We settled this case because Australian libel law chooses to favor powerful plaintiffs instead of the interests of the public and victims. Another reason we settled is because Australia’s federal police wouldn’t let me tell the court about their money laundering investigation, Operation Flange.
When I had called the federal police during my reporting, to ask about financial transactions I’d found in the U.S., they excitedly rushed to the States to question people— and give me this plaque.
But when we were later sued over whether an investigation existed, I honored my confidentiality promise and refrained from telling the court about the Operation Flange probe. So Dow Jones took a bullet from Australia’s crazy libel law, so that we could protect Australia’s cops.
with Brooke Gladstone and Bob Garfield
Alpert vs. Australia
May 2, 2003
What do you do when you’re sued for libel in a foreign country that favors plaintiffs? How about this: Sue that country for its media-unfriendly laws! That’s what Barron’s reporter Bill Alpert did after he was called into court for allegedly defaming an Australian businessman who read his story online. Alpert has filed a claim against Australia at the U.N. Commission for Human Rights, and he tells Bob why.
ALPERT v AUSTRALIA
COMMUNICATION SUBMITTED
FOR CONSIDERATION UNDER THE FIRST OPTIONAL PROTOCOL TO
THE INTERNATIONAL COVENANT ON CIVIL AND POLITICAL RIGHTS
Petitions Team
Office of the High Commissioner for Human Rights
United Nations Office at Geneva
1211 Geneva 10, Switzerland
Fax: + 41 22 917 9022
E-mail: tb-petitions@ohchr.org
TABLE OF CONTENTS
Paragraph
I. THE AUTHOR OF THE COMMUNICATION 1
II. THE VICTIM/ADMISSIBILITY/JURISDICTION 2
III. STATE CONCERNED/ARTICLES VIOLATED/DOMESTIC REMEDIES 8
IV. FACTS OF THE CLAIM
The complainant 18
The allegedly defamatory article 20
The Plaintiff 22
The process of publication 25
The nature of the internet 28
Distribution of “Unholy Gains” – US and Victoria 36
Response to the article 40
The proceedings 42
Differences between the defamation law
of the USA and Australia 44
V. DISCUSSION
The High Court decision 48
(i) Application only to unusual cases? 51
(ii) Confined to home-state reputations? 56
(iii) Difficulties in enforcement? 57
Public international law: the arguments 58
(i) Unfairness to Alpert 62
(ii) International law favours a US forum 64
(iii) Multiple publication rule a breach
of Article 19 67
(iv) Solution: sue under the operational law 69
VI. BREACH OF THE COMPLAINANT’S RIGHTS 71
VII. “JUSTIFICATIONS” FOR BREACH OF ARTICLE 19 RIGHT 78
“Provided for by law” 81
“Necessary to achieve a legitimate purpose” 87
UNHRC and ECHR jurisprudence 88
Less restrictive alternative: the proposed
publication rule 93
VIII. DEFECTS IN AUSTRALIAN DEFAMATION LAW 96
Burden of proof on media defendants 98
No “reasonable publication” defence 105
ALPERT v AUSTRALIA
COMMUNICATION SUBMITTED
FOR CONSIDERATION UNDER THE FIRST OPTIONAL PROTOCOL TO
THE INTERNATIONAL COVENANT ON CIVIL AND POLITICAL RIGHTS
Date: 15 April 2003
I. THE AUTHOR OF THE COMMUNICATION
1. This communication is made on behalf of William Alpert by Messrs Gilbert & Tobin, Australian lawyers, of Level 37/2 Park Street, Sydney NSW 2000 (Reference: Mr Paul Reidy, tel: 029263 4027; fax: 029263 4111). Gilbert & Tobin submit the communication as legal counsel for the victim.
II. THE VICTIM/ADMISSIBILITY/JURISDICTION
2. William Alpert is an American journalist, born in Highland Park, Illineis on 4 May 1956. His address is c/o Barron’s, 200 Liberty street, 16th floor, New York, NY 10281, USA.
3. As will appear, Mr Alpert is an American citizen and professional journalist, working for Barron’s, a magazine published by Dow Jones and Company Inc, a US corporation. In October 2000 he exercised his right of free expression to research, write and prepare for publication in that magazine an article entitled “Unholy Gains”, which referred to the activities of, amongst others, a Mr Joseph Gutnick. This article conformed with all laws and professional standards in the US, where it was published both in print and on an internet site, and where it has never been challenged legally or factually. He enjoys, under US constitutional law, a right to speak freely about persons such as Mr Gutnick as long as he does not write maliciously or at least negligently. His work cannot be the subject of defamation proceedings in the US unless he can be proved to be at fault. Other countries have very different defamation laws: in the Australian State of Victoria, for example, defamation is a tort of strict liability, and authors bear the burden of proving the truth of any allegations they make: they have no public interest defence other than to make reasonably sourced and believed criticisms of political or governmental figures, a defence that does not operate in relation to businessmen or corporate plaintiffs. They are liable to financial damages without limit, legal costs and injunctions.
