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Rose, Rebecca --- "Internet Defamation: Comparative Approaches to Jurisdiction & Some Best Practice Guidelines for Navigating the World Wide Web" [2009] NZLawStuJl 5; (2009) 2 NZLSJ 55

Last Updated: 14 January 2013

INTERNET DEFAMATION:

COMPARATIVE APPROACHES TO JURISDICTION & SOME BEST

PRACTICE GUIDELINES FOR NAVIGATING THE WORLD WIDE WEB

REBECCA ROSE*

Introduction

New winds are blowing on old doctrines, the critical spirit infiltrates traditional formulas.¹

Since becoming available for commercial and public use in the 1990s, the internet² has become an indispensible technology for numerous businesses.³ Today, many firms exploit the internet’s information collection, maintenance and dissemination properties to gain strategic advantage over their competitors. Indeed, firms’ advertising of their products on websites and judicious targeting of particular customer groups (e.g. via email or pop-ups) have become commonplace means of increasing revenue.⁴ Rapid growth in firms’ reliance on online retailing as an everyday sales channel is also observable⁵ and is largely

* BMS/LLB (Hons), University of Waikato. Judge’s Clerk, Supreme Court of New

Zealand, Wellington.

^{1 F Frankfurter, “The Early Writings of O.W. Holmes” (1931) 44 Harv. L.Rev. 717, 717.}

² Consistent with general business usage and academic writings regarding internet defamation, throughout this article, the term “internet” is used to denote all forms of interactive, electronic communication. That the internet is just one of several electronic networks available to users, albeit the most popular, is acknowledged: W Byassee, “Jurisdiction of Cyberspace: applying real world precedent to the virtual community” (1995) 30 Wake Forest L.Rev. 197.

³ In this article, the terms “business” and “firm” are used interchangeably to refer to any organisation which sells goods/services to consumers, i.e. any differentiation based on an entity’s legal structure is unnecessary. It is acknowledged that in numerous instances no significant distinction will be able to be drawn between commercial and non-commercial entities (e.g. individuals; Government agencies) when assessing the scope of an actor’s potential liability in defamation for material published via the internet. Accordingly, whilst many of the conclusions reached in this article will conceivably apply to a considerably broader range of entities, for clarity purposes this article focuses on the internet defamation liability of “firms” in the sense described above.

^{4 Nielson Online, NetRatings Report on E-Commerce (2007), available at:}

<http://www.nielsen-online.com/resources.jsp?s ection=pr_netv & nav=1> last viewed

^{22 December 2008.}

⁵ S Lee, S Park and S Yoon, “RFID based ubiquitous commerce and consumer trust”

56 The New Zealand Law Students’ Journal (2009) 2 NZLSJ

attributable to continuous developments in the sophistication of e- commerce technologies.⁶

Currently, no supranational institution or single tribunal exists to regulate the internet. Consequently, because the internet “does not respect geographic boundaries” and makes instantaneous global communication possible at almost negligible marginal cost,⁷ internet defamation suffered and effected both intentionally and accidentally by firms has become a contentious global issue.

Dow Jones v Gutnick⁸ marks the first final-level appeal decision internationally which deals with the issue of whether traditional defamation law analysis is applicable to allegations of online defamation. Particularly in terms of its conclusions regarding jurisdiction (i.e. a Court’s authority to adjudicate on a dispute⁹) and the point at which publication of material made available online occurs, the Australian High Court’s Gutnick decision revolutionised media law and internet business practices.¹⁰

Gutnick continues to generate much debate in courts and among commentators internationally.¹¹ However, prior to University of Newlands v Nationwide News Pty Ltd,¹² the New Zealand business

(2007) 107 IMDS 605, 605 – 606.

^{6 F Soliman and M Yossef, “Internet-based e-commerce and its impact on manufacturing}

and business operations” (2003) 103 IMDS 546.

^{7 Barrick Gold Corp v Lopehandia (2005) 71 OR (3d) 416, para [1] (Ont CA). In this context,}

“marginal cost” is used to denote the additional cost incurred by a publisher in communicating material to a single extra reader online: R Pindyck and D Rubinfeld, Microeconomics (5th ed, 2001), 80.

^{8 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575. Hereafter “Gutnick”.}

⁹ B Garner (ed), Black’s Law Dictionary (8th ed, 2004), 867; Gutnick, ibid, para [10].

^{10 The Gutnick decision also has important implications for a myriad of other equitable}

wrongs/possible torts (e.g. negligence; passing off; breach of confidence) which may result following a firm’s publication of material on the internet. Such topics are, however, outside the scope of this article.

^{11 See, for example, U Kohl, “Defamation on the Internet – Nice Decision, Shame About}

the Reasoning: Dow Jones & Co Inc v Gutnick” (2003) 52 ICLQ 1049; B Werley, “Aussie

^{Rules: Universal Jurisdiction over Internet Defamation” [2004] Temple Int’l & Comp L.J}

199.

^{12 University of Newlands v Nationwide News Pty Ltd [2006] NZSC 16; (2006) 18 PRNZ 70 (SC); Nationwide}

News Pty Ltd v University of Newlands (CA202/04, Glazebrook, Hammond and Panckhurst

^{JJ, 9 December 2005); University of Newlands v Nationwide News Pty Ltd (2004) 17 PRNZ}

206 (HC).

Internet Defamation 57

community had generally assumed that Gutnick would be expressly adopted (or at least endorsed) in New Zealand at the earliest opportunity. Subsequently, through reserving New Zealand’s position on the issue, Newlands has maintained continued uncertainty for businesses vis-à-vis their potential online defamation liability. Accordingly, the purpose of this article is to help inform New Zealand firms’ decision-making by analysing both the implications flowing from Newlands and the likely future direction of international internet defamation law. Therefore, Parts A and B of this article briefly outline the elements of the tort of defamation and the unique nature of the internet. Part C discusses various international approaches to the issues of publication and jurisdiction. Part D explains the Newlands litigation. Part E identifies some best practice recommendations for firms wishing to minimise their potential online defamation liability and/or vindicate their reputation following another person’s publication of defamatory comments about them or their activities. Part F offers some concluding remarks and comment regarding the future direction of internet defamation law.

A. The Elements of Defamation: an Overview

The tort of defamation is meant to remedy harms that cannot be quantified in terms of personal physical damage but that are more ethereal and social.¹³

Defamation laws differ across jurisdictions and can be complicated.¹⁴

The essence of the tort, however, is relatively simple. Specifically, absent the defendant proving a defence to the action,¹⁵ a “person”

¹³ W Prosser et al., Prosser and Keeton on Torts (5th ed) (West Group Publishing, 1984), 771. Indeed, defamation law is predominantly focused on a person’s standing in society; any personal affront caused is rarely dealt with, except notionally in the context of damages.

^{14 Detailed discussion of what constitutes defamation and the availability of defences is}

outside the scope of this article. Useful writings on the subject, however, include: L McNamara, Reputation and Defamation (Oxford University Press, 2007); P Milmo and W Rogers (eds), Gatley on Libel and Slander(11th ed) (Sweet & Maxwell, 2008) (“Gatley”); D Rolph, Reputation, Celebrity and Defamation Law (Ashgate, 2008); M Collins, The Law of Defamation and the Internet (2nd ed) (Oxford, 2005).

^{15 For example, “truth”, “honest opinion”, “innocent dissemination”, “absolute}

privilege”, or “qualified privilege”. See Defamation Act 1992, ss 8 – 23. For comparative discussion of defamation defences and their application, see generally, A Kenyon, Defamation: Comparative Law and Practice (UCL Press, 2006).

(including both companies and individuals)¹⁶ has an action in defamation where there is a “published” “statement” about them that is “defamatory”.

In New Zealand, defamation is governed by the Defamation Act 1992 and the common law. Pursuant to s 6 of the Defamation Act 1992, a body corporate plaintiff cannot succeed in defamation unless it also proves actual or likely pecuniary loss as a result of the published statement at issue.¹⁷

Consensus on a satisfactory definition of “defamatory” is yet to be reached.¹⁸ However, Sim v Stretch establishes that the “principal test”¹⁹ is whether the relevant statement tends to “lower the plaintiff in the estimation of right-thinking members of society generally”.²⁰ As Burrows explains, context is critical in any assessment; what is and is not defamatory can change with time and place.²¹ Courts have adopted a very broad approach to communications constituting a “statement”.

¹⁶ Companies Act 1993, s 15; R v Murray Wright Ltd [1970] NZLR 476, 484 (CA) and Salomon v Salomon [1897] AC 22 establish that a company is a legal person and may accordingly sue and be sued in its own name.For authority establishing this proposition in the defamation context, see South Hetton Coal Co v North-Eastern Assn [1893] UKLawRpKQB 194; [1894] 1 QB 133 (CA); Atlantic Union Oil Co Ltd v Bodle [1933] GLR 441.

^{17 This is because bodies corporate (including trading and non-trading companies,}

incorporated societies and educational institutions) do not have feelings able to be injured: Lewis v Daily Telegraph Ltd [1964] AC 234, 262; Mt Cook Group Ltd v Johnson Motors Ltd [1990] NZHC 137; [1990] 2 NZLR 488, 497 (HC).

^{18 Other than to provide that it includes both libel (written) and slander (spoken)}

statements: Defamation Act 1992, s 2, no statute defines “defamation”. Reference to case law is accordingly necessary. Note, however, comment of Neill LJ in Berkoff v Burchill [1996] EWCA Civ 564; [1996] 4 All ER 1008, 1011 (CA): “I am not aware of any entirely satisfactory definition of the word ‘defamatory’”.

¹⁹ Sim v Stretch [1936] 2 All ER 1237, 1240 (HL) per Lord Atkin. As alternatives to the “principal test”, a communication will also be found “defamatory” if it: (1) “tends to make the plaintiff be shunned and avoided”: Youssoupoff v Metro-Goldwyn Mayer (1934) 50

^{TLR 581 (CA), 584 and 587 per Scrutton and Slesser LJJ respectively; or (2) exposes or}

subjects a person to hatred, contempt or ridicule: Parmiter v Coupland [1840] EngR 168; (1840) 151 ER 340,

^{342 per Parke B.}

²⁰ For international acceptance of this test and its alternatives, see: J Burrows and U Cheer, Media Law in New Zealand (5th ed) (OUP, 2005), 11-12; D Butler and S Rodrick, Australian Media Law (2nd ed) (LBC, 2004), 34 – 35; and Gatley, above n 14, para [1.5].

^{21 J Burrows, “Defamation” in S Todd (ed) The Law of Torts in New Zealand (3rd ed)}

(Brookers, 2001), 809 – 819.

All words, gestures, pictures, visual images, and other methods of conveying meaning consequently have potential to be defamatory.²²

Proof that a defamatory statement was “published” to some person other than the plaintiff is sufficient to secure success in an action for defamation.²³ Publication occurs by every person who “intentionally or negligently plays any role in the publication process”, i.e. directly or indirectly authorises or communicates a statement.²⁴ Importantly, unlike the United States, New Zealand has no “single publication rule”²⁵ whereby a series of defamatory publications (eg material appearing in a broad-circulation newspaper) is taken to constitutea single tort. Rather, each publication is a separate tort giving rise to separate liability against a defendant.²⁶ It is well-settled that publication of defamatory statements can occur via the internet.²⁷ In this context, examples of actionable publication formats include webpages, email, bulletin boards or Usenet groups,²⁸ hyperlinking²⁹ and internet relay

²² Sim, above n 19; Youssoupoff, above n 19.

^{23 Pullman v Walter Hill & Co Ltd [1890] UKLawRpKQB 193; [1891] 1 QB 524, 527, 529 – 530.}

²⁴ M Gillooly, The Law of Defamation in Australia and New Zealand (Federation Press, 1998),

^{75; Gatley, above n 14, para [6.3]. For additional description of this general rule, see Webb}

v Bloch [1928] HCA 50; (1928) 41 CLR 331, 363 – 366.

^{25 Webb, ibid; Loutchansky v Times Newspaper Ltd (Nos 2 – 5) [2001] EWCA Civ 1805; [2002] QB 783, para [57]. In}

the United States, the Restatement (Second) of Torts, § 577A(4) (1977) deals with the single publication rule, providing:

As to any single publication:

^{(a) only one action for damages can be maintained;}

(b) all damages suffered in all jurisdictions can be recovered in the one action; and a judgment for or against the plaintiff upon the merits of any action for damages bars any other action for damages between the same parties in all jurisdictions.

