantial events which give rise to the claim have occurred.
CALLINAN J: I do not understand that, Mr Robertson. In the past “The Times” newspaper would have gone to every colony in Australia. It might have got there rather late, but it would have gone to every colony in Australia, every province in Canada, it would have gone throughout the whole of that part of the world which was coloured red. I do not see the Internet as introducing anything particularly novel, you just get it more quickly.
HAYNE J: Sometimes.
MR ROBERTSON: You get it more quickly, you get more of it because you can ‑ ‑ ‑
CALLINAN J: It just means it is more penetrating and it has a greater capacity to do harm.
KIRBY J: It can be searched with a particular name and thereby you can get a lot of material on a particular person which once would have been hidden in a vast mass of the hard copy.
MR ROBERTSON: Yes, the researcher’s potential is remarkable, but the essential difference is “The Times” can be stopped, of course. The publisher controls which parts of the world coloured red he puts “The Times” in.
CALLINAN J: But there is a profit imperative in wide penetration anyway, is there not? The more your client’s publication online can penetrate, then the more profit it is likely to make. Also, if in fact there is less access in a particular place to what goes online universally, as it were, then that goes to damages.
MR ROBERTSON: Yes.
CALLINAN J: If there are only 1,700 readers, then the jury or the judge will no doubt take that into account. I do not see any of the difficulties, frankly, or any of the particular novelty with which the current authors of Dicey and Morris seem to be concerned, not at the moment, anyway.
HAYNE J: The attribution of unreality which the authors make depends, does it not, upon the question that is asked? If you ask the question, “Where was it published?”, that may be a difficult question in relation to the Internet. But if instead of asking, “Where was it published?”, you asked, “Was it published here?”, the answer is self-evident. Unreality depends entirely on what question you ask and does your question assume a singularity of answer which the former form, “Where was it published?”, made.
MR ROBERTSON: The question, “Where was it published?”, is in a way simply a threshold question by which law ought it to be judged because where punitive damages are claimed by use of a law that does not reflect the law under which the information has been produced and crafted, then the issue of injustice – I mean the central injustice that the publishers complain of here and it is an injustice that can be claimed by Australia web publishers hailed into court in Asia or, indeed, in America – is that they are being judged by a standard under law that they did not produce their articles by reference to.
HAYNE J: But that injustice, if that be the appropriate characterisation of the consequence, flows from rules about jurisdiction, flows about rules determining choice of law.
MR ROBERTSON: But those rules, we say, can be made to provide substantial justice by applying the “substance” test as set out in Voth to the reality of Internet publication, even if you say, “Well, there are 300 separate torts in Victoria”. If you look back on where is the defendant’s act that gives the plaintiff his cause for complaint, looking back in a commonsense way, as Voth says, you find that in America and not in Australia.
McHUGH J: But why?
HAYNE J: But the fundamental tenet of the common law is that jurisdiction is assumed as a result of service, not as a result f the subject matter of the suit. Rail against that or no, that is the fundamental tenet and once you have started down that path ‑ ‑ ‑
MR ROBERTSON: Sure. But, your Honour, the question of service decided by rule (i) is the question of where is the tort committed which is the same question as one has to ask on a “choice of law” inquiry. Now, if we are wrong, as far as the jurisdiction issue is concerned, it may be that a different answer is given when one turns to choice of law. It may be that the result which is appropriate is that the publisher, the foreign web publisher, is brought in from long‑arm jurisdiction because of the individual torts here is – but is judged by the law by which he has, in effect, composed the publication and the forum issue which is there for the judge at the end of the day is, bearing in mind that the Victorian court will have to apply American law, is the Victorian court a clearly inappropriate place for the action.
KIRBY J: That is the third step, but do you see it, therefore, as three steps? First of all, to find whether jurisdiction attaches by virtue of the Victorian rules?
MR ROBERTSON: Yes.
KIRBY J: Secondly, if it does attach, to identify what law, once jurisdiction attaches, is applied in the jurisdiction, and, thirdly, once knowing that, to ask, with that in mind and other matters in mind, whether or not the jurisdiction is a convenient or a not inconvenient jurisdiction?