4. Under defamation laws in all states of Australia, authors and publishers are jointly responsible for defamatory publications: they are described as “joint tortfeasors”. Usually both are sued, but if only one is subject to litigation he may compel the other to join the litigation as a co-defendant or may obtain a court order for the other to contribute to any damages awarded against him. It follows therefore from the decision that Dow Jones is amenable to Victorian jurisdiction in respect of Mr Alpert’s article, that Mr Alpert is similarly within the power of the Victorian courts. Throughout the litigation described below, Dow Jones has been acting on Mr Alpert’s behalf as well as its own. As the author of the article, it is his freedom of speech which is infringed by a ruling that, in effect, he must travel to Victoria to defend himself, from an attack brought under a local law which does not conform with Article 19.
5. Under Article 1 of the First Optional Protocol, only individuals may submit a communication complaining of rights violation. In this case, the publication which was the subject of Australian legal proceedings was authored by the victim but published by another. Nonetheless, the complaint is admissible. Article 19 enables the authors of publications, in which they express information and ideas, to do so through the media of their choice. If the chosen medium is unlawfully burdened by Australian law because of the victims’ expression, it is as much a violation of the right of the victim as it is a burden on the corporate owner of the communications vehicle. Journalism is generally practised by publication in media controlled by corporate entities, which are artificial legal persons and hence not beneficiaries of the rights guaranteed by the ICCPR. The fact that the exhaustion of domestic remedies has been left to the publisher, rather than the author is an artefact of the municipal legal processes of the State concerned: what in substance has occurred is a vigorous attack upon the author’s communication through the vehicle provided by the publisher. Article 19’s guarantees are not to be trivialised or subverted by arguments concerning the intervention of the corporate form when the Article itself guarantees the right to the author to choose his mode of communication. An attack on the communicator for publishing the author is an attack on the author’s right to choose, as much as on his right to speak through his chosen means, both rights being guaranteed by Article 19.
6. In the context of an Article 19 violation, there is no difficulty in applying the territorial and jurisdictional limits in Article 2(1) of the ICCPR. Article 19 applies “regardless of frontiers”, and expressly protects trans-border communications, and hence authors resident outside the jurisdiction but publishing within it. The territorial requirement is met by Alpert’s publication in Australia, and its actual liability to suit there.
7. Mr Alpert is in consequence an individual who is a victim of a violation of his rights by the State of Australia (Option Protocol, Article 1). He has been declared, by the High Court, to be subject to its jurisdiction for no other reason than that his article is available on the internet and may be downloaded in the territory of Victoria, which territory he must enter in order to defend it (and may be compelled to enter if sued individually or joined in the action). It follows that he is an individual whose rights the State of Australia has undertaken, pursuant to Article 2(1) of the Covenant, to protect.
III. STATE CONCERNED/ARTICLES VIOLATED/DOMESTIC REMEDIES
8. The state party to the International Covenant and the Option Protocol against which this communication is directed is Australia. It is alleged that Article 19 of the International Covenant on Civil and Political Rights is directly violated, and the nature of the violation is discussed in greater detail in Section V below. Article 14(1) is also violated, and Articles 2(1) and 17 are relevant to this application.
Steps taken by or on behalf of the alleged victim to exhaust domestic remedies
9. On 27 November 2000 a Mr Joseph Gutnick commenced defamation proceedings by writ in the Supreme Court of Victoria against Dow Jones & Company Inc on the basis of an article written by the victim/complainant, Mr William Alpert. He wrote his article for Barron’s, a news magazine about American financial markets with 97% of its print run distributed in the USA. The article had been placed on the website “WSJ.com” located in New Jersey, USA. The Gutnick claim, made publicly but under the absolute privilege accorded to court proceedings, accused Mr Alpert of dishonest and malicious journalism.
10. Dow Jones, proprietor of Barron’s and Mr Alpert’s employer, was served with the original proceedings in the United States, where it is established and domiciled. The corporation, at all times with Mr Alpert’s approval and on his behalf, entered a conditional appearance and applied to the Supreme Court of Victoria to have the service of the writ and statement of claim set aside or, alternatively, to have the action permanently stayed on the basis that the Court had no jurisdiction to hear the matter, or alternatively that it should decline to exercise its jurisdiction for the following reasons:
a) The publication was effected in New Jersey and not in Victoria;
b) Neither Mr Alpert nor Dow Jones committed any act in Victoria to justify service of Victorian proceedings outside Victoria; and
c) Victoria was not a “convenient forum” for the adjudication of this claim.