For discussion of the single publication rule, see generally D Cohen, “The Single Publication Rule: One Action, Not One Law” (1996) 62 Brooklyn L.Rev. 921 and M Collins, above n 14, para [13.22].

^{26 Duke of Brunswick v Harmer [1849] EngR 915; (1849) 14 QB 185. Duke of Brunswick involved a newspaper}

publication. However, prior to Gutnick’s holding that the “multiple publication” rule applied to the internet, the rule had been extended to new media forms, e.g. books, television, movies and radio, as these emerged: Berezovsky v Michaels [2000] UKHL 25; [2000] 1 WLR 1004 (HL); Harris v Perkins [2001] NSWSC 258.

²⁷ O’Brien v Brown [2001] DCR 1065 marks the first New Zealand case considering application of traditional defamation laws to the internet. In this article, the terms “online” and “internet” defamation are used interchangeably.

^{28 Godfrey v Demon Internet Ltd [2001] QB 201.}

²⁹ Hird v Wood (1894) 38 SJ 234 (CA) – establishing that the act of drawing attention to another person’s defamatory statement can render the attention-drawer liable in defamation.

chat.³⁰ Contrary to the jury-determined³¹ issue of whether a communication bears defamatory meaning, publication is a question of law for the Judge.³²

B. The Unique Nature of the Internet

The Internet represents a communications revolution. It makes instantaneous global communication available cheaply to anyone with a computer and an Internet connection. It enables individuals, institutions and companies to communicate with a potentially vast global audience. It is a medium which does not respect geographic boundaries. Concomitant with the utopian possibility of creating virtual communities, enabling aspects of identity to be explored and heralding a new and global age of free speech and democracy, the Internet is also potentially a medium of virtually limitless international defamation.³³

This Section does not review all the technological aspects of computers and the architecture of the internet, as others have done elsewhere at length.³⁴ Rather, continuing Section A’s discussion intended to provide context for analysis contained in later Sections, this Section’s purpose is restricted to briefly describing key aspects of the internet’s operation necessary for understanding how defamatory material may be published by or about firms. Important similarities and differences that the technology shares with more traditional means of communication are highlighted. Comment is also offered on why and how utilisation of the internet has become critical for contemporary New Zealand firms.

³⁰ D Harvey, internet.law.nz: selected issues (2nd ed) (LexisNexis, 2005), 463 – 465.

³¹ Section 19A(5) of the Judicature Act 1908 allows for election of a jury trial by either party where damages exceeding $3000 are the only remedy claimed. A jury trial will be denied where the opposing party satisfies a Court that the case predominantly involves either difficult technical matters (e.g. examination of accounts) or difficult points of law: News Media (Auckland) Ltd v Young [1989] NZCA 86; [1989] 2 NZLR 173 (CA).

^{32 TVNZ Ltd v Prebble [1993] 3 NZLR 513 (CA). Likewise, the prior question of whether}

the particular communication is capable of bearing a defamatory meaning is a question of law for the Judge.

³³ Barrick, above n 7, para [1].

^{34 See generally, for example, C McTaggart, “A Layered Approach to Internet Legal}

Analysis” (2003) 48 McGill L.J. 571. For international judicial discussion, see Godfrey, above, n 28, 204 – 205; Zippo Manufacturing Co v Zippo Dot Com Inc 952 F.Supp 1119, 1123

– 1124 (WD Pa, 1997); and Braintech Inc v Kostiuk (1999) 171 DLR (4th) 46 (BCCA).

Developed as the result of an experimental US military project in

1969,³⁵ the internet is essentially a decentralised, self-maintained “network of networks”,³⁶ which facilitates instantaneous, long-distance communication.³⁷ The infrastructure operates through a series of non- proprietary standards (known as data transfer protocols) for the identification of sites and transmission of data.³⁸ Once connected to the online network, the internet allows computers (or any other device offering digital communication, e.g. modern cellphones) to communicate and share information internationally with any other computer or digital communication device. In this sense, the internet represents an important development for free speech.³⁹ On the world- wide-web, hyperlinks⁴⁰ enable users to move between webpages and documents.

Email and the world-wide-web are the internet’s most popular applications.⁴¹ Email is a “store and forward system” that allows messages to be transmitted to particular individuals’ electronic mail boxes.⁴² Because, like ordinary letter mail, emails must be sent to a predetermined address, intentional publication of email communications to the world at large rarely occurs.⁴³ Nevertheless,

³⁵ Then known as “ARPANET”: American Civil Liberties Union vReno 929 F. Supp 824, paras [5], [33] – [37].

^{36 Reno, ibid, 830.}

³⁷ M Collins, above n 14,3; Reno, ibid, paras [1] – [123].

^{38 G Takach, “Internet Law: Dynamics, Themes and Skill Sets” (1999) 32 CBLJ 1, 6.}

³⁹ E Barendt, “Jurisdiction in Internet Libel Cases” (2006) 110 Penn. State L. Rev. 727,

^736.

⁴⁰ Including “shallow links” whereby users are transported to the homepage of another website; “deep links” through which users are transported to a page other than the homepage of another website; and “framing” which, upon following a hyperlink, results in content of another website being displayed within a frame on the original website. Hyperlinks frequently blur the boundaries between where one publication ends and another begins. Additionally, hyperlinks cross-referencing other published material have potential to turn an otherwise innocuous website/email into a defamatory publication: M Collins, above n 14, paras [2.41] – [2.45], [3.11] – [3.12] and [5.25] – [5.28]. For recent Canadian authority to this effect, see Crookes v Wikimedia Foundation Inc [2008] BCSC

^{1424, paras [4] – [7] and [19] – [34].}

⁴¹ O Bigos, “Jurisdiction over Cross-Border Wrongs on the Internet” (2005) 54 ICLQ

^{585, 588. For this reason, this article focuses on defamation suffered/effected in these}

formats.

^{42 G Takach, above n 38, 6 – 7.}

⁴³ Reno, above n 35, 834; D Harvey, above n 30, para [6.5.1]; and A Spencer, “Jurisdiction and the Internet: Returning to Traditional Principles to Analyze Network-Mediated Contacts” [2006] U.Illinois L.Rev. 71, 96.

recipient individuals may increase an email’s audience by forwarding the communication to others.⁴⁴

By contrast, subject only to ISP-imposed content restrictions,⁴⁵ webpages/websites⁴⁶ hosted on the world-wide-web potentially allow communication of any uploaded⁴⁷ material to a vast global audience. Critically in terms of comparisons with more traditional media formats, world-wide-web publications do not generally occur at a single point in time or at a single location. Additionally, publishers are able to exert far less control over the locations where copies of their publications are made available.⁴⁸ Consequently, whilst historically the lynchpin of private international law, States’ territorial boundaries are frequently rendered an arbitrary concept.⁴⁹ Certainly, firms and publishers may fully or partially restrict their website’s accessibility (i.e. internet users’ ability to download⁵⁰ uploaded content) by, for example, requiring subscriptions or limiting access to particular company-associated personnel. However, beyond these relatively rudimentary techniques, affordable technologies allowing effective exclusion of potential viewers on grounds such as geographic location remain unavailable.⁵¹

⁴⁴ Similarly, as the Court explained in Reno, above n 35, 834, unless encrypted, there is potential for an email’s viewing audience to extend beyond original addressees where the email is accessed on an intermediate computer between its recipient and sender.

^{45 ISPs (Internet Service Providers) effectively “establish the connection between people}

and content on the internet”. ISPs “provide access to the World Wide Web, and allow users to store and publish content”. Additionally, ISPs also provide hosting and searching services: J Bayer, Liability of ISPs for Third Party Content (InternetNZ, 2007), 1 –

^{3; Gutnick, above n 8, para [84]. Examples of content frequently blocked by ISPs}

includes child pornography and other sexually inappropriate material.

^{46 “Websites are comprised of a collection of webpages. Websites are usually maintained}

on a “webserver”. Webservers are generally controlled by the relevant website publisher or a party contracted to do so by the publisher”: Gutnick, above n 8, para [15].

⁴⁷ “Uploading” involves placing the relevant document/webpages in a storage area managed by a webserver: Gutnick, above n 8, para [16].

⁴⁸ D Bainbridge, “Defamation and the Internet – Some Issues” (2003) 8 IP & IT Law 3,

^3.

⁴⁹ M Whincop and M Keyes, Policy and Pragmatism in the Conflict of Laws (Ashgate, 2001),

^192.

⁵⁰ “Downloading” denotes a process by which the relevant webserver delivers a document to a requesting internet user who has nominated a “uniform resource locator” (“URL”) to identify the requested document’s location. Each webpage has its own URL. Webpage URLs will usually begin with the prefix “http://www”: Gutnick, above n 8, para [16]; M Collins, above n14, para [2.46].

^{51 Gutnick, above n 8, paras [84] – [87]; Yahoo! Inc v La Ligue Contre le Racisme et}

L’Antisemitisme (“LICRA”): 169 F. Supp 2d 1181 (ND Cal, 2001), reversed 379 F. 3d

Similarly, unlike magazines, newspapers, and television or radio broadcasts where audiences are generally aware of a publication’s origin, caching⁵² and the absence of any country code requirement for URLs create difficulties for internet users attempting to distinguish between foreign and domestically-created speech.⁵³ Consequently, regardless of whether a firm’s website is capable of transacting electronically (i.e. taking orders and handling payments), where a decision is made to have an online presence,⁵⁴ compliance with domestic defamation laws is rarely sufficient to secure limited exposure to legal risk.

By international standards, New Zealand has a comparatively high rate of internet usage. Indeed, 2008 statistics reveal a penetration rate of

80.5% (i.e. 3.36m users), which is second only to Canada at 84.3% and well above the “Top-20 world average” of 25.4%.⁵⁵ Congruent with this strong penetration rate, recent New Zealand business surveys highlight broad and growing adoption of e-business strategies. Indeed, between 2000 and 2008, New Zealand firms’ internet usage grew by approximately 300%.⁵⁶ More specifically, a majority of New Zealand businesses today operate a website and some level of email usage by

1120 (9th Circ, 2004), rehearing granted, No. 01-17424, 2005 US App. LEXIS 2166 (9th

Circ, Feb 10, 2004) (en banc).

^{52 “Caching” is a process whereby, largely for cost and speed reasons, an automatic}

temporary copy of material passing through a domestically-located caching server is made and stored for later retrieval and sending to requesting receivers. Caching servers usually discard stored material once demand for the information weakens: Reno, above n 35 at

^{848-849; M Collins, above n 14, para [2.47]. Note also Electronic Commerce (EC}

Directive) Regulations 2002, reg 18.

^{53 Reno, ibid, 848.}

⁵⁴ For authority affirming that a company may be held vicariously liable for the actions of its employees/others acting on its behalf within their authority, see Dollars & Sense Finance Ltd v Nathan [2008] NZSC 20; [2008] 2 NZLR 557 (SC); Dairy Containers Ltd v NZI Bank Ltd [1995] 2

^{NZLR 30 (CA).}

⁵⁵ Miniwatts Marketing Group, Internet World Stats: “Internet Usage and Population Statistics for Oceania” (June 2008); “Top 20 Countries with the Highest Number of Internet Users” (June 2008), respectively available at:

^{<http://www.internetworldstats.com/stats6.htm> and}

<http://www.internetworldstats.com/top20.htm> last viewed 12 December 2008.

^{56 Miniwatts Marketing Group, ibid. Compare: Deloitte Touche Tohmatsu, Deloitte E-}

Business Survey (2001); University of Waikato Management School, Net Readiness in New Zealand Industries: Empirical Results (August 2001); New Zealand Institute for the Study of Competition and Regulation, The State of E-New Zealand: 12 Months On (November 2001).

firms is virtually ubiquitous.⁵⁷ Hence, in addition to their own potential to defame via the internet, firms must be alive to the possibility that they may unwillingly become embroiled in defamation litigation through publication of comments about them by other internet users, e.g. competitors or members of the public. Indeed, whilst frequently a lengthy, inconvenient and expensive process, in some cases litigation is the only means by which a firm can sufficiently restore its reputation, deter future occurrences of similar comments, and regain the level of supplier and consumer confidence necessary for long-term survival.⁵⁸

C. Publication and Jurisdiction: Selected International Approaches

Broadly speaking, jurisdiction disputes are determined by one of two rules: the place where the harm or damage is suffered or the place where the wrong is committed. Traditional principles instruct that tort liability is determined by the narrower of these two approaches, specifically the law of the location where harm is suffered.⁵⁹

Whilst firms have previously rarely been required to consider discrepancies in the stringency of different States’ defamation laws (i.e. the premium afforded to free speech) in their everyday business decisions, recent judicial interpretations in international internet defamation cases have created an expanding divide between the two approaches. Central to this growing divide and a firm’s ability to avoid liability or recover damages in its chosen Court, is the deemed geographic locale of defamatory publications. This Section therefore provides a comparative overview of similarities and differences in developments and current approaches to issues of publication and jurisdiction by courts in Australia, Canada, England and Wales, the United States and European Union.⁶⁰

⁵⁷ Miniwatts Marketing Group, ibid.