So there are two views on the question of whether defamation law in American is plaintiff friendly or not, but the attraction in principle for the plaintiff of going to the place of the publisher’s domicile is, firstly, that law – assuming it to be a civilised law – will provide its own means of speedy redress and suitability.
I mean, in Europe, you have declarations of falsity and rights of reply that can be used instantly. In America, we saw the offer of correction and a right of reply, and we saw the principle of good journalism in America dictated by the law that you actually put the allegations down first.
Other countries have other provisions for assisting the plaintiff, but the way they will bite on the publisher in the publisher’s domicile. So that is the first attraction for the plaintiff in going to where the publisher is.
The second attraction is that if the plaintiff wants his home State trial, very often he gets it under our formula because he is brought in, because the plaintiff suffers damage in his home State, therefore home State has jurisdiction. Choice of law, if the publisher has produced according to his foreign State then the choice of law is the foreign State, but ‑ ‑ ‑
GAUDRON J: Now what is the jurisprudential basis for that? First of all, is the single publication rule a “choice of law” rule, and if so what is the jurisprudential basis that has been assigned to it? I mean, I could understand it as a venue or forum non conveniens rule but is it really a “choice of law” rule?
MR ROBERTSON: It is appropriate for choice of law, in our submission. It is a position that the common law has taken ‑ ‑ ‑
GUMMOW J: It did not start off life as a “choice of law” rule. That is what I was putting to you.
MR ROBERTSON: I think it started life – and I need to check. I cannot recall whether it was because of an interstate – I think Keeton v Hustler – but there was certainly a number of cases which in the early stages were limitation cases, and I would need to check Hartmann, Keeton and Ogden which would provide the answer, because they were the cases in 47 and 48 where the single publication act rule was – but Dean Prosser in his dismal swamp article, that we have put on the list, the famous 1953 article in the Michigan Law Review, certainly argues that it should be a “choice of law” rule.
GAUDRON J: But, I mean, if it is not a “choice of law” rule for defamation in New Jersey, and I do not think your evidence goes so far as to say it is, then we may simply be buying the problem that Justice Gummow adverted to where New Jersey will have to decide what the true “choice of law” rule is, which may bring it back to Victoria which would be largely an exercise in futility. And if it is a “choice of law” rule, I am very interested to know what its basis is – I mean, what is its theoretical foundation?
MR ROBERTSON: It is certainly part of the law of New Jersey and of New York, the single publication rule.
GAUDRON J: But for what purpose? It may be for the purpose of anti‑injunctions perhaps to restrain multiple proceedings? I mean, who knows.
MR ROBERTSON: Most of the cases are either, from my recollection of them, on either Limitation Act points or choice of law, and sometimes both.
GAUDRON J: Choice of law or choice of venue?
MR ROBERTSON: Choice of venue between different States which, although they all have the United States constitutional protections, may have some local differences in limitation periods.
GAUDRON J: Perhaps you could give us a further note about it, if you could possibly, Mr Robinson.
MR ROBERTSON: Yes, if I could by maybe Friday at lunchtime send in your Honours a separate note on the ‑ ‑ ‑
GUMMOW J: There is also a recent decision of the English Court of Appeal called Loutchansky v The Times. Have we been taken to that in the submissions?
MR ROBERTSON: Yes. We referred to it in our case. It is a decision of the Court of Appeal last year.
GUMMOW J: [2002] 1 All ER 652.
MR ROBERTSON: That is right.
GUMMOW J: Is there any application for leave to appeal to the House of Lords in that?
MR ROBERTSON: Yes, there was.
HAYNE J: And leave was refused, as the Times was rather quick to publish, without reasons. Leave was refused without reasons.
MR ROBERTSON: Leave was refused without reasons about three weeks ago, I understand. The position in Loutchansky is interesting because it was argued that the single publication rule should be the rule for the Internet because the common law should evolve to protect archives. The Court of Appeal said, firstly, the Duke of Brunswick’s Case is too entrenched in our law to change it. That was the basis of the Master of the Rolls decision. Secondly, the particular question that was posed in Loutchansky [No 2] could have been solved by, he said, using the technology of the Internet, the hyperlink, to explain to the accessor that this particular article had been sued upon for defamation. That would remove the sting.