11. On 28 August 2001 the Supreme Court of Victoria dismissed this interim application. (A copy of the judgment in the matter of Gutnick v Dow Jones & Company Inc [2001] VCS 305 is attached marked Appendix A).
12. Dow Jones thereafter applied for leave to appeal to the Court of Appeal of the Supreme Court of Victoria, which also dismissed the application in a judgment on 21 September 2001. (A copy of the judgment in the matter of Dow Jones & Company Inc v Gutnick [2001] VSCA 249 is attached marked Appendix B.)
13. The decisions were appealed to the High Court of Australia, the leave of that court being granted on 12 December 2001. This Australian court of final appeal delivered its judgment on 10 December 2002. (A copy of the judgment in the matter of Dow Jones & Company Inc v Gutnick (2002) 77 ALJR 255 is attached marked Appendix C.) The application was dismissed and it was held that the proceedings in the Supreme Court of Victoria should be neither stayed nor set aside because they were lawful under Victorian common law and procedure.
14. It is this final and unappealable rejection of the applications brought by Dow Jones, and the assertion of Australian jurisdiction and Australian legal hegemony over Mr Alpert’s act of writing for the publication in question, that constitutes the violation of Covenant rights.
15. The issues were finally and conclusively decided when the High Court of Australia, as the highest court under section 71 of the Commonwealth of Australia Constitution Act, dismissed the appeal against the refusal of the application to have the service of the writ and statement of claim set aside or to have the action permanently stayed. No further domestic remedies are therefore available to the complainant. The High Court has conclusively decided that the Victorian court had jurisdiction to try the matter, that Victorian law would apply at the trial and that Victoria was an appropriate place for that trial.
16. The consequence of this final decision is that the right guaranteed to Mr Alpert by Article 19, namely the freedom to impart information and ideas of all kinds, regardless of frontiers and through any media, is subject to this restriction, namely that although lawful at the time and in the place of writing and publication, his expression, when placed on the Internet, may be indicted and penalised by laws in other countries, with which he has no connection. His internet expression thereby becomes subject not to restrictions “provided by law”, but to restrictions provided by hundreds of different national laws of defamation. These operate in the great majority of the 191 states of the world (many of them, like Australia, federations containing a number of states with different local laws). Many of these laws and, specifically, Victorian defamation law (see below) contain restrictions which themselves breach Article 19 because they are unnecessary for the legitimate aim of respecting the reputations of others. The High Court decision has the result, unappealable in Australian domestic law, that Mr Alpert must defend his article, lawful when written and published in the US, by travelling to Australia and being subjected to an alien legal and curial process which does not respect freedom of expression.
17. For the purposes of Option Protocol Article 2 and Article 5(2)(a) and (b), there can be no doubt:
(a) that this dispute is not and cannot be examined under any other procedure of international investigation and settlement;
(b) Mr Alpert has, through the agency of Dow Jones, exhausted all available domestic remedies.
IV. FACTS OF THE CLAIM
A. THE FACTS
The complainant
18. Mr Alpert is an American citizen who lives with his family in New Jersey. He is a qualified and experienced investigative journalist and is a senior editor of Barron’s magazine, a weekly publication that focuses exclusively on US financial markets and related investment and securities issues, and is printed and published by Dow Jones & Company Inc (“Dow Jones”). His C.V. is set out at Appendix D: it establishes him as a highly skilled and respected expert, communicating on matters relevant to US stock markets and international financial matters.
19. Dow Jones is a Delaware Corporation with its business headquarters at 200 Liberty Street, New York City. There, its American editors, reporters, copy-editors, researchers and executives produce Barron’s magazine, which is regularly uploaded on Dow Jones web servers located across the Hudson river in New Jersey where it is made available to subscribers to WSJ.com. The edition of Barron’s magazine for 30 October 2000 sold 305,563 copies, 296,500 of them (97%) in the US and only fourteen in Australia. WSJ.com had at the time 535,000 subscribers, the great majority of whom are American. About 1700 subscribers appear to live or at some point to have lived, in Australia, several hundred of them in Victoria.
The allegedly defamatory article
20. Mr Alpert spent several years researching (i.e. seeking and receiving information about) the use and exploitation of religious charities in various forms of financial chicanery. This was a matter of interest and importance to US investors and regulators. He exercised his right to freedom of expression within the legal and ethical restrictions of US law and best professional practice and then wrote an article in October 2000 entitled “Unholy Gains – When stock promoters cross paths with religious charities, investors had best be on guard”.