^{58 As was the case in Barrick, above n 7.}

⁵⁹ O Bigos, above n 43, 589 – 590; D Bainbridge, above n 50, 7.

^{60 Detailed discussion of variants in the elements of States’ defamation laws and particular}

interpretations of these is outside the scope of this article.

1. Australia

Although delivered some three years after the first English⁶¹ and Canadian⁶² decisions dealing directly with private law aspects of the internet, Dow Jones & Co Inc v Gutnick⁶³ arguably remains the most important common law decision regarding publication and jurisdiction.⁶⁴

The Gutnick litigation stemmed from an exposé entitled “Unholy Gains” published by Dow Jones⁶⁵ in its Barron’s Online magazine in October 2000. The article alleged tax and money laundering irregularities in the business dealings of Victorian resident, Mr Gutnick. Mr Gutnick had a prominent reputation in Australian religious, philanthropic and sporting circles. His business activities also extended to the United States. Barron’s Online was primarily a subscription news website. The magazine had a large circulation in the United States, but only around 1700 Australian subscribers.⁶⁶ Material available on Barron’s website⁶⁷ was uploaded from Dow Jones’ editorial office in New York and stored on the company’s webservers maintained in New Jersey.⁶⁸

⁶¹ Godfrey, above n 28. Importantly, Godfrey primarily focused on ISP liability – a broad and contentious issue outside the scope of this article. For recent New Zealand discussion on the topic, however, see J Bayer, above n 45 and M Collins, above n 14.

⁶² Braintech, above n 34, leave to appeal to Supreme Court refused: (1999) 182 DLR (4th) vi. Significantly, Braintech deals only with the relatively narrow issue of foreign judgment enforceability vis-à-vis posting of defamatory material on electronic bulletin boards.

^{63 (2002) 210 CLR 575.}

⁶⁴ E Barendt, above n 39, 728.

^{65 Dow Jones is a New York-based media company that specialises in business and}

financial reporting.

^{66 Oral evidence was that the magazine had a total subscription base of approximately}

550,000 customers and that Barron’s Online was not targeted at Australian readers:

^{Transcript of Proceedings (28 May 2002), available at:}

<http://www.austlii.edu.au/au/other/hca/transcripts/2002/M3/2.html> last viewed 10

^{November 2008. Of the 1700 Australian subscribers, 300 were estimated to reside in}

Victoria.

^{67 Barron’s Online and the Wall Street Journal (also published by Dow Jones) are respectively}

available at: <http://online.barrons.com/public/main> and

^{<http://online.wsj.com/public/us> last viewed 20 December 2008.}

⁶⁸ Gutnick, above n 8, paras [1] – [3] and [17] per Gleeson CJ, McHugh, Gummow and Hayne JJ (hereafter “joint reasons”) and [169] – [172] per Callinan J. The case’s facts are discussed in additional detail by Hedigan J at first instance: Gutnick v Dow Jones & Co Inc [2001] VSC 305, paras [1] – [12], upheld on appeal: Dow Jones & Co Inc v Gutnick [2001] VSCA 249 per Buchanan JA and O’Bryan AJA.

The central issue in Gutnick was whether publication of Barron’s Online occurred in the United States when its content was uploaded or in Australia when downloaded by subscribers.⁶⁹ Hence, in practical terms, the Court was required to decide whether businesses publishing online were obliged to comply with the defamation laws in all countries where they have customers or simply those of the location where their publication originates.

In four concurring opinions, the High Court dismissed Dow Jones’ application to set aside or stay the proceeding.⁷⁰ Upholding Hedigan J’s first instance decision, their Honours rejected Dow Jones’ contention⁷¹ that the internet required modification of traditional principles developed for the broadcasting media and press.⁷² Drawing on international authority, their Honours reasoned that, as a matter of principle, the “substance” of where a tort occurs must remain determinative.⁷³ Consequently, in locations where a plaintiff has a reputation, “damage” to that reputation (i.e. the “essence” of the tort) occurs when defamatory material is “available in comprehensible form”.⁷⁴ In cases involving the internet, material is not “comprehensible” until downloaded/“pulled” from a webserver.⁷⁵

Affirming continued application of the multiple publication rule, albeit in need of legislative reform at least in Australia,⁷⁶ the Court concluded

⁶⁹ Gutnick, above n 8, paras [4], [18] – [24] and [44] per joint reasons and [108] – [110] and

^{[139] – [152] per Kirby J.}

⁷⁰ Adjudication on the case’s particular merits was reserved for a later occasion.

^{71 Dow Jones’ arguments are summarised in the Court’s joint reasons: paras [18] – [24].}

⁷² Gutnick, above n 8, paras [38] – [39] per joint reasons and [184] – [186] per Callinan J. Compare comments Kirby J, paras [84] and [125]. Indeed, whilst the Court’s four judgments essentially reflect differing attitudes to the extent the internet challenges application of traditional defamation law principles, it is only Kirby J who departs from the Court’s general view that the internet constitutes more than simply another new communications medium.

⁷³ Ibid, paras [43] per joint reasons and [139]. [143] and [149] per Kirby J. See similar statement of principle articulated in M Whincop and M Keyes, above n 51, 196.

⁷⁴ Gutnick, ibid, paras [26] and [44] per joint reasons, [56] per Gaudron J and [184] per

^{Callinan J.}

⁷⁵ Ibid, para [44] per joint reasons.

^{76 Ibid, paras [29] – [37] per joint reasons, [56] – [58] per Gaudron J, [122] – [132] per}

Kirby J and [197] – [200] per Callinan J: any adoption of a single publication rule would be to “impose upon Australian residents ... an American legal hegemony in relation to Internet publications”.

that material accessible online was “published”⁷⁷ whenever downloaded by a reader.

On the issue of jurisdiction, the Court declined to impose a physical connection requirement between the place of publication and the alleged tortfeasor. Instead, the Court held that, ordinarily, the locale of each download is the place where the tort is committed.⁷⁸ Having found jurisdiction, any lex loci (i.e. choice of substantive laws a Court must apply) and forum non-conveniens (i.e. convenient forum) disputes remain separate and distinct issues.⁷⁹ In choice of law disputes, the place of publication is, however, a relevant and connecting factor.⁸⁰

In reaching its conclusions, the Court acknowledged that a likely and possibly troubling outcome of its reasoning was that online publishers would become subject to extensive and uncertain defamation liability as a result of publishing in numerous States.⁸¹ Nevertheless, ostensibly considering firms’ ability to profit from their internet activities a weighty factor, to varying degrees, all members of the Court suggested that “global” exposure to defamation laws was simply a corollary of firms’ decisions to have an online presence and enjoy the benefits of wider circulation of published content.⁸² Notwithstanding this view,

⁷⁷ The distinction between the act and fact of publication is emphasised in the Court’s joint reasons at para [11].

^{78 Gutnick, above n 8, paras [44] – [45] per joint reasons, [56] per Gaudron J, [93] – [104]}

per Kirby J and [198] per Callinan J.

^{79 Ibid, paras [105] – [110] per Kirby J. Choice of law and forum non conveniens issues are}

each broad and complex topics in their own right. As such, detailed discussion of these issues is outside the scope of this article. For where differences in the stringency of Australian and other Commonwealth countries’ forum non conveniens tests become important in a dispute, see generally: Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR

538, 552 – 566 and compare Spiliada Maritime Corp v Cansulex [1986] UKHL 10; [1987] AC 460. In New

^{Zealand, Spiliada was adopted in Club Mediterranee NZ v Wendell [1989] 1 NZLR 216 (CA).}

⁸⁰ Gutnick, ibid, paras [44] per joint reasons and [105] – [107] per Kirby J. In Australia, Regie National des Usines Renault SA v Zhang [2002] HCA 10; (2002) 187 ALR 1 establishes that where a publication is found to have occurred outside Australia, the law of the location where the publication occurred (i.e. the downloaded-to State) will apply. However, application of the foreign law must be expressly pleaded by the parties and must not offend Australian public policy if it is to govern the dispute.

⁸¹ Gutnick, ibid, paras [49] – [54] per joint reasons and [152] per Kirby J.

^{82 Ibid, paras [39] per joint reasons, [134] per Kirby J and [162] and [182] per Callinan J.}

Significantly, the Court did not consider differences in the resources/profit potential of large corporations and individuals or small business; the gist of para [39] arguably suggests firms’ only option for avoiding liability is to refuse to go online.

rather pragmatically, their Honours also reasoned that any unsatisfactory exposure for firms was significantly lessened by the judgment enforceability difficulties plaintiffs frequently encounter outside their home States.⁸³ Certainly, that conclusion is regrettable from a comity standpoint.⁸⁴ Likewise, it is acknowledged that there is force in complaint consistent with Kirby J’s comment that:⁸⁵

... providing jurisdiction based upon the mere happening of damage within a jurisdiction conflicts with the ordinary principle of public international law obliging a substantial and bona fide connection between the subject matter of a dispute and the source of jurisdiction of a national court over its resolution.

However, from a business perspective, it is the fact that the Gutnick Court did not ground its conclusions in Dow Jones’ knowing acceptance of Australian subscribers which is perhaps most important. Indeed, by basing its decision on the website’s accessibility per se, the business risks flowing from the Court’s judgment apply irrespective of whether a firm’s website has open or carefully restricted access, and/or operates passively or has been deliberately targeted or “pushed” toward a particular audience.

2. Canada

Canada’s Supreme Court is yet to rule substantively on the issues of publication and jurisdiction vis-à-vis the internet.⁸⁶ Nevertheless, an

⁸³ Ibid, paras [20] and [53] – [54] per joint reasons and [88], [121] and [164] – [165] per Kirby J. Judgment enforceability difficulties are well-illustrated by the tumultuous LICRA above n 51, litigation. For discussion of LICRA’s facts, case history and issues, see, H Hestermeyer, “Personal Jurisdiction for Internet Torts: Towards and International Solution?” (2006) 26 Nw.J.Int’l L.&Bus. 267, 269 – 275 and B Earle and G Madek, “International Cyberspace: From Borderless to Balkanized???” (2003) 31 GA J.Int’l & Comp.L. 225, 228 - 251.

^{84 “Comity” refers to the “recognition which one nation allows within its territory to the}

legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience and to the rights of its own citizens or other persons who are under the protection of its laws”. Comity is “neither a matter of absolute obligation ... nor mere courtesy”: Black’s Law Dictionary, above n 9, 284.

⁸⁵ Gutnick, above n 8, para [101], citing Compania Naviera Vascongado v SS Cristina [1938] AC 485, 496 – 497; Tolofson v Jensen [1994] 3 SCR 1022, 1047; Zhang, above n 80, paras [105] – [106] and Zippo, above n 34, 1122.

^{86 That leave to appeal to the Canadian Supreme Court was refused in Bangoura v}

Washington Post [2006] SCR 113 and Braintech, above n 34, is acknowledged.

analysis of authorities reveals that the present Canadian position is broadly consistent with the approaches adopted in Australia⁸⁷ and England and Wales.⁸⁸

In terms of particular similarities with Australia’s approach, recent Canadian authority affirms that, in cases involving the internet, “publication” of defamatory material occurs at the location where the relevant material is accessed or downloaded, and that publication is an important determinant of where the tort at issue is committed.⁸⁹ Like Kirby J in Gutnick,⁹⁰ Canadian courts also acknowledge the importance of not conflating issues of appropriate forum and jurisdiction.⁹¹

Viewing the United States’ Sullivan⁹² decision as a reflection of “deeply- ingrained” Constitutional principles and considering English defamation law no less civilised than American,⁹³ courts similarly agree that Gutnick rightly maintained continued application of the multiple publication rule.⁹⁴ However, Canadian courts will only find jurisdiction over a foreign defendant where there is a “real and substantial connection” to the forum.⁹⁵ Hence, courts’ jurisdictional scope is much

⁸⁷ See discussion in Section IV(A) above. Notably, both Kitakufe v Oloya Ltd (1998) 67

^{OTC 315 and Braintech, ibid, were cited in Gutnick, above n 8.}

⁸⁸ See Sections IV(A) and IV(C).