It was a case where the Times had left a defamatory article on its archive and the Master of the Rolls, having said he was bound by The Duke of Brunswick’s Case, then said the Internet – as far as archives are concerned, he said archives are not very important, which is a position that would not appeal, I suspect, in this jurisdiction, but it certainly compared with news, but he said the Internet has its own way of dealing with it by removing the sting, ie, leaving the defamatory article on the web site with a hyperlink saying that its truth had been contested. But that is, I think, the only assistance that your Honours will get from Loutchansky.
KIRBY J: It seems very small assistance, given that once you get into the Internet everybody can download it and circulate it in their own systems and along their own networks and to their own connections. It just goes on and on.
MR ROBERTSON: It may be of interest for your Honours to see Lord Leicester’s argument which is set out in some detail, but it was met quite flatly with the reference to Berezovsky which had said that so far as print publication is concerned The Duke of Brunswick was too entrenched to change. It was by reference to that that the Master of the Rolls assumed that applied to Internet. Can I deal with ‑ ‑ ‑
GAUDRON J: Before you go, Mr Robertson, can I, having thought about this single publication rule a little bit more, it seems, at least, a logical possibility that it started life as a rule relating to damages, proving your damage and if that be so, it would seem logical, therefore, that it could be relied upon by courts in other jurisdictions to stay proceedings in those courts as vexatious and, additionally, it could perhaps be relied upon to get anti‑suit injunctions in the forum or to extract undertakings of the kind that were given in this case. That makes it something equivalent to a rule relating to vexation.
HAYNE J: And, indeed, Dean Prosser in the article you refer us to at page 962 at about line 12 seems to suggest, perhaps, that it is rooted in concepts of vexation.
MR ROBERTSON: Well, certainly the cure for the multiple publication rule that the courts of this country and other countries have used to mitigate the problems have been the inherent power to stay actions for abuse of process, multiple actions, have been the rule that you cannot collect for more than one lot of damages and rules of that sort.
GAUDRON J: But that does not make it a “choice of law” rule.
MR ROBERTSON: No, it does not, but it does mean that the ‑ ‑ ‑
GAUDRON J: Which you want to make it, in a sense, or you want something very similar to a single publication rule as a “choice of law” rule.
MR ROBERTSON: We say that that might certainly apply in relation to the Internet defamation. What we do contest, however, and I should make this correction, my learned friend said that American courts do not adopt this approach at all to foreign courts. I should cite to your Honours the case of Desai v Hersh just to show what the reaction of American courts had been when foreign plaintiffs have come in touting their own law. Mr Desai, of course, was the Prime Minister of India who sued on a book that was published in both India and America and he claimed damages under Indian law, which was akin to British common law, as well as under American law.
The discussion as to whether the First Amendment could have an extraterritorial reach is quite interesting, although it was only a District Court case. The passages that we would rely upon are those at – in fact, you can see from the headnote 5:
For the purposes of defamation suits brought in United States courts, First Amendment protections do not apply to all extraterritorial publications . . . only where speech published in a foreign country is about a matter of public concern in United States can First Amendment protections “spill over” our borders.
Then at 6:
In instances where plaintiff is a public official or figure . . . apply to domestic publication, those same protections will apply to extraterritorial publication of same speech where the speech is of a matter of public concern and publisher has not intentionally and directly published the speech in the foreign country in a manner consistent with intention to abandon First Amendment protections.
At page 679, on the right‑hand column, where the court accepts that if the publisher – and this, of course, is in relation to a book – had gone out to exploit the foreign market – and one finds that halfway down – then he would not be able to obtain First Amendment protections.
GUMMOW J: This is one decision of a District Court judge in the United States. Is there any other courts of appeal decisions?
MR ROBERTSON: There is a discussion of this decision by Mr Justice Chasanow, in the Maryland Supreme Court in Telnikoff v Matusevitch, and we set that out in our case. We rely on Mr Justice Chasanow or cite Mr Justice Chasanow’s approach, although it was a dissenting judgment.