21. This article, of about seven thousand words (Appendix E), was on any view a major piece of investigative journalism. It detailed how religious charities were capable of exploitation, and it set out Mr Alpert’s reasons for believing that one stock promoter, Mr Joseph Gutnick, made “unholy gains” for himself and his favoured charities. In the course of the article, which dealt mainly with Mr Gutnick’s business behaviour in American and with American charities, Mr Alpert made reference to Mr Gutnick’s alleged connections with a man named Nachum Goldberg, convicted in Victoria for laundering money through a bogus charity.
The Plaintiff
22. Mr Gutnick is an international entrepreneur domiciled in Victoria, where much of his social, and some of his business, life can be said to be centred. He is known in Australia through his chairmanship and ownership of associated companies, mainly in the mining industry. He conducts a great deal of business outside Australia, mainly in the United States. The first paragraph of “Unholy Gains” referred to the fact that Mr Gutnick was promoting a hedge fund with Chase Manhattan Bank and that he had just announced that he was moving half his business interests to the United States. He has had a significant financial presence in the US since 1988, as a director of US companies and as chairman and CEO of a New York corporation, Bay Resources, which is listed on the NASDAQ Stock Exchange in New York. He also promotes his Australian companies at US “road shows”, public appearances in the US in which he urges US investors to buy his stocks, which are traded in the US as American Depository Receipts (ADRs).
23. Mr Gutnick has other close ties with the United States: he studied for four years in Brooklyn, he has a house in New York, he is an official (Special Emissary to Israel) of a New York-based religious movement, for extended periods he has taken out weekly advertisements on the front page of the New York Times, and he advises charities in New York (Colel Chabad) and California (Chabad of the Marina). Mr Gutnick also has close, controversial and widely publicised political connections with Israel, and operates a high profile company in the island state of Tuvalu.
24. Well before the publication of the article –- on 12 August 2000 and again on 20 September 2000 – Mr Alpert contacted Mr Gutnick to tell him that he would be featured in a proposed story in Barron’s. Mr Alpert requested an interview, setting out very clearly for Mr Gutnick the statements that might be made about him, to which he invited Mr Gutnick to respond. (Mr Gutnick, however, on both occasions declined to be interviewed or to make any comment at all to Mr Alpert.) This is an example of the responsible and professional behaviour of the journalist complainant, a matter of great, and often dispositive, significance under US law, but of no relevance at all to defamation liability in Victoria.
The process of publication
25. Mr Alpert completed the writing of his article in October 2000. Both he and his employers were satisfied that it did not infringe US law and could not give rise to a successful defamation claim in any US state. They were willing to face a defamation action in any state of the union, although they regarded their operation as centred, for legal purposes, in the contiguous states of New York (where the magazine was edited) and New Jersey, where the website is situated and the article had been uploaded.
26. Barron’s Magazine goes to press every Friday evening for Saturday morning distribution in the US, after being edited and proof-read at the offices in Liberty Street, New York. That same evening, all the edited articles are sent via an internal system to the editors of the WSJ.com website, who were then based in the same building (and are now in a building only a few blocks away.) They are responsible for inserting headlines and hyperlinks and for making up the web pages for WSJ.com.
27. The material is thereafter sent over a dedicated computer link from Liberty Street to a receiving computer on Dow Jones corporate campus in South Brunswick, New Jersey. There, Barron’s Online is placed on six servers which “upload” the material onto the World Wide Web in order to make it accessible to users, wherever they may be located, via Internet Service Providers (ISPs).
The nature of the Internet
28. The Internet can be described as a set of interconnections among computers all over the world which enables these computers to exchange messages. Using this infrastructure, businesses and individuals can communicate with one another, and they can access information. By 2000, there were over ten million web sites available to an estimated 540 million Internet users. It is a unique telecommunications system defying analogy with pre-existing technology. Its relevant features are appropriately summarised in the High Court decision of Kirby J, in Appendix C at paras 78-92.
29. The World Wide Web is a particular service available over the Internet. It enables personal computer (“PC”) users in any and every jurisdiction in the world to search for and obtain information in documents which have been uploaded. The process of uploading involves placing information in a data-storage area managed by a web-server. Once material is uploaded on a web-server, it can potentially be “downloaded” via the Internet all over the world.
30. PC users make use of the Internet by agreement with an Internet service provider (“ISP”) not necessarily located near the user, or in the same jurisdiction. The PC user sends an electronic request, known as a “get message”, to the ISP, which will forward it, by a fortuitous and usually circuitous route, to the server at its particular location. In this process the PC user is assigned an IP address, which does not necessarily indicate the user’s location. This operation is initiated by the PC user, who enters the server’s address into his browser and sends a “get message” to that address. The “get message” causes the server to retrieve the desired page and make a copy of it. The “get message” then brings the copyback to the user’s computer, in bursts of electronic data, which are then reassembled by the user’s computer and displayed as text on the PC screen.