^{89 See, for example, Crookes v Yahoo! (2008) 77 BCLR (4th) 201 (BCCA); Timberwest Forest}

Corp v United Steel Workers [2008] BCSC 388, paras [27] – [30]; Burke v NYP Holdings Inc [2005] BCSC 1287, para [22]; and Imagis Technologies Inc v Red Herring [2003] BCSC 366, para [22].

^{90 Gutnick, above n 8, para [105] per Kirby J.}

⁹¹ Burke, above n 89, para [24]; Wiebe v Bouchard (2005) 46 BCLR (4th) 278, paras [17] – [22] (BCSC).

⁹² New York Times v Sullivan [1964] USSC 40; 376 US 254 (1964).

^{93 Hill v Church of Scientology [1995] 2 SCR 1130, 1187 – 1188 per Cory J.}

⁹⁴ Burke, above n 89, para [22], citing Bangoura v Washington Post (2004) 235 DLR (4th) 564, para [19] (Ont SCJ).

⁹⁵ Burke, ibid, para [24] and Bangoura, ibid, para [19]. Morguard Investments Ltd v De Savoye [1990] 3 SCR 1077 and Muscutt v Courcelles (2002) 60 OR (3d) 20, paras [75] – [79] (CA) establish and refine the eight factors relevant to this factual assessment. As briefly stated in Bangoura, para [21], the eight factors relevant to determining “jurisdiction simpliciter” are: “(1) The connection between the forum and plaintiff’s claim; (2) the connection between the forum and the defendant; (3) Any unfairness to the defendant in assuming jurisdiction; (4) Any unfairness to the plaintiff in not assuming jurisdiction; (5) The involvement of other parties in the suit; (6) The Court’s willingness to recognise and enforce a judgment rendered on the same jurisdictional basis; (7) Whether the case is interprovincial in nature; (8) Comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere”.

narrower than that conferred on their counterparts in Australia by

Gutnick.

Bangoura v Washington Post and Burke v NYP Holdings Inc⁹⁶ provide the leading statements of authority on internet defamation generally and, in particular, on what constitutes a “real and substantial connection”. In Bangoura, the defendant newspaper published two articles on its website which the plaintiff alleged were defamatory in their questioning of his conduct as a United Nations representative to Kenya. At the time the articles were published, the plaintiff was not a Canadian resident and the Washington Post had only seven Canadian subscribers. When the plaintiff moved to Ontario some three years later, the articles were no longer freely available but could still be accessed through a paid archive. The evidence, however, was that only the plaintiff’s lawyer had accessed the articles prior to trial.⁹⁷ At first instance, the Court noted that the plaintiff would have a juridical advantage in Ontario and that the “real objective” of most defamation suits is “character vindication, not money”.⁹⁸ Reasoning that the Washington Post (being “a major newspaper in the world’s most powerful country ... made figuratively smaller by, inter alia, the Internet”) should have “reasonably foreseen that the story would follow the plaintiff wherever he resided”,⁹⁹ Pitt J held it appropriate for the Ontario Court to assume jurisdiction.¹⁰⁰ The Court of Appeal, however, had no difficulty concluding the connection between Ontario and the plaintiff’s claim was “minimal at best” and that, because Mr Bangoura had therefore not suffered any damage in Ontario, the appeal should be dismissed.¹⁰¹ Perhaps significantly from a future directions perspective, the Court also recorded that it found the Intervener Media Coalition’s submissions regarding four alternative approaches to jurisdiction¹⁰² particularly interesting.¹⁰³

⁹⁶ Bangoura, above n 94, reversed on appeal: (2005) 258 DLR (4th) 341 (Ont CA) and

^{Burke, above n 89.}

⁹⁷ Bangoura, ibid, paras [1] – [15].

^{98 Ibid, para [21].}

⁹⁹ Ibid, para [19.2].

^{100 Ibid, para [28].}

¹⁰¹ Ibid, paras [22] – [23].

^{102 Namely: (1) Targeting Approach; (2) Active/Passive Approach; (3) Country of Origin}

Approach; and (4) Foreseeability and Totality of Circumstances Approach. For further explanation of these approaches, see Bangoura, ibid, para [48].

¹⁰³ Ibid, paras [48] – [49].

Arguably also turning on the issue of foreseeability,¹⁰⁴ Burke similarly deals with a newspaper’s online accessibility. In Burke, the NYP published an allegedly defamatory article about the plaintiff’s involvement in a Vancouver hockey game incident. The defendant gave evidence that it had “no method” of determining the geographic origin of its website hits or the geographic location of any individual directing their browser to access its website.¹⁰⁵ Citing Gutnick and quoting extensively from Bangoura,¹⁰⁶ the Court ruled a “real and sufficient connection” established based on NYP’s article being “accessible” and “of interest” to British Columbia residents.¹⁰⁷

From a damages or relief standpoint, the Ontario Court of Appeal’s decision in Barrick Gold Corp v Lopehandia¹⁰⁸ is also important. In Barrick, the plaintiff firm was a large gold producer. The defendant was a businessman with involvement in mining who had become dissatisfied with Barrick’s operations.¹⁰⁹ The defendant embarked on a “malicious”, “high-handed”, “unremitting” and “tenacious” internet campaign against Barrick, posting a “blizzard of messages” on bulletin boards and various websites relevant to those involved in the gold- mining industry.¹¹⁰

At first instance, the Court awarded Barrick $15,000 in general damages and dismissed its application for a permanent injunction restraining the plaintiff from publishing any further defamatory comments about Barrick on the internet.¹¹¹ On appeal, the Court recorded that it was always important to “balance freedom of expression” and “not inhibit the free exchange of information and ideas on the internet by damages awards that were too stifling”.¹¹² Nevertheless, the Court held a

$50,000 punitive damages award was necessary in order to signal that

¹⁰⁴ Burke, above n 89, para [29].

¹⁰⁵ Ibid, para [4].

^{106 Burke, above n 89, paras [21], [22] and [34].}

¹⁰⁷ Ibid, paras [29] – [31].

^{108 (2005) 71 OR (3d) 416 (Ont CA) (per Doherty and Blair JJA for majority, Laskin JA}

dissenting in part regarding quantum, but not availability, of general damages).

^{109 As such the case provides a pertinent example of a situation where a firm may need to}

pursue litigation in order to vindicate/prevent further harm to its reputation due to the actions of another person (e.g. a dissatisfied customer, competitor or other stakeholder).

¹¹⁰ Barrick, above n 7, paras [13] – [14] and [65].

^{111 Ibid, paras [36] and [69].}

¹¹² Ibid, paras [65].

courts “would not countenance” use of the internet for similar defamation campaigns.¹¹³

Regarding the request for injunctive relief, the Court observed that the “highly transmissible nature of the tortious misconduct” was a weighty factor in determining whether a permanent injunction should be granted.¹¹⁴ However, finding such an order appropriate, the Court opined that, in addition to potentially being enforceable in the location where the plaintiff resided, an order would operate to prevent an ISP from continuing to post the defamatory messages.¹¹⁵

In terms of comparisons with Australia’s approach, Barrick’s comments regarding the unique nature of the internet are also significant.¹¹⁶ In particular, Barrick identifies the “mode and extent” the internet makes publications available as a particularly relevant factor differentiating the medium from other communications formats.¹¹⁷ Indeed, as the Court states:¹¹⁸

Communication via the Internet is instantaneous, seamless, interactive, blunt, borderless and far-reaching. It is also impersonal, and the anonymous nature of such communications may itself create a greater risk that defamatory remarks are believed.

Additionally, the Barrick Court reasons that the internet is a medium “more pervasive than print” where “speed takes precedence over all other values” and hyperbole and venting are at least as common as careful, considered argument.¹¹⁹ Emphasising that “traditional approaches attuned to ‘the real world’” often fail to adequately address realities of the internet world, the Court ultimately concludes that the

¹¹³ Ibid, paras [65]. Notably, the Court of Appeal also increased the lower Court’s general damages award to $75,000. Regarding the “standard factors” relevant in defamation damages claims, at para [30] the Court affirmed the factors summarised in Church of Scientology, above n 95, 1203.

¹¹⁴ Barrick, above n 7, paras [76].

^{115 Ibid, paras [77] and [83], citing McMillan Bloedel Ltd v Simpson [1996] 2 SCR 1048;}

Morguard, above n 95; and G Castel and J Walker, Canadian Conflict of Laws (5th ed) (looseleaf), 14 – 31.

¹¹⁶ Barrick, above n 7, paras [29] – [5] and [45] – [46].

^{117 Ibid, paras [32] and [34] – [35]. Note also similar suggestion by British Columbia}

Court of Appeal in Braintech, above n 34.

^{118 Barrick, above n 7, para [32]. Note also Vaquero Energy Ltd v Weir [2004] ABQB 68.}

¹¹⁹ Ibid, para [33].

internet is properly distinguished from traditional communication forms.¹²⁰ In this respect, Barrick essentially disagrees with Gutnick.¹²¹

3. England & Wales

England and Wales’ approach to internet defamation is similar to that applied in Canada.¹²² Indeed, as recently stated in Richardson v Schwarzenegger,¹²³ it is “well-settled” that “an internet publication takes place in any jurisdiction where the relevant words are read or downloaded” and that no single publication rule applies to trans- national defamation.¹²⁴ Importantly, foreseeability has also emerged as the critical test for determining jurisdiction, with courts frequently affirming that “no warrant” exists for drawing a distinction between:¹²⁵

... those who deliberately publish or put matters on the World-Wide- Web as part of their business and those who do so incidentally, and without intending to target any particular jurisdiction.

Consistent with both Australia and Canada’s positions, English courts demonstrate a commitment to ensuring that jurisdiction and forum issues remain separate and distinct in principle. However, like Canada, English courts appear less convinced than their Australian counterparts that strict application of traditional legal principles to the internet is not problematic.¹²⁶ Arguably for this reason, England and Wales’ law imposes a de minimis “minimum contacts” test for internet defamation disputes. Whilst this test is very similar to Canada’s “real and substantive connection” test, the English test falls for consideration as a forum issue,¹²⁷ rather than being part of a Court’s “jurisdiction

¹²⁰ Ibid, para [35].

¹²¹ Gutnick, above n 8, paras [12] – [17] and [38] – [44] per joint reasons.

^{122 Bangoura, above n 96, para [19].}

¹²³ Richardson v Schwarzenegger [2004] EWHC 2422, para [19].

^{124 For authority rejecting application of the single publication rule in England, see}

Loutchansky, above n 25, paras [51] – [76]; Harrods v Dow Jones [2003] EWHC 1162, para [38]; Lewis v King [2005] EMLR 4, paras [28] – [32] (CA), citing Gutnick, above n 8, paras [39], [181] and [192] per joint reasons and Callinan J; and Berezovsky v Michaels [2000] 1

^{WLR 1004, 1012 per Lord Steyn and 1024 – 1026 per Lord Hoffmann and Lord Hope}

(dissenting) (HL).

^{125 Schwarzenegger, above n 125, para [31]; Lewis, ibid, paras [33] – [34].}

¹²⁶ See, for example, Godfrey, above n 28; Berezovsky, above n 124; McManus v Beckham

^{[2002] EWCA Civ 939; [2002] 1 WLR 2982 (CA); and Jameel (Yousef) v Dow Jones & Co Inc [2005] EWCA Civ 75; [2005] QB 946 (CA).}

¹²⁷ Appropriate forum (i.e. forum conveniens) issues are generally outside the scope of this

simpliciter” determination.¹²⁸

Perhaps as a consequence of the courts’ acceptance of Gutnick and the Law Commission’s view that Gutnick’s “global risk” issues are not easily solved,¹²⁹Berezovsky v Michaels¹³⁰ and Lewis v King¹³¹ remain England and Wales’ leading statements of authority. For their contribution to this article’s attempt to place States on some sort of continuum in terms of litigation favourability for firms in internet defamation claims, several aspects of these decisions justify further discussion.

