'Borderless cyberspace' ? - Internet jurisdiction issues

1. 'Borderless cyberspace' ? - Internet jurisdiction issues Russell Allen Incorporating slides by Professor Graham Greenleaf and Dan Svantesson These slides may be used for private, non-commercial study only.

2. Introduction What’s the problem?

3. ‘Borderless’ problems • You are defamed on a website overseas • Your books bought from an online bookstore overseas never arrive • Will an Australian court hear your case? • Which country’s law applies? • Can you enforce Australian laws overseas? • Why don’t countries have the same laws?

4. Borderless cyberspace? • Two methods by which law overcomes the ‘borderless problem’: • (i) Private international law • Methods of resolving conflicts in cyberspace between individuals from different countries • (ii) Public international law • Agreements between States to have common local rules concerning cyberspace • Methods of resolving disputes between States

5. Conflict of Laws AKA Private International Law

6. What is “Conflict of laws”? • Procedural rules as contrasted to substantive rules! • Private International law (or jurisdictional issues) • Not only international – also domestic in federations like Australia

7. What is “Conflict of Laws”? • Jurisdiction – Which court will decide the dispute? • Choice of law – which substantive law should the court apply? • Recognition and Enforcement – Where can the judgment have effect?

8. A Four Step Model (NSW) • Jurisdiction – Supreme Court Rules • Choice of law – (contract) proper law, (tort) lex loci delicti • Forum non conveniens – YES/NO • Recognition & enforcement – YES/NO

9. Jurisdiction Jurisdiction – Choice of Law – Forum non Conveniens - Enforcement

10. Jurisdiction in Australia • When will Australian courts assert cyberspace jurisdiction? • 2 connections must be present - • (i) ‘Personal jurisdiction’ • (ii) ‘Subject matter jurisdiction’

11. Personal jurisdiction • Depends on service of a writ on the Defendant (D) - 2 possibilities: • (I) Satisfied if D can be served in Australia, or consents to jurisdiction • (ii) Australian court can allow service ex juris outside Australia

12. Service Ex Juris in Tort • The tort was committed within the forumSupreme Court Rules 1970 (NSW) Pt 10 r 1A(1)(d) • The tort had damaging effects within the forum Supreme Court Rules 1970 (NSW) Pt 10 r 1A(1)(e)

13. Service Ex Juris in Contract • The contract was made within the forum • The contract was breached within the forum • The contract is governed by the law of the forum

14. Service Ex Juris for Injunctions • May be permitted when the plaintiff seeks injunction to compel or restrain act of defendant within the forum which infringes P’s rights in forum

15. Choice of Law Jurisdiction – Choice of Law – Forum non Conveniens - Enforcement

16. Choice of Law: • This issue will only ever arise if the forum finds that it may claim jurisdiction. • Sometimes the question of jurisdiction is not in dispute, but the choice of law is.

17. Choice of Law: • Lex fori – the law of the forum • Lex loci delicti – the law of the place where the wrong was committed • Lex loci celebrationis – the law of the place where a judicial act occurs

18. Choice of Law: • The reasonable expectation of the parties. • Uniformity in result

19. Defamation (Tort) • Main Rule: Lex loci delicti • John Pfeiffer Pty Limited v Rogerson [2000] HCA 36 (21 June 2000) • Regie National des Usines Renault SA v Zhang [2002] HCA 10 (14 March 2002)

20. Defamation (Tort) • The place of wrong is the place where the publication takes place • Publication takes place where the defamatory material is made manifest to the receiving third party, in a formatwhich can be comprehended by the receiver

21. Contracts • The proper law of the contract • Express choice of the proper law • Inferred choice of the proper law • Objective approach to the proper law

22. Exceptions • Trade Practices Act 1974 (Cth) s 67 • Contracts Review Act 1980 (NSW) s 7(1) • Golden Acres Ltd v Queensland Estates Pty Ltd [1969] Qd R 378 • Can’t use express choice to be oppressive or to evade law

23. Party Autonomy • Parties to contract are free to make binding agreement between themselves as to forum and choice of law • Restrictions on this in EU law • Restrictions on this in s67 Trade Practices Act 1974 (Cth)

24. Forum Non Conveniens Jurisdiction – Choice of Law – Forum non Conveniens - Enforcement

25. Forum Non Conveniens • Courts have a discretionary power to decline jurisdiction when the convenience of the parties and justice would be better achieved by resolving the dispute in another forum. • Court considers factors such as the ease of access to sources of proof, and the availability of witnesses. • Court may decline to exercise jurisdiction if it finds that it is a clearly inappropriate forum to determine the application: Voth v Manildra Flour Mills (1990) 171 CLR 538

26. Forum Non Conveniens • A court shall decline jurisdiction under certain circumstances • In Australia – clearly inappropriate forum

27. Forum Non Conveniens • Supreme Court Rules 1970 (NSW) - SECT 10.6A(2)(b) • “…that this Court is an inappropriate forum for the trial of the proceedings”

28. Factors taken into account • Connection between forum and subject-matter • Connection between forum and the parties • Judicial advantages to the plaintiff • The availability of an alternative forum • The applicable law

29. Forum Non Conveniens: • In majority of common law states – “more appropriate forum” • Which rule is better? • “Clearly inappropriate forum” OR “More appropriate forum”?