31. In effect, the Barron’s article was available for anyone, anywhere in the world, to obtain if they had a PC, once it was placed on the six Dow Jones web servers in New Jersey. However, it is important to understand that it is the action of the searcher, not the website publisher, which initiates every actual, specific publication by “pulling” the information from the server. In this crucial respect, the Web is revolutionary, because it serves (like a massive home library) as a repository of vast amounts of information and knowledge, accessible according to the searcher’s requirements and not subject to the wishes or initiative of the website owner. The server is passive, apolitical and non-judgmental, like a professional librarian: other than checking subscriber ID and any associated password, it automatically divulges the knowledge that is sought, without discrimination in relation to age, ethnicity, nationality or in any other respect.
32. It is this central role in the dissemination of knowledge that has made the Internet so important as a tool for enhancing the fundamental right guaranteed by Article 19. The searcher who wishes to obtain information on a topic is not confined to a single and perhaps partisan service, but is provided with almost instant access to every source. What is revolutionary is: (1) the immediacy of the access (which in respect of news is a fundamental advance over days of delay in sending newspapers and magazines to places around the world, and the usual delay in searching for particular information by scouring radio or TV broadcasts); and (2) the breadth of the access. This permits the searcher to make better judgments (after assembling all sources and in effect hearing all sides) or to come to a greater understanding of the subject which is being researched.
33. The Web is revolutionary, in a scientific sense, as an electronic communication, by virtue of its “pull” technology. Unlike broadcasting (even by satellite), the information is not transmitted (i.e. “pushed”) across a band or over a path such that viewers or listeners within that path may see or hear it at the flick of a switch. Uploading makes it available everywhere in the world, but only comprehended by persons sending electronic “get messages” from their own computers to the site of the server to “pull” the article off the server and then take it back to the personal computer which renders it comprehensible on the screen. Information is not “pushed” into any particular jurisdiction by the owner of the server. Information from the website is acquired by choice of the PC user and by dint of that user’s technology, and in the exercise of the user’s Article 19 freedom to receive informaton and ideas. In this respect, the Web differs from e-mail, which is “pushed” to recipients.
34. Once material is uploaded on a web-server, the website owner, whether the site is open or subscription based, cannot prevent a particular document being downloaded in any particular jurisdiction, although it could erect an electronic barrier, or “firewall” which would operate to block normal access by subscribers, e.g. in Australia. (In the Yahoo! case in 1999, experts thought that such a wall would work to block access in 70% of cases, although its efficacy today is thought to be much less.)
35. But such firewall would:
(a) Require the collection of personal data, possibly contrary to privacy laws (see e.g. Schedule 1, Clause 3 of the Data Protection Act 1998 (UK); Article 6(1) of the EC Directive 95/46/EC of the European Parliament and Council, 24 October 1995);
(b) Block more access than necessary (e.g. a firewall against Victorian access would block some access from other Australian States and Territories);
(c) Need, in order to be effective, to exclude all Australian access and not just Victorian users (if they could be identified);
(d) Be, in itself and for reasons (b) and (c) above, an unnecessary restriction on the Article 19 rights of those who wished to receive the information
Distribution of the print publication
36. “Unholy Gains” appeared in the edition of Barron’s magazine for Monday 30 October 2000, available on newsstands in America on the Saturday 28 October 2000. This edition of Barron’s magazine sold 305 563 copies, of which 296, 560 copies were distributed within the United States. Only 14 copies were dispatched to subscribers in Australia. Dow Jones did not license or send any copies for newsstand sales in Australia, although six copies were procured by individuals in Victoria through unconnected news agencies.
37. On Saturday 28 October 2000, the article was also published on Barron’s Online as part of WSJ.com, which operates as a subscription news site and on which the text and pictures of the print edition are reproduced. At the time, WSJ.com was (it still is) the largest subscription news site on the World Wide Web, with over 535 000 paid subscribers. Although it cannot be conclusively established where all the subscribers reside, about 1 700 subscribers paid by way of credit cards that were issued in Australia. Dow Jones stipulated for the purposes of the Australian proceedings that several hundred of these resided in Victoria, and that a number of those residents with interests in business and finance, downloaded “Unholy Gains”. (In the Australian Courts, Mr Gutnick provided proof of two such instances of downloading in Victoria.) It might similarly be inferred that there were a number of downloadings in many other countries in the world apart from the USA, although that was the country from which the great majority of “hits” on the article emanated.
38. Barron’s Online and the article “Unholy Gains” had not been advertised or promoted in Australia, either by Mr Alpert or Dow Jones. Mr Alpert has not visited Australia, or been quoted in the Australian media speaking about the article, or taken any action to publicise it in Australia. His concern was and remains to tell US investors about the record of stocks associated with Mr Gutnick.