In Berezovsky, the Court (in a 3:2 majority decision) assumed jurisdiction over United States-based defendant, Forbes magazine, regarding an exposé it had published in England and elsewhere alleging that the two Russian-citizen plaintiffs were involved in organised crime in Russia. Interestingly, whilst Mr Berezovsky had a “truly international reputation” as the result of his business activities in Russia, both plaintiffs arguably had only rather “tenuous” connections with England. In dissent, Lord Hoffmann emphasised that a person’s connections with a State and their reputation therein were not the same thing.¹³² The majority accepted that the article had a much smaller number of website hits in England than the United States and that the plaintiffs were “forum shoppers in the most literal sense”.¹³³ However,

article. However, due to England and Wales’ slight difference in approach, some limited discussion of the topic vis-à-vis the minimum contacts test has been considered useful in order to properly identify similarities and differences in international jurisdiction interpretations.

¹²⁸ See generally, Schwarzenegger, above n 123, para [23]; Lewis, above n 124, para [25] and compare, for example Bangoura, above n 96, paras [13] – [18].

¹²⁹ Law Commission (UK), Defamation and the Internet: A Preliminary Investigation (Scoping Study No 2, December 2002), para [4.5.2]: “Although we have some sympathy with the concerns expressed about the levels of “global risk”, any solution would require an international treaty, accompanied by greater harmonisation of the substantive law of defamation. We do not think that the problem can be solved within the short or medium term. We do not therefore recommend reform in this area at the present time.”

¹³⁰ [2000] UKHL 25; [2000] 1 WLR 1004 (HL).

^{131 [2005] EMLR 4 (CA).}

¹³² Berezovsky, above n 124, 1022 – 1024 per Lord Hoffmann. In the case of Mr Berezovsky, his Lordship stated that the plaintiff’s reputation was “merely an inseparable segment of his reputation worldwide”. Numerous commentators have agreed with this view, e.g. A Briggs, “Private International Law” (2000) 71 British Yearbook of International Law 435, 442.

^{133 Berezovsky, ibid, 1006 – 1026. The evidence was that Forbes had approximately}

785,000 subscribers in the United States and Canada, 1900 in England and 13 in Russia.

because both plaintiffs had “acquired” at least a business reputation in England,¹³⁴ their Lordships held they must be entitled to sue for damage to their English reputations.

Similarly, Lewis required the Court to determine whether corruption allegations contained in two articles proved to have been downloaded in England allowed English courts to assume jurisdiction over a defendant principally resident in New York. The Court noted that the plaintiff was a US citizen.¹³⁵ However, holding that he was a “world- renowned” boxing promoter and “well-known” in England, the Court found Mr King had a reputation in England that he was entitled to protect.¹³⁶

The effect of Berezovsky and Lewis is that people and companies may well take their business and/or political¹³⁷ reputations with them wherever they go.¹³⁸ Individuals wishing to sue outside their home State will almost certainly need to demonstrate that they are known or well-known in the relevant foreign country.¹³⁹ However, where businesspeople, firms or international celebrities have just tenuous geographic connections with a State and plead only local damage to reputation, it is unlikely they will have their actions stayed.

From a “minimum contacts” and damage to reputation standpoint, the

Courts’ conclusions in Brisard,¹⁴⁰ Jameel,¹⁴¹ and Harrods,¹⁴² are also

Together with website hits, it was estimated a total of 6,000 people had read the article in

^England.

¹³⁴ Compare Bangoura, above n 96 where, at the time of the relevant publication Mr Bangoura had no reputation in Ontario, his reputation there instead being acquired some three years later after relocation from Kenya.

^{135 Lewis, above n 124, paras [3] – [10].}

¹³⁶ Ibid, paras [40] – [45].

^{137 On this point, Lord Hoffmann’s reference to President Yeltsin is noted.}

¹³⁸ See Bangoura’s comments to this effect, above n 96.

^{139 Compare comments of the Court in Gutnick, above n 8, para [54] per joint reasons,}

suggesting that a plaintiff’s domicile will often determine the scope of a potential defendant’s liability.

¹⁴⁰ Al Amoudi v Brisard [2006] EWHC 1062; [2007] 1 WLR 113 (HC).

^{141 Jameel (Yousef) v Dow Jones & Co Inc [2005] EWCA Civ 75; [2005] QB 946 (CA) – not to be confused with the}

Jameel v Wall Street Journal Europe Sprl [2006] UKHL 44; [2007] 1 AC 359 (“Jameel v WSJ”) case that went to the House of Lords and, very recently, the European Court of Human Rights: Wall Street Journal Europe Sprl v The United Kingdom [2009] ECHR 471 (10 February 2009, App No

^{28577/05). Jameel v WSJ focused on the two issues of (a) whether corporations such as}

the WSJ could recover damages without pleading or proving special damages and (b) the

important. Whilst Brisard concerned an open-access website, both Harrods and Jameel involved website publications of defamatory material to only a “very small number of subscribers”.¹⁴³ Although all courts accepted that English law contained a presumption of damage upon publication, both Jameel and Brisard concluded that the presumption was “not irrebuttable”.¹⁴⁴ Accordingly, in the case of open-access websites, or bulletin boards or hyperlinks to a defamatory publication from a subscription site, English courts will not simply infer that publication has occurred. Rather, claimants must produce evidence that the relevant defamatory material was in fact downloaded by more than a de minimis number of readers.¹⁴⁵ As to the number of downloads required to cross this threshold, Jameel establishes that assertion of jurisdiction where material is published to just two neutral subscribers would be an abuse of process; Harrods suggests that 10 publications may be sufficient.¹⁴⁶

Likewise, Schwarzenegger¹⁴⁷ and Bunt v Tilley¹⁴⁸ justify brief mention for their respective suggestions that English courts are unlikely to grant permanent injunctions in internet defamation cases and that website publishers may be able to escape liability for unchecked defamatory content that is removed quickly once brought to their attention.

scope and application of what has come to be called “Reynolds privilege” – an important form of qualified privilege available in the United Kingdom but currently unavailable in New Zealand. In the Court of Appeal: [2005] EWHC 2520; [2005] QB 904, directions were given by Lord Phillips MR (para [6]) to hear the “presumption of damage point” and two applications in relation to presumption of falsity at the same time as the Jameel (Yousef) v Dow Jones & Co Inc case analysed in this article.

¹⁴² Harrods, above n 124.

^{143 Brisard, above n 140, para [1]; Jameel, above n 141, paras [10] and [61]; and Harrods,}

ibid, para [4].

^{144 Harrods, ibid, para [39]; Jameel, ibid, paras [27], [32] and [37] – [41]; and Brisard, ibid,}

paras [32] – [37]. Notably, all courts cited Shevill v Presse Alliance SA [1996] AC 959 as authority for the existence of the presumption per se. Thus, to the extent any legislation differences are important in relation to this point, Shevill followed litigation by the parties in the European Court of Justice: [1995] 2 WLR 499, and was determined under the Brussels Convention regulating jurisdiction between EC countries.

^{145 Brisard, ibid, paras [34] – [37].}

¹⁴⁶ Jameel, above n 141, paras [17] and [70] and Harrods, above n 124, para [4]. In Jameel, the evidence was that five subscribers had downloaded the offending material. Three of these, however, were connected to the plaintiff’s legal team.

^{147 Above n 123, para [30].}

¹⁴⁸ [2006] EWHC (QB) 407; [2007] 1 WLR 1243, paras [21] – [23], [36] – [37] and [77] – [79] (HC).

4. United States

Perhaps as a consequence of “personal jurisdiction analysis [having] yet to be reconceived and rearticulated by the Supreme Court”,¹⁴⁹ United States’ defamation law currently evidences a rather confused approach to jurisdiction¹⁵⁰ in internet cases.

Generally speaking, early internet defamation cases apply an “effects”– based jurisdiction test¹⁵¹ similar to that presently applied in other common law countries, i.e. a standard focused on the domicile of the plaintiff and the location of his or her harm.¹⁵² More recently, however, with the exception of a few aberrant decisions,¹⁵³ Circuit courts have ostensibly been charmed by the view that the internet is a very different new communications medium that necessitates departure from traditional defamation law principles¹⁵⁴ in order to ensure State sovereignty is not eviscerated.¹⁵⁵ The heretical presumption that

¹⁴⁹ ALSScan Inc v Digital Serve Consultants Inc [2002] USCA4 124; 293 F. 3d 707, 713 (4th Circ, 2002). See also, Gator Com Corp v LL Bean Inc [2003] USCA9 593; 341 F. 3d 1072, 1077 (9th Circ, 2003): “No Supreme Court cases ... have addressed the issue of when and whether general jurisdiction may be asserted over a company that does business on the internet”.

¹⁵⁰ As P Borchers explains, United States’ jurisdictional principles are “judicially created but limited by the Constitution’s due process clauses” contained in the Fifth and Fourteenth Amendments: “Tort and Contract Jurisdiction via the Internet: The

^{Minimum Contacts’ Test and the Brussels Regulation Compared” (2003) NILR 401, 402.}

See also explanation offered in Burger King Corp v Rudzewicz [1985] USSC 126; 471 US 462 (1985), 471 – 472. Due Process compliance under the Constitution requires courts to be satisfied that defendants have “certain minimum contacts with [the forum state] such that maintenance of the suit does not offend traditional notions of fair play and substantial justice”: International Shoe Co v Washington [1945] USSC 158; 326 US 310 (1945), 316.

^{151 Specifically, that articulated by the Supreme Court in the non-internet case of Calder v}

Jones [1984] USSC 53; 465 US 783 (1984), 788 – 789, citing World-Wide Volkswagen [1980] USSC 12; 444 US 286 (1980), 297

^{– 298. As D Kidd explains, the Calder test requires courts to satisfy themselves that that:}

“the defendant performed (1) an intentional act, (2) aimed at the forum, (3) causing foreseeable harm in the forum”: “Casting the Net: Another Confusing Analysis of Personal Jurisdiction and Internet Contacts in Telco Communications v An Apple a Day” (1998) 32 U. Rich. L. Rev. 505, 517.

¹⁵² Compare, for example, Gutnick, above n 8; Bangoura, above n 96 and Lewis, above n

^124.

¹⁵³ Such as Inset Systems Inc v Instruction Set Inc 937 F. Supp 161 (D. Conn, 1996) – broadly holding where websites are published on the internet, a finding of “purposeful availment” is permissible in all locations where the website is accessible. Since Zippo, above n 34,

^{Inset has received little attention from United States Courts.}

¹⁵⁴ As articulated in, for example, International Shoe Co, above n 150; Calder, above n 151;

^{and Asahi Metal Industries v Superior Court [1987] USSC 18; 480 US 102 (1987).}

¹⁵⁵ See, for example, American Libraries Association v Pataki 969 F. Supp 160 (SDNY, 1997),

website publications are aimless and targeted at no one has also been given surprising weight.¹⁵⁶ Consequently, consistent with the country’s unparalleled free speech protections afforded to publishers under the country’s Constitution as a matter of substantive law,¹⁵⁷ America’s approach to jurisdiction in internet cases now differs markedly from most other countries. Importantly for firms concerned about their exposure to liability when trading abroad, America’s general approach heavily favours potential defendants.¹⁵⁸ Additionally, United States’ tests for jurisdiction tend to be formulated without particular reliance on the issue of publication.¹⁵⁹

Regarding particulars of its contemporary approach, like Canada and England and Wales, America requires satisfaction of a foreseeability test, i.e. a sufficient connection between the proposed forum and claim. However, unlike its common law counterparts, America also requires proof of a sufficient connection between the proposed forum and defendant in the form of “purposeful availment”.¹⁶⁰ Hence, America’s

169: “Typically states’ jurisdictional limits are related to geography; geography, however, is a virtually meaningless construct on the Internet”; ALS Scan, above n 149, 713 – 714. Compare comments Callinan J in Gutnick, above n 8. In this sense, the United States’ view is somewhat aligned with that in Canada, and to a lesser extent, England and Wales, but out of step with Australia.

^{156 Zippo, above n 34,was the first Court to formulate a distinction between “interactive”}

and “passive” websites on this basis. Barrett v The Catacombs Press 44 F. Supp 2d 717 (ED Pa, 1999) aligns the posting of messages on discussion/bulletin boards with the maintenance of passive websites. See comments of A Spencer, above n 43, 74 and 97 also to this effect.

¹⁵⁷ See New York Times v Sullivan, above n 92, 279 – 280 and Curtis Publishing Co v Butts 288

^{US 130 (1967), 155.}

¹⁵⁸ By contrast, if looking to sue in the United States for defamation suffered, New

^{Zealand firms should note the Supreme Court’s statement in Piper Aircraft Co v Reyno 454}

US 235 (1981), 255 – 256 that foreign plaintiffs are entitled to “less deference” in forum non conveniens assessments.