GUMMOW J: There is endless writing on the First Amendment in the United States. There must have been a lot of scholarly writing about this question.
HAYNE J: And a lot of writing.
MR ROBERTSON: There is a lot of writing, your Honour. Just how scholarly it is and how much further it takes us from Dicey and Morris – quite frankly, the Internet and the problems ‑ ‑ ‑
GUMMOW J: No, not worrying about the Internet. This question of the First Amendment’s application to, what one might say, its foreign affairs. There must be a lot of writing on that.
MR ROBERTSON: Well, your Honour, we will search the Net again but I think that you will find that apart from Desai - and there is a case that is referred to in Desai where the President of Nauru sought to sue in Guam - that they are the only two cases that we are aware of where this problem has been discussed.
HAYNE J: Just to take you back a moment to the single publication rule and its influence on “choice of law” issues, whether it is to be given effect to may be affected by the fact that Anglo-American and Australian conflicts rules have resolutely set their face against any notion of dépeçage, any notion of splitting issues and assigning different applicable laws to those issues. If you apply a single publication rule, do you say the consequence is you end up with a singular applicable law as the law of the cause which necessarily, therefore, fails to give any account to any consequences that other law districts may assign to events that have occurred within that law district?
MR ROBERTSON: It gives those consequences where the events that have occurred are the result of the defendant’s direct activities, when the defendant goes to the law district to advertise or promote and so as to instigate downloadings. That displaces, if you like, the global approach because he has abandoned or waived the First Amendment, in the case of an American. We say that the single publication rule applied to the Internet gives the most rational result because it enables all the damage to be taken into account.
Could I use my last two minutes to reply to the point that I think Justice Gaudron put to me this morning and put to Mr Sher, which he eagerly accepted, namely that a rule that required the publisher to look only at the places where the person he mentions has a reputation would be not too much to ask. Your Honour, I would only instance Cocoa Cola and Kylie Minogue or Mr Wolferson or Leyton Hewitt or BHP or Rupert Murdoch, there are now powerful people in this world who have reputations in many countries. In fact there is a recent decision of the English Court that you do not need a reputation in England. It was Colonel Gadaffi’s son, who had never been written about or known about, but when a defamatory article was published the court said, “Well, he did not have a reputation before, but he has a bad one now, so he can sue.”
CALLINAN J: Well, damaged is presumed, is it not, in defamation?
MR ROBERTSON: Yes.
CALLINAN J: That is really a function of that rule, Mr Robertson.
MR ROBERTSON: That is right, but to require the publisher to check up by hiring lawyers in five or ten countries where your international public figure has a reputation and could sue ‑ the plaintiff here could have sued in any Australian State, in Israel, in England, in Tuvalu ‑ whereas many steps have been taken to legal the article and ensure that it complies with the law where the publishers operate, that is too much to ask. It was regarded by the English Courts in the late 19th century as too much to ask of subscription libraries and booksellers and so it is too much to ask if the principle of free speech is to be supported. Your Honour Justice Callinan spoke of the profit that publishers make, but we are here ‑ ‑ ‑
CALLINAN J: I am sorry for raising that word.
MR ROBERTSON: No. Let me deal with it quite brutally. There are 300 subscribers who pay $59 for the right to subscribe to this valuable business web site. That comes in at about $US18,000 and of course there are a lot of deductions, so I guess about $12,000 is accrued from Victoria.
CALLINAN J: No doubt that will be put very persuasively to a jury in Victoria in due course when it comes to assess the damages.
MR ROBERTSON: Your Honour, in terms of a hard‑nosed publisher in America with that sort of figure saying, “Well, if Justice Hedigan’s judgment says we can avoid massive legal costs of being sued in Victoria simply by not taking Victorian subscribers or by erecting a firewall, but it won’t work, let’s do it.” That is the, if you like, the hard‑nosed money man, in making these decision in America about publications that ‑ ‑ ‑
CALLINAN J: I cannot believe that American corporate lawyers and defamation lawyers would not have fully assessed those matters. It is inconceivable to me that that has not been done.