39. Although the site operates on the basis of subscription, access can be obtained free of charge by any searcher who goes through a simple “trial subscriber” process. All subscribers and trial subscribers who access the site agree to be bound by a contract specifically governed by the laws of the USA and New York, and agree that any legal disputes arising from the subscription would be settled in courts located in the State of New York.
Response to the article
40. Mr Gutnick responded immediately after publication through his New York/New Jersey lawyers, Phillips Nizer Benjamin Krim & Ballen. On 30 October 2000 they wrote to Barron’s (Appendix G) complaining that “Unholy Gains” defamed Mr Gutnick and that
“The world-wide dissemination of these accusations substantially increases the damage to Mr Gutnick, and increases your responsibility under the laws of many nations.”
41. The Associate General Counsel for Dow Jones, Mr Stuart Karle, replied to Mr Gutnick’s lawyers the following day (Appendix H), inviting them to identify the statements in the article which were false and added that “[o]f course Barron’s will correct any factual errors promptly”. The journal was also willing to publish a response from Mr Gutnick to the article. Mr Karle’s letter to the American law firm went unanswered. Instead, Mr Gutnick filed his writ and statement of claim in the Supreme Court of Victoria less than a month later on 27 November 2000.
The proceedings
42. He claimed that Dow Jones published the article (and, by implication, that Mr Alpert wrote it) “without any honest belief in the truth of the imputations alleged alternatively, recklessly, not caring whether the imputations were true or false.” His claim sought aggravated and punitive damages, but only in respect of the publication “to all persons in Victoria connected to the Internet who could and/ or did obtain access to the article”. Because Mr Gutnick limited his allegation to publications in Victoria, and gave an undertaking that he would not sue elsewhere, the Australian courts decided that he was entitled to sue in Victoria and have Victorian law apply to his case. (Had he attempted to sue in Victoria for publication in America as well, this might have introduced American law into the Victorian proceedings (majority judgment, paras 51-2).
43. What all judges of the High Court failed to comprehend is that the “limitation” of a libel action to publications and persons within the jurisdiction is artificial: it is a device used by plaintiffs to ensure home state trial under home state law. The fact that suit has been brought on Victorian rather than worldwide publication makes no difference at all to the length of the trial, or to the defendant’s legal costs, travel and accommodation expenses etc which will run into millions of dollars and will be partly irrecoverable, even if the defendant succeeds. It may, notionally, affect the level of damages, but in a way which cannot be sensibly quantified (how much more would a plaintiff obtain for damage to his American reputation, on top of damage to his Australian reputation?) Since damages are unlimited, the ploy of “limiting” the action to local publication does not relieve the defendant of any significant liability: home state juries will award heavy damages in any event, even when told that they cannot compensate the plaintiff for damage to his overseas reputation. And the undertaking not to sue in America is not beneficial to the defendant at all: it simply denies him the forum where he wishes to defend his action and where he is certain of victory because he has carefully and intentionally complied with its law.
Differences between the defamation law of the USA and Australia
44. There are significant differences between the law of defamation in Victoria which comprises the English common law substantially unamended by statute since the time of Queen Victoria, and the USA, by virtue of the First Amendment to the US Constitution.
(a) In the US, the plaintiff bears the burden of proving falsity of the imputation about which he complains; In Victoria, this crucial burden is reversed and lies heavily upon the media defendant. (See Philadelphia Newspapers Inc v Hepps 475 US 767 (1986); Bachchan v India Abroad Publications 585 NYS 2d 661 (1992); Telnikoff v Mausevitch 702 A2d 230 (1997) (Regarding non-recognition of English libel judgments on this basis); Gatley on Libel (Appendix G)).
(b) If a “public figure” in the US, the plaintiff must prove “actual malice”, i.e. that the defendant published recklessly, with knowledge of, or reckless indifference to, falsity; Victoria has no such defence. (Id; See New York Times v Sullivan 376 US 254 (1964)).
(c) Private plaintiffs need prove only falsity and fault (i.e. that the defendant published negligently), but if they claim punitive damages or (in some states) if the matter is of public concern, they must establish actual malice. In Victoria, defamation is a tort of strict liability and no fault at all need be proved by the plaintiff, other than in a limited class of case where allegations are made about the performance of politicians (Gertz v Robert Welch Inc 418 US 323 (1974); Lange v Australian Broadcasting Corporation (1997) 189 CLR 520).
45. In addition:
(a) US law treats the publication of multiple copies of a defamatory article in multiple jurisdictions as one single publication, giving rise to one “global” tort action in which comprehensive damages may be recovered. Victorian common law, like English law, regards every separate publication as giving rise to a new cause of action. (See Berezovsky [2000] 2 All ER 986 (in which the common law “multiple publication” rule derived from the Duke of Brunswick case prevented development of a “global tort” theory; Loutchansky (No 2) [2001] 3 WLR 404).