¹⁵⁹ V Black and M Deturbide, “Braintech Inc v Kostiuk: Adjudicatory Jurisdiction for Internet Torts” (2000) 33 C.B.L.J. 427, 436. For an historical account of the United States’ various tests, see S Tita and G Seamby, “The ‘Effects Test’: Unifying Personal Jurisdiction Case Law in Internet Defamation Cases” (2000) 33 L.T.J. 1.

¹⁶⁰ See generally, International Shoe Co, above n 152; Cybersell Inc v Cybersell Inc [1997] USCA9 3689; 130 F. 3d 414 (9th Circ, 1997) – websites simply advertising or soliciting sales held unable to support finding of jurisdiction without “something more”; Toys R Us Inc v Step Two SA 318 F 3d

^{446, 454 (3rd Circ, 2003); and Young v New Haven Advocate [2002] USCA4 228; 315 F. 3d 256, 261(4th Circ,}

2002), leave to appeal to Supreme Court denied: [2003] USSC 3614; 538 US 1035 (2003): “In determining whether specific jurisdiction exists, we traditionally ask (1) whether the defendant purposefully availed itself of the privileges of conducting activities in the forum state, (2)

“minimum contacts”¹⁶¹ approach is frequently summarised as being one of “effects plus targeting”.¹⁶²

Young v New Haven Advocate¹⁶³ is the dominant authority presently applied by courts required to decide jurisdiction in internet defamation cases. In Young, a Connecticut newspaper posted allegedly defamatory articles on its website regarding a prison warden resident in Virginia. In a manner consistent with Zippo’s “sliding-scale” model (whereby the constitutionality of a Court’s assertion of personal jurisdiction “is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet”),¹⁶⁴ the Court carefully examined the nature and extent of the defendant’s activities in Virginia. Specifically, the Court noted that the defendant had no offices, personnel or subscribers in Virginia; that it derived no “substantial” revenue from activities in Virginia; and did not “regularly” solicit or do business there.¹⁶⁵ The Court accepted that the offending articles had been downloaded in Virginia. However, ultimately declining to assert jurisdiction, the Fourth Circuit concluded that the defendant had not manifested “an intent to aim [its] websites or the posted articles at a

whether the plaintiff's claim arises out of the defendant's forum-related activities, and (3) whether the exercise of personal jurisdiction over the defendant would be constitutionally reasonable.”

¹⁶¹ World-Wide Volkswagen, above n 151, 291 – 292; International Shoe Co, above n 150.

^{162 M Greenberg, “A Return to Lilliput: The LICRA v Yahoo! case and the Regulation of}

Online Content in the World Market” (2003) 18 Berkeley Tech.L.J. 1191, 1193.

^{163 Above n 160. Interestingly, Young was delivered just three days after Gutnick, above n}

8.

^{164 In Zippo, the Court distinguished between what it called “active”, “passive” and}

“interactive” websites, stating (in a now widely-cited passage) at 1124: “At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in the foreign jurisdiction. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction. The middle ground is occupied by interactive Web sites where a user can exchange

^{information with the host computer. In these cases, the exercise of jurisdiction is}

determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.”

¹⁶⁵ Young, above n 160, 260.

Virginian audience”, i.e. the defendant had not sufficiently targeted

Virginia.¹⁶⁶

Acknowledging that the meaning of “targeting” is yet to be categorically defined,¹⁶⁷ the effect of Young for New Zealand firms operating “commercially interactive” websites is that they are unlikely to be “hauled” to account for defamatory material accessible in America unless they have both targeted their website at the particular forum state and evidence an express intent to interact with its residents.¹⁶⁸ However, where firms’ website content is accessible in States whose appeals are determined by the Third Circuit,¹⁶⁹ firms should be aware that the jurisdiction test is somewhat less difficult for potential plaintiffs to satisfy. Indeed, in contrast to Young’s cumulative test, the Third Circuit has articulated its factors as alternatives:¹⁷⁰

[T]he mere operation of a commercially interactive website should not subject the operator to jurisdiction anywhere in the world. Rather, there must be evidence that the defendant “purposefully availed” itself of conducting activity in the forum state by directly targeting its website to the state, knowingly interacting with residents of the forum state via its website, or through sufficient other related contacts.

Consequently, firms may find themselves required to account in defamation if they either target the foreign forum or interact with

¹⁶⁶ Ibid, 258 – 259, citing ALS Scan, above n 149. Importantly, in ALS Scan, the Court stated that it was “adopting and adapting the Zippo [sliding-scale] model”: at 714.

¹⁶⁷ See, for example, Catacombs Press, above n 156, and Northwest Healthcare Alliance Inc v Healthgrades.Com Inc [2003] USSC 3230; 538 US 999 (9th Circ, 2003) – considering assertion of jurisdiction appropriate and holding that by offering Washington residents healthcare information that was of interest to them via its website, the defendant had “purposely interjected itself” into the Washington market.

^{168 Young, above n 160, currently appears to be applied by at least the Fifth and Sixth}

Circuits: Revell v Lidov [2002] USCA5 522; 317 F.3d 467, 475 (5th Circ, 2002); Neogen Corp v Neo Gen Screening Inc [2002] USCA6 75; 282 F.3d 883, 890 (6th Circ, 2002). States whose appeals are governed by these Courts are: 5th Circuit – Los Angeles, Massachusetts and Texas; 6th Circuit – Kentucky, Michigan, Ohio and Tennessee.

¹⁶⁹ Namely Deleware, New Jersey and Pennsylvania.

^{170 Toys R Us, above n 160, 454. In declining to exercise jurisdiction on the ground that}

the defendant had not targeted New Jersey, the Court considered it particularly significant that the defendant’s advertised product could only be shipped to Spanish addresses and that the cost of items was given only in Pestas and Euro. The Third Circuit’s approach appears to be followed by at least the Seventh Circuit (covering Illinois, Indiana and Wisconsin): Jennings v AC Hydraulic [2004] USCA7 437; 383 F.3d 546 (7th Circ, 2004).

residents.¹⁷¹ Hence, particularly as technologies further develop, firms wishing to minimise their potential online defamation liability should carefully review the technical “interactivity” of any advertisement or information they wish to make available on the Internet as well as the extent to which they are “actually and deliberately us[ing] their website to conduct commercial transactions or other activities with residents of the forum”. Where any doubts over content’s defamatory nature exist and publication cannot be delayed, it may be that the most “passive” means of communication available should be preferred¹⁷² and, if possible, directed only to a limited number of locations.¹⁷³

5. European Union

By acting to harmonise its Member States’ laws, the European Union has become an important powerbroker in many international issues.¹⁷⁴

As such, brief comment on EU developments vis-à-vis jurisdiction and choice of law in defamation cases is perhaps instructive for firms looking to assess both their current and likely future online trading risks.

In terms of jurisdiction, with the exception of Denmark, all Member

States are today governed by the “Brussels I” Regulation.¹⁷⁵ Brussels I

¹⁷¹ Fairbrother v Am Monument Found LLC 340 F. Supp 2d 1147, 1156 (D Colo, 2004). Whilst Circuit Courts governing appeals in other States are yet to address the issue in detail, District Court decisions in these States suggest that firms providing merely “passive” information websites will not be found to have “purposefully availed” themselves of the “privileges of conducting activities in the forum state”.

^{172 See, however, best practice recommendations below: Section VI(A). Indeed, the most}

prudent level of “interactiveness” may well turn on whether the material is an isolated or regular communication.

¹⁷³ See comments of P Borchers, above n 150, 410 suggesting that, whilst generally imprecise, the “two ends of the [jurisdiction] spectrum” are “fairly clear”: if statements

are targeted primarily to persons within the forum, jurisdiction exists; if primarily targeted to persons outside the forum, minimum contacts are lacking. However, if a person’s reputation is regional or national, it is unclear whether jurisdiction is properly asserted throughout the region or State or at only a single location.

¹⁷⁴ In addition to its 27 current Member States, the European Union includes three legislative bodies, namely the European Commission, the European Parliament and the Council of the European Union. It is these legislative bodies which are collectively responsible for the continued harmonisation of disparate Member State laws:

<http://europa.eu/index_en.htm> last viewed 4 January 2009. As to harmonisation of laws obligations, see also Treaty on European Union, 29 July 1992, 1992 O.J. (C 191) 5.

¹⁷⁵ Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the

updates the Brussels Convention 1968¹⁷⁶ and regulates all civil and commercial cross-border disputes.¹⁷⁷ Pursuant to Art 5(3), tort litigation such as defamation is decided by courts in the place where the “harmful event occurred or may occur”. Whilst Brussels I does not apply to non-Member State defendants unless the parties have agreed otherwise in writing,¹⁷⁸ where an EU plaintiff sues a defendant resident outside the EU, Art 4 provides that the jurisdiction rules of the plaintiff’s State apply. Applied to firms’ internet publications, where EU plaintiffs¹⁷⁹ wish to sue in defamation outside the EU, they can invoke the benefit of their own national or place of domicile rules. However, consistent with America’s privileging of its own plaintiffs,¹⁸⁰ where New Zealand-resident firms attempt to sue for defamation committed against them in the EU, the dispute will be governed by the general rules formulated for the European Community.¹⁸¹

Regarding choice of law procedures, in its recent Rome II

^{negotiations182 on the law applicable to non-contractual obligations,183}

recognition and enforcement of judgments in civil and commercial matters (“Brussels I”). Brussels I entered into force on 1 March 2002. A full text version of Brussels I is

available at: <http://curia.europa.eu/common/recdoc/convention/en/c- textes/2001R0044.htm> last viewed 4 January 2009.

¹⁷⁶ Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. Denmark has continued to follow this Convention.

¹⁷⁷ Denmark follows the Brussels Convention 1968.

^{178 Brussels I, Arts 3, 22 and 23.}

¹⁷⁹ Importantly, because Brussels I applies to parties on the basis of “domicile” and not nationality, New Zealand-incorporated firms or subsidiaries resident in the EU may also be able to avail themselves of the Regulation’s benefits: Brussels I, Art 2.

^{180 See Piper Aircraft, above n 158.}

¹⁸¹ For additional discussion on this point and Brussels I generally, see C Kotuby, “International Developments and External Effects: The Federalization of Private International Law in the European Community and its Consequences for Transnational Litigants” (2002) 21 J.L.& Com 157, 166.

¹⁸² For discussion of defamation issues under Rome II, see generally, A Warshaw, “Uncertainty from Abroad: Rome II and the Choice of Law for Defamation Claims” (2007) 32 Brook.J.Int’l L. 269.

^{183 Rome II is an extension of the Rome Convention 1980 (“Rome I”). Rome I governs}

contractual disputes and applies regardless of whether parties are resident in an EU Member State: Art 1. Significantly, under Rome I, the choice of law applicable to contractual claims is “the law of the country with which it is most closely connected”: Art

^{4(1). This approach is very similar to America’s defamation standard. Rome II does not}

interfere with the E-Commerce Directive, which provides that in commercial cross- border disputes, the applicable law is that of the country of origin: Council Directive

2000/31/EC of 8 June 2000 on Certain Legal Aspects of the Information Society

the EU expended much effort attempting to formulate a rule for online publishing that was satisfactory to both the media and defamation plaintiffs.¹⁸⁴ Whilst significant debate was had over various “place-of- harm” and “place-of-publication” drafts, EU Members and the European Parliament and Commission were unfortunately unable to reach consensus. Consequently, despite the Commission being mandated to produce a further Report on applicable law in defamation disputes,¹⁸⁵ a significant gap has been left in the adopted version.¹⁸⁶

^{Accordingly, if nothing else, Rome II’s failure regarding online}

publishing emphasises the tremendous difficulties likely to be encountered in any attempt to secure an international treaty governing internet defamation law.

D. Newlands & the New Zealand Position

The Newlands litigation¹⁸⁷ arose out of a generally-accessible article entitled “Wannabe Unis” made available on the defendant newspaper’s website in 2002.¹⁸⁸ The article included a list of “degree mills” that offered “to confer degrees based on life experience”. University of Newlands – a New Zealand company in the process of creating an

Services, in Particular Electronic Commerce, in the Internal Market, 2000 O.J. (L 178) 4.