30. Enforcement Jurisdiction – Choice of Law – Forum non Conveniens – Enforcement

31. Recognition and Enforcement: • If there is no risk that the judgment can be enforced against you, why bother defending? • If there is no chance of having the judgment enforced against the other party, why bother going to court?

32. Recognition and Enforcement: • Assets in third country, that would recognize and enforce the judgment (Brussels Convention in the EU) • Future business in the state that made the judgment or in third country, that would recognize and enforce the judgment • This area is being harmonized through international co-operation.

33. Enforcement in Australia • In Australia there are two ways to enforce a foreign judgment: • Recognition at common law • Recognition by Statute

34. Recognition by Statute • Only certain countries • On a reciprocity level • Foreign Judgments Act 1991 (Cth)

35. Recognition at common law • Any country • A four criteria test: • Foreign court must have had international jurisdiction • Foreign judgment must be final and conclusive • Same parties and same action • A fixed debt

36. Defences to Common Law • Foreign judgment obtained by fraud • Foreign judgment contrary to public policy • Foreign court acted contrary to natural justice • Foreign judgment is penal • Foreign court acted ‘perversely’ in refusing to apply the appropriate law • Foreign judgment estopped by prior judgment within Australia • Foreign Procedings (Excess of Jurisdiction) Act 1984 (Cth)

37. Recap: The Model (NSW) • Jurisdiction – Supreme Court Rules • Choice of law – (contract) proper law, (tort) lex loci delicti • Forum non conveniens – YES/NO • Recognition & enforcement – YES/NO

38. Australian Cases

39. Macquarie Bank v Berg • Macquarie Bank Ltd v. Berg [1999] NSWSC 52 • Injunction sought to stop publication by Defendant in US on US website of defamatory material • Court declared it had power, but exercise was a matter of discretion

40. ASIC v Matthews • ASIC v. Matthews [1999] FCA 164 • ASIC v. Matthews [2000] NSWSC 392 • Publishing of securities material on website, order given to take down and not republish. • Material moved to NZ web server • Found to be contempt of court, 3 months imprisonment

41. Gutnick v Dow Jones • [2001] VSC 305 (Supreme Court of Victoria) - Dow Jones (DJ) published Barrons Magazine on the web with an article ('Unholy Gains') about G. DJ’s servers are in New Jersey USA (NJ). • G said the defamation occurred in Victoria (Vic); DJ said it occurred in NJ (where defamation of public figures is only where malice is proven) • Court held that defamation occurs where a person comprehends the defamatory content - in Vic - so only Vic law must be satisfied

42. More Gutnick • Dow Jones v. Gutnick [2002] HCA 56 (High Court) • Upheld Hedigan J’s initial decision • Publication takes place where a person comprehends the defamatory content

43. A Side Issue: Lawyers v Geeks • Read comments by Hedigan J in the initial instance, [2001] VSC 305, at [70, 71] • Compare with comments by Dr Clarke in “Defamation on the Web: Gutnick v. Dow Jones” at http://www.anu.edu.au/people/Roger.Clarke/II/Gutnick.html

44. A side issue: How new is the Internet? • Kirby J: “…more than simply another medium…revolutionary leap” • Callinan J: “…no more than a means of communication by a set of interconnected computers” • Note: Despite this, both judges reached same conclusion

45. Gutnick on Jurisdiction • Victorian Supreme Court Rules Rule 7.01(1): • Originating process may be served out of Australia without order of the Court where: • (i) the proceeding is founded on a tort committed in Victoria; • (j) the proceeding is brought in respect of damage suffered wholly or partly in Victoria and caused by a tortious act or omission wherever occurring

46. Gutnick on Choice of Law • Lex Loci Delicti (fairly recent rule) • So, Dow Jones needed a change in the law to win • Callinan J: “a radical shift in the law of defamation”

47. Dow Jones on Choice of Law • Place of uploading • Effect: Extending US Law • Problem: What about, eg, FreeNet? • Problem: What about ASIC v. Matthews? • Problem: Jurisdiction different to Choice of Law

48. Gutnick on Forum non Conveniens • “clearly inappropriate” test reaffirmed • Gutnick gave an undertaking to sue in Victoria, for damages suffered in Victoria under Victorian law. • Gaudron J: “Whole controversy” test

49. Two Other Issues • Gutnick gave an undertaking to sue in Victoria, for damages suffered in Victoria under Victorian law. Did this influence the Court? • WSJ.com was a subscription site, with a number of subscribers who had paid by methods which identified their jurisdiction, eg Credit Cards. Would a totally free site have fared differently?

50. Gutnick Reactions • From Gutnick, it seems that wherever a person reads a web page, their local law applies to it - 300+ laws may apply! • Some claim this may destroy the Internet • Alternative view: Why should US law and the US First Amendment apply world-wide? • Enforcement of judgments must also be considered