McHUGH J: If I remember rightly, did not the United States Supreme Court in Herbert v Lando criticise or reject the notion that there was a chilling effect on publishers?
MR ROBERTSON: I do not think they did that. The House of Lords in Derbyshire accepted that there was a chilling effect on publishers by libel actions, as your Honour said in Theophonous. But the danger is that publishers may ‑ if the rule for the Internet encourages publishers, as the present judgment does, to refuse subscribers from particular law areas where the law may be very different to the area by which the article has been prepared ‑ ‑ ‑
GAUDRON J: They will not have many people subscribing outside America. I mean, if you are right, they will be talking to themselves.
MR ROBERTSON: But that would be ‑ ‑ ‑
GAUDRON J: So be it, that is not a choice they are going to make, they want ‑ ‑ ‑
KIRBY J: It is going to be hard for them to contain it, anyway.
MR ROBERTSON: That may not be in the Australian public interest where the latest object of the Electronic Subscription Act is ‑ ‑ ‑
GAUDRON J: It will not be in American interest either. As a practical matter, it will not be in America’s interests either.
MR ROBERTSON: Your Honour, there it is, if I can put it this way, and I hope what I put is a neutral way and fair way that that would not be the universal solution that Lord Bingham indicates has to be found to this problem everywhere to encourage any area to log off.
GUMMOW J: Yes, but you want to find the universal solution at the top. There are various possibilities at the other end which you do not want to get into.
GAUDRON J: Indeed, if you move your single publication to the other end so that a plaintiff who has sued in one jurisdiction which accepts jurisdiction should not sue elsewhere, there is a lot of basis for it, not only in the law of damages but perhaps in notions of Anshun-type estoppel and, as I put to you earlier today, there may well be a necessity for things to change at the other end by reference to the Internet, but why at the front end?
MR ROBERTSON: The answer that I made is that on the ‑ ‑ ‑
GAUDRON J: That is a policy decision. You make that argument by reference to policy rather than by reference to legal principle?
MR ROBERTSON: By reference to policy and to comity.
GAUDRON J: Comity is a funny word.
MR ROBERTSON: It is.
GAUDRON J: I mean, really, we know that judges of various countries use it when they want to.
HAYNE J: Before they apply the law of the forum.
GAUDRON J: Yes, and, for example, it is patently clear, I should have thought, that notwithstanding the apparent difference of wording in relation to forum non conveniens, the probabilities are that throughout the common law the results are pretty much on a par.
KIRBY J: I am not sure about that.
MR ROBERTSON: Your Honour, at this hour of the day I will not detain your Honours with any disposition on comity, and thank you very much for hearing ‑ ‑ ‑
KIRBY J: Mr Robertson, when you send in the note to answer Justice Gaudron’s points would you respond to what Mr Sher put? I thought he put some pretty telling arguments on the first issue relating to paragraph (j) of the rules and also the print copies that are distributed, because they seem to be fatal to your argument.
MR ROBERTSON: Yes, there is a passage, I can tell your Honour now, in the judgment. It is in the first part of the judgment at page 491, line 45 where the judge says:
it is likely that my decision on the print aspect would, as a matter of practicality, dispose –
of it. I will certainly put it in writing.
KIRBY J: Yes. It is only really on the first issue and it does not touch the main questions that have to be decided in this case.
MR ROBERTSON: Certainly.
GLEESON CJ: Thank you, Mr Robertson. We will reserve our decision in this. Yes, Mr Walker.
MR WALKER: Your Honour, may I hand up that which Justice Gummow suggested we do. The bulk is explained only because we have put a clean copy as well as a copy that reveals the changes at the back of each of those of our submission. I am asked by Mr Sher to make it clear that the affidavits upon which we relied in support of our application to intervene are only that, of course, and, in particular, we do not rely at all upon that of Mr Harding. May it please the Court.
GLEESON CJ: We will reserve our decision in this matter. We will adjourn until 10.15 tomorrow morning.
AT 4.24 PM THE MATTER WAS ADJOURNED
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