^{184 See Art 3(2) of Rome II’s first draft: Justice and Home Affairs, Consultation on a}

Preliminary Draft Proposal for a Council Regulation on the Law Applicable to Non-contractual Obligations (2002), available at: <http://www.eadp.org/main7/position/RomeII ConsultationPrelimDraft030502.doc> last viewed 24 August 2009. Compare Art 3(1) of the second draft: Commission of the European Communities Proposal for a regulation of the European Parliament and the Council on the Law Applicable to Non-contractual Obligations, presented on 27 July 2003; COM (2003) 427 and Final Proposal: Final Report on the Proposal for a Regulation of the European Parliament and of the Council on the Law Applicable to Non-contractual Obligations (June 2005), both available at:

<http://ec.europa.eu/prelex/detail_dossier_real.cfm?CL=en&DosId=184392#

^{383447> last viewed 24 August 2009.}

¹⁸⁵ The adopted Rome II mandates this Study be furnished no later than 31 December

^{2008. However, at the time of this article’s writing, a published version of the}

Commission’s findings did not appear to be available.

^{186 Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007}

on the law applicable to non-contractual obligations (Rome II). Rome II was finally adopted on 11

^{July 2007 and comes into application on 11 January 2009. The Regulation applies to all}

damage occurring after 20 August 2007: European Commission, The Rome II Regulation, available at: <http://eur-lex.europa.eu/LexUriServ/site/en/oj/2007/l_199/l_199200

70731en00400049.pdf> last viewed 24 August 2009.

^{187 University of Newlands v Nationwide News Pty Ltd, above n 12.}

¹⁸⁸ www.theaustralian.news.com.au.

internet-based University, alleged that its inclusion in the list of “degree mills” was defamatory and likely to cause the company pecuniary, professional and academic harm. The Australian defendant did not have a place of business in New Zealand. The webserver that controlled its website (www.theaustralian.news.com.au) was also located and operated in Australia. The defendant protested against the Court’s jurisdiction and applied to have the proceeding stayed or dismissed.¹⁸⁹

In the High Court, Gendall AJ considered New Zealand’s assumption of jurisdiction appropriate. In reaching this decision, His Honour affirmed Gutnick’s conclusions that publication and the tort of defamation occur at the location where the defamatory material is downloaded.¹⁹⁰ His Honour held that that Gutnick’s conclusions were not restricted to subscription websites.¹⁹¹ Additionally, Gendall AJ recorded that a decision to upload material on the internet carried with it an associated risk of being sued abroad for defamation.¹⁹²

In the Court of Appeal, the case’s focus shifted slightly based on the Court’s view that the issue of where “publication” had occurred was “but one” factor in the overall assessment of whether a plaintiff had a “good arguable case” on the merits¹⁹³ that justified assumption of jurisdiction.¹⁹⁴ Opining that the determinative “good arguable case” issue was the appellant’s ability to prove any sort of publication in New Zealand, the Court considered it appropriate to “proceed on the basis, without deciding, that Gutnick states the law in [New Zealand]”.¹⁹⁵ The Court noted the absence of evidence confirming anyone other than the plaintiff had downloaded the offending material. Viewing this aspect significant in terms of the plaintiff’s ability to show loss as required by s

6 of the Defamation Act,¹⁹⁶ the Court considered it inappropriate to assert jurisdiction and accordingly dismissed the proceeding.¹⁹⁷

¹⁸⁹ High Court decision, paras [2] – [4]; Court of Appeal decision, paras [1] – [11].

¹⁹⁰ At para [30].

^{191 At paras [31] – [34]. On this point Gendall AJ disagreed with the obiter comments}

expressed by the Court in Macquarie Bank Ltd v Berg [2002] NSWSC 1110.

^{192 At para [35].}

¹⁹³ As per requirement under High Court Rules, r 219(a).

^{194 Court of Appeal decision, para [31].}

¹⁹⁵ At para [22].

^{196 At paras [48] – [51]. The fact that the plaintiff company’s name change from}

University of Newlands to University of Newlands Ltd potentially created difficulties in

Declining the University’s application for leave to appeal,¹⁹⁸ the Supreme Court affirmed that the Court of Appeal was correct to hold that the case did not turn on the issue of the “circumstances in which defamation occurs in New Zealand as a result of material being available on the internet”.¹⁹⁹ Significantly, however, the Court also recorded that its decision did not rule out the possibility of revisiting Gutnick’s application in an appropriate case.²⁰⁰ Consequently, whilst internet publications can certainly give rise to defamation liability in New Zealand,²⁰¹ the scope of Gutnick’s application and New Zealand’s position on associated issues arising since is far from clear.

E. Best Practice Recommendations²⁰²

In light of the uncertainties left unresolved by Newlands, this section draws together key themes and issues identified in the discussion above and sets out some practical best practice recommendations for New Zealand firms seeking to:

(a) minimise their risk of being required to account for internet defamation in a foreign Court; and/or

(b) maximise their chances of litigation success where persons publish defamatory comments against them online.

The existence of proposals offering theoretical solutions in this area (e.g. development of an international treaty, dispute resolution via international arbitration, abandonment of the Gutnick model in favour of a place of origin or minimum contacts test or elimination of internet

terms of it having a “reputation” able to be harmed was also noted: paras [44] – [47].

¹⁹⁷ At paras [52] – [53].

^{198 It is noted that the s 13 of the Supreme Court Act 2003 imposes relatively stringent}

requirements for the granting of leave to appeal. Specifically, the Supreme Court must not grant leave unless the applicant shows that: “(a) the appeal involves a matter of general or public importance; or (b) a substantial miscarriage of justice may have occurred, or may occur unless the appeal is heard; or (c) the appeal involves a matter of general commercial significance”.

^{199 Supreme Court decision, para [3].}

²⁰⁰ At paras [4] – [6].

^{201 See, for example, O’Brien v Brown [2001] DCR 1065.}

²⁰² The usual disclaimers fully excluding liability apply to this article. Consultation with appropriate professionals should therefore be sought before any action is taken on any content/recommendations contained in this article.

defamation, etc.) is acknowledged. However, whilst perhaps offering the most effective means of achieving long-term resolution of the debate presently occurring between nation States in this area, such proposals are of little assistance to New Zealand firms wishing to protect themselves from liability under current laws. Accordingly, this section’s focus is on concrete, practical guidelines which firms can utilise to protect themselves today. To this extent, nine steps emerge as useful considerations for firms with respect to (a). Under (b), three factors are identified as particularly crucial. Each factor is briefly explained below.

1. “Afghanistan to Zimbabwe”: how to limit exposure to the

“spectre of ‘global’ liability”²⁰³

(a) Become familiar with foreign defamation laws

Complexities and disparities in countries’ various substantive laws can render this step an arduous task.²⁰⁴ However, firms can restrict the scope of initial inquires to becoming familiar with the laws of the countries in which material is uploaded²⁰⁵ and those from which its website has significant traffic or generates substantial sales orders. Through such analysis firms should aim to glean sufficient insight into foreign defamation laws to allow informed choices to be made as to whether or not continued “targeting” or maintenance of a “substantial connection” with a particular forum is desirable or prudent given the firm’s particular risk preference.

²⁰³ Gutnick, above n 8, paras [54] per joint reasons and [165] per Kirby J.

^{204 Discussion of countries’ various substantive laws is outside the scope of this article}

but see authorities cited at n 12.

^{205 Indeed, it is clear that firms cannot complain about jurisdiction being asserted for}

determination of world-wide damages in the country of upload because a positive choice has been made by the publisher to upload material/send an email etc from that location: O Bigos, above n 41; Gutnick, above n 8.

(b) Review all online content²⁰⁶

& exercise responsible self-censorship

Broadly speaking, publication of accurate information is the best means of minimising the risk of becoming embroiled in defamation litigation abroad. Accordingly, particularly in countries where firms have clearly identifiable competitors,²⁰⁷ deliberate or reckless inclusion of any content that misrepresents an individual or company should be avoided in all internet-mediated communications.²⁰⁸ Likewise, in countries where strict free speech laws prevail, close attention should be paid to the nature of accurate content intended for publication. Indeed, in countries such as China and Saudi Arabia publication of some accurate content is prohibited per se (e.g. explicit anatomy sites or material deemed unfavourable to the Government or Royal family), albeit that much offending content is usually “blocked” or “filtered” at a State level before reaching its intended targets.²⁰⁹ Where firms are unsure about the content of any material they have or wish to make available online, legal advice should be sought. It is important that archived material is not forgotten in this exercise, and that such material is checked for compliance with laws in all forums where it is accessible and an appropriate warning against treating it as truth included.²¹⁰

Employers should also consider the impact of employees’ use of non- web or direct communications technologies (e.g. Kazaa and Morpheus).²¹¹ If uncomfortable with any of the risks generated by employees’ internet use, firms should develop employee internet use

²⁰⁶ Whilst this article’s discussion has focused on the internet’s most popular applications

^{– namely the World-Wide-Web and email, the comments included here apply equally to}

“blogs”, “pop-ups”, and other internet content posted by a business or its employees.

^{207 As numerous commentators have emphasised, litigation statistics (at least in the}

United States) suggest that most defamation litigation arises as the result of competitor complaint: R Viguerie and A Keaty, “The World Wide Reach of the Internet: Can a Company Protect Itself From the Jurisdiction of Foreign Courts?” (2006) 34 Academy of Marketing Science Journal 87, 88.

²⁰⁸ Attention is drawn to Courts’ holdings in Canada and England and Wales that individuals/companies can take their business/political reputations with them wherever they go in the world: Bangoura, above n 96; Lewis, above n 124; and Berezovsky, above n

^124.

²⁰⁹ B Earle and G Madek, above n 83, 256.

^{210 Loutchansky, above n 25, para [74].}

²¹¹ A Spencer, above n 43, 94 – 97 and 119 – 124.

policies and require agreement to these as part of their employment contract conditions.

If the cost of legal advice is prohibitive or delayed release of material is unacceptable, compliance with the international community’s most conservative defamation laws is recommended.²¹² As a general stringency guide, overall, Australian and New Zealand defamation laws are slightly more liberal than those of Canada and England and Wales. However, the free speech and protection of reputation balance struck in all these countries is far less favourable to publishers than that applied by America.²¹³ Where material concerns a celebrity, business or political figure or other “well-known” individual, it may be sensible to restrict publication to the location where the subject is domiciled, or primarily or ordinarily resides and routinely returns to after visiting other places.²¹⁴

(c) Restrict user access & utilise “interactive” websites

For firms concerned about vulnerability in high-risk forums (i.e. those applying more stringent defamation laws than New Zealand), use of geo-location technologies²¹⁵ and subscription-only website access should be explored. However, in any application of these technologies it is important to recognise that such techniques may provide little to no additional protection in locations where Gutnick’s conclusions prevail.

Whilst potentially costly to implement, LICRA²¹⁶ affirms that while technologies cannot currently prevent internet users’ attempts to access content with 100% effectiveness, “filters” and other “blocking devices”

²¹² See generally, A Beyer, “Defamation on the Internet: Joseph Gutnick v Dow Jones” [2004] MurUEJL 26; A Mansfield, “Cyber-libelling the Glitterati: Protecting the First Amendment for Internet Speech” (2007) 9 Vanderbilt J. Ent. & Tech. Law 897.

²¹³ N Shanmuganathan and L Caddy, “Liability of online publishers following Gutnick” (2003) 153 NLJ 7071; J Hughes, “The Internet and the Persistence of Law” (2003) 44

B.C.L.Rev. 359, 364: “[free speech] is the most obvious area of law where the Internet is unlikely to produce substantial harmonization of legal norms”.

²¹⁴ See generally, Bangoura, above n 96; Lewis, above n 124; and Berezovsky, above n 124.

^{215 For useful discussion of available technologies, see generally D Svantesson, “Geo-}

Location Technologies and Other Means of Placing Borders on the ‘Borderless’ Internet” (2004) 23 Marshall J.Comp.&Info.L. 101.

