Dow Jones & Co Inc v Gutnick

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HIGH COURT OF AUSTRALIA

GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

DOW JONES & COMPANY INC   APPELLANT

AND

JOSEPH GUTNICK   RESPONDENT

Dow Jones & Company Inc v Gutnick
[2002] HCA 56
10 December 2002
M3/2002

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of Victoria

Representation:

G R Robertson QC with T F Robertson SC for the appellant (instructed by Gilbert & Tobin)

J L Sher QC with M F Wheelahan for the respondent (instructed by Schetzer, Brott & Appel)

Intervener:

B W Walker SC with S E Pritchard intervening on behalf of Amazon.com Inc & Ors (instructed by Blake Dawson Waldron)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

  1. GLEESON CJ, McHUGH, GUMMOW AND HAYNE JJ.   The appellant, Dow Jones & Company Inc ("Dow Jones"), prints and publishes the Wall Street Journal newspaper and Barron's magazine.  Since 1996, Dow Jones has operated WSJ.com, a subscription news site on the World Wide Web.  Those who pay an annual fee (set, at the times relevant to these proceedings, at $US59, or $US29 if they are subscribers to the printed editions of either the Wall Street Journal or Barron's) may have access to the information to be found at WSJ.com.  Those who have not paid a subscription may also have access if they register, giving a user name and a password.  The information at WSJ.com includes Barron's Online in which the text and pictures published in the current printed edition of Barron's magazine are reproduced.

  2. The edition of Barron's Online for 28 October 2000 (and the equivalent edition of the magazine which bore the date 30 October 2000) contained an article entitled "Unholy Gains" in which several references were made to the respondent, Mr Joseph Gutnick.  Mr Gutnick contends that part of the article defamed him.  He has brought an action in the Supreme Court of Victoria against Dow Jones claiming damages for defamation.  Mr Gutnick lives in Victoria.  He has his business headquarters there.  Although he conducts business outside Australia, including in the United States of America, and has made significant contributions to charities in the United States and Israel, much of his social and business life could be said to be focused in Victoria.

  3. The originating process in the action which Mr Gutnick brought against Dow Jones was served on it outside Australia. The writ recorded that service was effected in reliance upon two of the provisions of the Supreme Court (General Civil Procedure) Rules 1996 (Vic) ("the Victorian Rules") (rr 7.01(1)(i) and 7.01(1)(j)) providing for service of process outside Australia. Under those Rules, the scheme of which is broadly similar to that considered in Agar v Hyde[1], a plaintiff may serve originating process without first obtaining the leave of the Court.  If the defendant does not submit to the jurisdiction by filing an unconditional appearance, the plaintiff must obtain leave to proceed[2], demonstrating that the originating…

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Details
Case
[2002] HCA 56
Decision Date

CaseChat Overview and Summary

Dow Jones & Company Inc. appealed to the High Court of Australia concerning a defamation action brought by Mr. Gutnick. The dispute arose from an article published by Dow Jones in its magazine Barron's and also made available on its website. Mr. Gutnick alleged that the article, which contained statements he considered defamatory, was published in Victoria, where he resides and carries on business. The core of the appeal concerned whether the publication of the article on the internet constituted publication in Victoria for the purposes of defamation law.

The High Court was required to determine whether the material complained of, housed on a computer server in the United States and accessible via the internet, was legally considered published in Victoria when downloaded by a subscriber in that state. This involved questions of where a tort of defamation occurs in the context of internet publication, the application of the single publication rule, and the principles of private international law regarding the choice of law and service of process when the alleged tort occurs across jurisdictions.

The Court reasoned that publication of defamatory material occurs where the material is downloaded and made comprehensible to a third party. In the context of the internet, this means that publication occurs in every jurisdiction where the material is accessed and read. The Court applied the principle of *lex loci delicti*, holding that the law of the place where the tort is committed governs the substantive rights. As Mr. Gutnick's reputation was primarily in Victoria, and the defamatory material was downloaded and made comprehensible there, Victorian law applied. The Court also found that service of the writ out of the jurisdiction was validly effected, as the action was brought in respect of a tort committed and damage suffered in Victoria, and Victoria was considered a convenient forum.

The appeal was dismissed, with Dow Jones & Company Inc. ordered to pay Mr. Gutnick's costs.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

The question which this case raises is whether the development of the Internet calls for a radical shift in the law of defamation.Facts The appellant publishes for profit the Wall Street Journal, a daily financial newspaper, and Barron's, a weekly magazine, which is also concerned with financial matters. The edition of Barron's dated Monday, 30 October 2000, but which was available publicly two days earlier, contained an article by a journalist working for the appellant, Bill Alpert, headed "Unholy Gains" and sub-headed "When stock promoters cross paths with religious charities, investors had best be on guard." A large photograph of the respondent appeared on the first page of the magazine. The article, of about 7,000 words, also contained photographs of other persons including Mr Nachum Goldberg. Barron's has a large circulation in the United States. Altogether, it was likely that 305,563 copies of the magazine were sold. A small number of them entered Australia, some of which were sold in Victoria. Barron's also put the article on the Internet. The relevant article appeared on the appellant's website on 29 October 2000. Subscribers who paid an annual fee were able to obtain access to that site at its address wsj.com. The site had about 550,000 subscribers. The appellant has an office that it calls a "corporate campus" in New Jersey where it has a web server on which its website is stored. It was conceded by the appellant that it could not identify the addresses of all of its subscribers but that 1,700 or so of them paid subscription fees by credit cards whose holders had Australian addresses. The respondent is a businessman. He is involved in philanthropic, political, sporting and religious affairs. His business activities have extended beyond Australia. He lives in Victoria and has many friends and associates there. He is the chairman of a corporation, shares in which are traded in the United States. He has sought investment in that corporation from investors in the United States. It is unnecessary to set out the whole of the article. The first three paragraphs sketch some of the interests of the respondent. The fourth states that some of his business dealings with religious charities raise "uncomfortable questions"[203]. The author then uses some language that the media have appropriated from the law courts, implying that a balanced trial with equal opportunity to participate by all concerned has taken place: that a "Barron's investigation found that several charities traded heavily in stocks promoted by Gutnick."[204] (emphasis added) The article associates the respondent with Mr Nachum Goldberg who is apparently a convicted tax evader and another person awaiting trial for stock manipulation in New York.[203]Alpert, "Unholy Gains", Barron's, 30 October 2000 at 24.[204]Alpert, "Unholy Gains", Barron's, 30 October 2000 at 24. A detailed discussion of various of the respondent's religious and political activities and business dealings follows. One paragraph of the article claims that an intercepted communication from the convicted tax evader was taken by Australian prosecutors to mean that the respondent was the former's "biggest money‑laundering customer"[205].[205]Alpert, "Unholy Gains", Barron's, 30 October 2000 at 30.The proceedings in the Supreme Court of Victoria

Evidence

Evidence Before The Court

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Decision

Reasons for decision

HUGH, GUMMOW AND HAYNE JJ GAUDRON J KIRBY J CALLINAN J (dissent)

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Ratio Decidendi

Legal Principle Established

Established by: HUGH, GUMMOW AND HAYNE JJ, GAUDRON J, KIRBY J,

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