(b) US law, unlike Victorian law, has a defence of substantial truth, entitling a defendant to justify, or prove the truth of, the “sting” of the libel. (Masson v New Yorker Magazine 501 US 496 (1990) 516-7; David Syme v Hore Lacy (2000) 1 VR 667 (constrains the pleading of a “Polly Peck” or “common sting” defence”).
(c) US legal procedures such as pre-trial depositions and more onerous discovery obligations (which may establish issues of truth or journalistic responsibility conclusively and at an early stage) are unavailable under Victorian law.
46. It is natural that the defamation laws of different countries will develop in different ways, or (in the case of Victoria) hardly develop at all. What the State of Australia guaranteed to all in (or dragged into) its jurisdiction is that they should not be exposed – whether by trial or penalty – to a state law which does not conform with Article 19. The cumulative effect of the pro-plaintiff distinctions identified in paras 27-28 above makes trial under Victorian law a breach of Article 19, irrespective of the eventual outcome of the trial itself. There can therefore be no scope for adjourning this case until trial proceedings and appeals are over: the violation of the complainant’s right is complete by the High Court decision that his work must be tried in Victoria. The outcome of any such trial is irrelevant to the fact that his rights have been violated by a decision that he is within the court’s jurisdiction and by subjecting him to legal proceedings that do not conform with Article 19.
47. The Supreme Court itself accepted “the costs and the inconvenience of bringing witnesses and evidence to Australia” (Appendix A, at para 128). This cost, and certainly much of the inconvenience, will fall upon Mr Alpert, whose attendance in Australia for a considerable period will be necessary, and who will be obliged to undergo extensive cross-examination. He is clearly, and has been since the High Court decision, a victim.
V. DISCUSSION
THE HIGH COURT DECISION
48. The High Court decided the three issues before it – jurisdiction, choice of law and choice of forum – all in favour of Victoria. It did so by surgical application of English common law rules, received in Victoria when that state was a colony and scarcely altered since. Although these rules were adopted with some expression of regret (see paras 25 & 51), the High Court’s approach to precedent meant that their very antiquity was the reason for their entrenchment in the common law, irrespective of the advent of the internet and globalisation. They cannot be extirpated from the law of Australia other than by treaty (such as the ICCPR) or by a statutory change which the parliament of Victoria has never been prepared to contemplate.
49. The High Court simply adopted the approach laid down for English law in 1849, in the Duke of Brunswick’s Case, namely that every publication of a libel provides a separate and distinct cause of action (the so-called “multiple publication rule”). Since a publication takes place wherever and whenever a libel is comprehended, it follows that every “hit” on an internet site is a separate publication, giving a cause of action in defamation in the courts of any and every state where the libel is downloaded. This means that every state in the world has jurisdiction over internet authors and publishers, and may – on the pretext of one internet hit – take criminal or civil jurisdiction to try them and punish or penalise them.
50. The High Court claims in its judgment that there are three limits to the “chilling effect” of this decision.
(i) Application only to unusual cases?
51. Expression on the internet, under this decision, is not “free”; it is vulnerable to attack, irrespective of its legality in the place where it was written and stored on the website, under “the defamation laws of every country from Afghanistan to Zimbabwe”, whether or not such laws comply with Article 19. The majority decision was insouciant about this prospect, claiming that “in all except the most unusual of cases, identifying the person about whom the material is to be published will readily identify the defamation law to which that person may resort”. But this is nonsense, because there is no rule that restricts plaintiffs in any way from suing anywhere they wish. Indeed, in Gaddafi v Sunday Telegraph Group[1] the English High Court held that Colonel Gaddafi’s son, unheard of in England before the defamatory article appeared, could sue even though he had no reputation in England: he had one as soon as the article was published! Mr Gutnick had property and reputation in six states of Australia with different defamation laws, and in all states of the USA. As a result of globalisation, there are hundreds of thousands – if not millions – of international public figures with reputations and relationships in more than one country. These include businessmen, lawyers, bankers, accountants and financial operators of all kinds; diplomats, politicians, journalists, sporting figures, actors, soldiers, aid workers, NGO executives, mafia leaders, money launderers, crime bosses etc. Many corporations have facilities, employees and reputations in quite literally dozens of countries around the world. The High Court decision as a generally applicable rule of law in Australia (and doubtless for the 56 other countries of the Commonwealth influenced by Australian jurisprudence) chills free speech because it gives this very wealthy class of protected plaintiffs an opportunity to select the forum in which they perceive they can most easily harass the author or journalist who publishes facts they would rather have hidden or criticisms they cannot abide.