²¹⁶ LICRA, above n 51, 1185 and 1203.

with success rates sufficient to protect against liability (i.e. upwards of

90% effectiveness) can be installed to prevent residents in particular locations from accessing all or part of a website’s content so that a firm complies with local laws.²¹⁷ Establishment of separate corporate entities for the conduct of business in each State where a firm interacts with residents can also reduce litigation risk. Likewise, firms’ hosting of separate websites specifically designed to comply with States’ particular defamation laws can further safeguard against risk.²¹⁸

Regarding subscription and “interactive”²¹⁹ websites, whilst perhaps a double-edged sword,²²⁰ the key benefit of interactivity for firms is the ability to bind viewers through “clickwrap” contracts or “user agreements”²²¹ which protect their own interests. Additionally, as case law above establishes, where firms actively attempt to limit their global liability by refusing to accept subscriptions or credit card payments²²² from residents in locations with defamation laws unacceptable to them, without more, courts outside both the plaintiff’s home country and State of domicile are unlikely to assert jurisdiction.²²³

²¹⁷ LICRA, ibid; B Cooper, “The US Libel Law Conundrum and the Necessity of

^{Defensive Corporate Measure in Lessening International Internet Libel Liability” (2005)}

21 Conn.J.Int’l L. 127, 152 – 153.

^{218 R Viguerie and A Keaty, above n 207, 88. The existence and growing prevalence in}

internet users’ use of anonymising devices (e.g. Safe Web) in response to geo-location technologies is noted: B Earle and G Madek, above n 83, 256 – 257.

²¹⁹ Zippo, above n 34.

^{220 In that it establishes an interaction sufficient for a foreign forum’s assertion of}

jurisdiction: B Cooper, above n 217, 151.

^{221 “Clickwrap” contracts generally require readers desiring access to a particular website}

to first read a firm’s terms of use conditions and then take the positive step of clicking “yes” to subscribe to the website. The decision to provide subscription access to a website at a cost or free of charge is solely at the website operator’s discretion. For discussion of “clickwrap” contracts, see generally, P Arne and M Bosse, “Overview of Clickwrap Agreements” (Jan-Mar, 2003) Practising Law Institute 279. Regarding “clickwrap” contracts’ “shrinkwrap” counterpart, note ProCD v Szeidenburg 86 F. 3d 1447 (7th Circ, 1996).

^{222 U Kohl, above n 11, 1051.}

²²³ See, for example, Bangoura, above n 96; Toys R Us, above n 160. Compare Dow Jones’ arguable knowing acceptance of subscriptions from Australian residents in Gutnick, above n 8.

(d) Use disclaimers & structure transactions carefully

Whilst clearly of limited use under an unrestricted Gutnick standard, in forums applying some sort of “minimum contacts” or “targeting” test,²²⁴ disclaimers stating, for example, that content is intended only for readers in New Zealand, can weigh in publishers’ favour in courts’ evaluations of the propriety of asserting jurisdiction. Particularly for firms operating e-commerce websites, “clickwrap” contract inclusion of “terms and conditions” vis-à-vis forum selection, choice of law, limitation/exclusion of damages, or even mandating arbitration is prudent.²²⁵ Regarding the particulars of such provisions, legal advice should be sought to ensure that wording is as advantageous as possible to the relevant firm.

(e) Keep businesses small/mid-sized

Acknowledging that this recommendation may appear ironic given that growth is the key objective driving many firms’ decisions to pursue e- commerce activities, most commentators agree that large international entities are “natural targets” for defamation litigation due to perceptions of “deep pockets” and the increased likelihood of securing settlement or having a judgment satisfied.²²⁶

(f) Insure & attempt to arbitrate if sued

Absent an international Convention, disparate jurisdictional tests for defamation on the internet are unlikely to converge unassisted. Accordingly, firms publishing online should purchase insurance to insulate themselves from damages claims in foreign forums and the “spectre of ‘global’ liability”.²²⁷

²²⁴ See Section IV above.

^{225 R Viguerie and A Keaty, above n 207, 88; P Swire, “Elephants and Mice Revisited:}

Law and Choice of Law on the Internet” (2005) 153 U.Pa.L.Rev. 1975, 1989 – 1993; S Bone, “Private Harms in the Cyber-World: The Conundrum of Choice of Law for Defamation Posed by Gutnick v Dow Jones & Co” (2005) 62 Wash.& Lee L.Rev. 279, 314 –

^{335 (suggesting an arbitration model for internet defamation similar to the World}

Intellectual Property Organisation system applicable to trademark and domain name disputes).

²²⁶ B Cooper, above n 217, 146 and P Swire, “Of Elephants, Mice and Privacy: International Choice of Law and the Internet” (1998) 32 Int’l Law 991, 991 – 1020.

²²⁷ Gutnick, above n 8, para [165] per Kirby J. Indeed, as Pitt J stated in Bangoura, above n

(g) Monitor the law for changes

As the above discussion highlights, internet defamation law is in a state of flux. Firms concerned about minimising their litigation risk should therefore keep themselves up-to-date with developments in case law and international agreements and/or seek legal advice from time-to- time regarding matters which may affect their internet publishing decisions.

(h) Remove defamatory content as soon as possible when notified

In Barrick,²²⁸ the Ontario Court of Appeal expressly identified the defendant’s delay in removing material once notified of its defamatory status and failure to publish a retraction as important factors supporting its increase in the lower Court’s damages award. Hence firms should judiciously consider requests for removal of content in a timely fashion.²²⁹ In appropriate cases, publication of an apology (as well as retraction statement) will likely prove prudent.

(i) Lobby Governments to progress and conclude

an international Convention harmonising internet law

Rome II’s failure regarding defamation²³⁰ emphasises that achieving international consensus in laws governing the internet will not be easy. Nevertheless, with Courts and commentators increasingly pleading for both domestic and multi-lateral action,²³¹ it may be that firms’ lobbying of legislators can stimulate faster progression of international

94, 572: “I would be surprised if [the Washington Post] were not insured for damages for libel or defamation anywhere in the world, and if it is not, then it should be”. See also, R Jery and M Mekel, “Coverage for Cyber-Risks: An Overview of Insurers’ Responses to the Perils of E-Commerce” (2002) 8 Conn.Ins. L.J. 7, 25.

²²⁸ Barrick, above n 9, [47] – [52].

^{229 Note Court’s comments to this effect in Bunt, above n 148 in the context of ISPs.}

²³⁰ See Section IV(E).

^{231 See, for example, Gutnick, above n 8 per Kirby J: “In default of ... international}

agreement, there are limits on the extent to which national courts can provide radical solutions”; M Fagan, “Regulating Speech Across Borders: Technology vs Values” (2003)

9 Mich. Telecomm.& Tech. L.Rev. 395, 448: “[the internet] requires international arrangements that transcend state borders and originate beyond independent state government processes”.

negotiations in this area. Indeed, all countries have a national interest in ensuring that the legal implications for firms engaging in e- commerce activity are as predictable as possible.

2. “Global highways”²³² & domestic laws: how to maximise litigation success if defamed by publishers abroad

(a) Evaluate chances of substantive success

^{& shop around for the most favourable forum}

Litigation is an expensive and often lengthy process. Hence, situations where vindication of reputation is the primary aim aside, once convinced a good cause of action in defamation exists, it is important to ensure both that the preferred forum selected for suit is willing to award an appropriate level of damages or order an injunction, and that the intended plaintiff is not “judgment proof”.²³³ As a general guide, permanent injunctions will rarely be granted for internet defamation in England and Wales.²³⁴ Canada, however, appears happy to order such relief and, in appropriate cases (e.g. those involving severe or malicious conduct), will even award punitive damages.²³⁵

(b) Consider enforceability of any judgment likely to be obtained

Whilst jurisdiction and choice of law issues in internet disputes are often intertwined, a judgment’s recognition and enforceability in a foreign forum is a separate matter²³⁶ and seldom straightforward.²³⁷

Importantly, as discussed above,²³⁸ judgments secured by a New Zealand firm in one EU Member State against a defendant domiciled in another are enforceable as a matter of right under Brussels I. Additionally, numerous Reciprocal Enforcement of Judgments Treaties

²³² E Clark and G Puig, “When Global Highways Intersect Local Laws: Defamation via the Internet – Dow Jones & Company Inc v Gutnick” [2002] HCA 56” (2001) 12 JLIS 271.

²³³ In the sense that assets are located offshore, is impecunious or likely to “disappear”/move operations to a different State: B Cooper, above n 217, 145 – 148; A Beyer, above n 212, para [15]; P Swire, above n 225, 1019.

^{234 Schwarzenegger, above n 123; Bunt, above n 148.}

²³⁵ Barrick, above n 7.

^{236 Although note that the Court in Braintech, above n 34, does appear to somewhat}

conflate these issues.

^{237 See, for example, significant obstacles encountered in LICRA, above n 51.}

²³⁸ See Part C, 5.

ensure that New Zealand-secured judgments are enforceable in most

Commonwealth and various other trade-important countries.²³⁹

Significantly, however, New Zealand currently has no Reciprocal Enforcement of Judgments Treaty with the United States. Consequently, unless a New Zealand/other foreign judgment can also be sustained under the First Amendment, it is unlikely to be enforced in the United States.²⁴⁰

(c) Insure against internet defamation-related loss

Although most insurance companies are unlikely to compensate on a mere allegation of damage to reputation,²⁴¹ insurers may provide relief where judgment is secured against a defendant whose assets are subsequently revealed to be out of reach or who is impecunious.

Conclusion

If all printers were determined not to print anything till they were sure it would offend nobody, there would be very little printed.²⁴²

The overwhelming need for harmonisation and clarity in international internet defamation laws cannot be understated.

Whilst praised for its heightened flexibility over strict application of traditional defamation law principles, Gutnick’s approach to jurisdiction and associated issues continues to be heavily criticised as “overbroad”.²⁴³ To date, however, an alternative satisfactory to the broader international community has not been advanced.²⁴⁴ In contrast to English and Canadian courts’ application of a “foreseeability” test,

²³⁹ See Reciprocal Enforcement of Judgments Act 1934, s 3 and relevant Regulations thereunder as to countries with which New Zealand has a Reciprocal Enforcement of Judgments Treaty.

^{240 LICRA, above n 51; Bachchan v India Abroad Publications Inc 585 NYS 2d 661, 665 (NY}

SupCt, 1992); Telnikoff v Matusevitch 702 A.2d 230 (Md, 1997). For additional discussion, see R Sack, Sack on Defamation: Libel, Slander and Related Problems (3rd ed, 1999) § 15.4; B Cooper, above n 217, 135 – 139; S Bone, above n 225, 294 – 297.

^{241 R Jery and M Mekel, above n 227.}

²⁴² B Franklin, An Apology for Printers (1973 reprint), 7.

^{243 See Section IV(A) above and note, for example, comments of N Garrett, “Dow Jones}

& Co v Gutnick: Will Australia’s Long Jurisdictional Reach Chill Internet Speech World- Wide?” (2004) 13 Pac.Rim L.& Pol’y J. 61, 88.

²⁴⁴ Note failed Rome II negotiations.

United States’ courts currently require defendants to specifically target a forum. Although certainly correct on its facts, Newlands²⁴⁵ has not significantly advanced New Zealand’s position.

Differing views on the proper free speech and protection of reputation balance and the extent to which the internet actually differs from traditional communications technologies are at the heart of States’ present failure to achieve consensus on a uniform approach for internet defamation disputes.²⁴⁶ Nevertheless, Brussels I does offer some hope of future resolution in that it demonstrates that countries are willing to compromise and achieve outcomes that fairly balance the interests of both plaintiffs and defendants. Likewise, the EU’s articulated commitment²⁴⁷ to achieving harmonisation of Member States’ internet laws as soon as is practicable is promising.²⁴⁸ In the interim, however, firms must continue to respond to the internet’s new and changing realities. Accordingly, it is suggested that firms would be sensible to take cognisance of the issues and recommendations identified in this article and to subsequently develop their own best practices and precedents specific to the nature of their online presence.

²⁴⁵ Above n 12.

^{246 Compare, for example, Courts’ views in Braintech, above n 34; Barrick, above n 7;}

Berezovsky, above n 124; Young, above n 160 and Gutnick, above n 8.

^{247 See Rome II, above n 186.}

²⁴⁸ Regarding the likely nature of any uniform standard, it is accepted that the sophistication of geo-location technologies will, undoubtedly, continue to develop. However, with the EU’s power-brokering role rapidly increasing and empirical evidence continuing to show that business-to-consumer sales growth in mature markets such as America is flattening, non-EU States may have little choice but to also adopt whatever jurisdictional test EU Members ultimately agree upon. For discussion of internet use evidence, see generally, R McGann, “Web Usage Growth Flatlines in US, Other Mature Markets”, available at: <http://www.clickz.com/3491501> last viewed 22 December

2008; Nielson Online, NetRatings Report on E-Commerce (2007), above n 4 and K Myktyn, “The Importance of the Law for E-Commerce Strategies” (2005) 22 Information Systems Management Journal 50.