Victorian can sue Dow Jones

By MICHAEL FOREMAN

As New Zealand awaits a decision on its first internet defamation case, a landmark ruling by the Victorian Supreme Court appears to give the Australian state global jurisdiction.

On Tuesday the court ruled that businessman Joseph Gutnick could sue American financial publisher Dow Jones in Victoria after an article in the online edition of Barron's magazine allegedly defamed him.

The article, "Unholy Gains", was available online to subscribers only, but five people accessed the information in Victoria.

Dow Jones, which owns Barron's, argued that the court should refuse to hear the case because the article was published in New Jersey, where its web server was located.

But Justice John Hedigan ruled that the article was published in Victoria and therefore Victoria had jurisdiction .

"This has been the law for centuries in respect of other forms of communication and I find no persuasive reason that it should not apply to internet publication", he said.

Lawyers for Dow Jones, who will appeal , said it put Australia at risk of being cut off from online content.

Chris Patterson, a barrister at Auckland law firm Eldon Chambers, said the case could have implications inside and outside Australia.

He said the decision overturned a judgment by the New South Wales Supreme Court in the case of Macquarie Bank Ltd v Berge, in which a former employee of Macquarie Bank set up United States-based websites containing material that defamed the bank.

In this case the court declined an application by Macquarie Bank for an injunction to restrain the defendant since it would effectively impose the law of New South Wales on every other state, territory and country .

The court was concerned that "it may very well be that, according to the law of the Bahamas, Tazhakistan or Mongolia, the defendant has an unfettered right to publish the material."

Mr Patterson said the decision in the Gutnick case had created a legal precedent in Victoria.

"It means if you are an Australian and are being defamed online, then you're probably going to file your suit in Victoria rather than New South Wales."

Whether the decision would be accepted as a precedent by other jurisdictions would be decided by the courts concerned.

Mr Patterson believed it raised some interesting legal questions. Potentially website owners could be sued in any of 190 nations. "Does it mean he [Mr Gutnick] could sue in Victoria, then jump on a plane and sue in Sydney, then come over to Auckland and do the same thing here? How many times could he sue?"

Mr Patterson said the issue of extraterritoriality had not been tested in New Zealand courts, and it did not arise in the case of Patrick O'Brien v Alan Brown, on which a judgment is awaited.

While the allegedly defamatory remarks made on an internet newsgroup in that case could be read overseas, the news server was located in New Zealand, and all the parties were in New Zealand.