52. Defamation actions, in Australia or elsewhere, are expensive and do not attract legal aid: they are essentially litigation for wealthy plaintiffs. The class of potential plaintiff identified above – the new “international public figures” thrown up by globalisation – contain many people of great wealth whose conduct is deserving of closest scrutiny. Moving as they do between countries and markets and bank accounts, they may avoid most media attention if there is cause to suspect that they are (for example) drug dealers, confidence tricksters or financiers of terrorism or makers of dangerous products or persons engaged in any form of trans-border criminality or undesirable behaviour. It is important that investigative journalism should be under no unnecessary inhibition in exposing them. Such inhibition is undoubtedly created by the chilling effect of the decision in Gutnick, whereby people of this class may choose the country with the most plaintiff-friendly libel law in which to sue, by virtue of a few (or even one) internet hit in that country.
53. It must also be remembered that under Victorian and indeed English law which is common in the fifty-seven countries of the British Commonwealth, a “defamation” is defined merely as a statement about a person that lowers his reputation in the estimation of right-thinking people, or subjects him to social embarrassment or ridicule. It is, in other words, no more than a criticism – or imputation which may be thought critical – which provides the cause of action. So the writings upon which these international public figures may sue are many and various – any coverage of their business affairs or social life or professional activity from which some critical inference may be drawn.
54. It is also important to note (in light of Callinan J’s tendentious comments about “profits” at para 182) that corporate media organisations are necessary for the global dissemination of news, and can only survive by making some profit. They are, nonetheless, bound by ethical duties to support journalists who discover and seek to publish newsworthy facts. But that ethic is constrained by legal advice: the very need to trade profitably means that stories likely to attract expensive libel actions will be censored, irrespective of whether they are believed to be true or even known to be true (if the means of proving truth may be forensically problematic). This is the case with media corporations: it is much more the case for publishers of private websites, whose freedom of speech is chilled because they cannot afford to defend a libel action in any foreign country where they have assets.
55. For these reasons, the conclusion of the High Court majority at para 54 is naive in the extreme: critical imputations which persons with the expertise of William Alpert wish to make about international figures will on legal advice be edited out, or sometimes simply not published, because they may entail heavy financial liability in a country with plaintiff-friendly defamation laws, even if the stories are “fireproof” under the defamation laws of their authors’ domicile and their place of primary publication.
(ii) Confined to home state reputations?
56. The two other considerations thought by the High Court majority “to limit the scale of the problem confronting (as a result of its judgment) those who would make information available on the World Wide Web” (see paras 53-4) are also mistaken. The notion that defamation claims can only be brought in countries where plaintiffs have reputations is (a) incorrect – see Gaddafi (above) for the English position and note that a pre-existing reputation is not a prerequisite for action in most European countries, including France and Germany, and (b) ignores the reality of globalisation, namely that millions of people now have “reputations” – i.e. are known in or connected with more than one country, while hundreds of thousands of these international figures have reputations in several – often, many – countries. (See Appendix F for one post-Gutnick example, namely the decision of Richard Perle, a powerful political figure in Washington, deciding to sue the “New Yorker” and its New York-based journalist, not in New York but in London, where the magazine is available on the internet. (There are many political, business and military figures who, like Perle, can claim reputations in all world capitals)).
(iii) Difficulties in enforcement?
57. The High Court majority further attempts to comfort internet publishers by opining that in practice plaintiffs are unlikely to sue other than in countries where the defendant has assets or where court judgments will be enforced. But this cynical attitude is unjustified:
(i) Plaintiffs often take libel actions as public relations exercises, to “vindicate” their reputation irrespective of whether the defendant shows up or pays up.
(ii) Responsible international media defendants, both corporations and journalists, may have ethics which require them to defend their work wherever it is attacked, whether they have assets in that place or not.
(iii) Most international public figure plaintiffs are so wealthy they may not care about damages at all: they may bring actions to harass their critics or to signal publicly their preparedness to “vindicate” their reputation.
(iv) Corporate media defendants usually have “assets” in countries throughout the world from which they provide news coverage.
(v) On principle, a bad legal rule should not be defended on the ground that it may not be capable of effective enforcement.
Public international law: the arguments
58. Gutnick was a private international law case, in which the decision was driven not by any conflicts of law doctrine but by the dictates of domestic defamation law, notably the multiple publication rule. The Human Rights Committee is not constrained to adopt this approach, which has produced such unacceptable results: it can and should take an international law approach (i.e. assess the respective interests of the states of Australia and America in adjudicating the dispute) as refined by international human rights law, which favours the solution which has the least “chilling effect” on speech.
59. The USA has an overwhelming interest and duty to adjudicate the dispute, or at least to have the dispute adjudicated according to US law. Dow Jones is an American company, Mr Alpert an American citizen. Barron’s is established and written and edited in New York; WSJ.com has its offices and webservers across the Hudson in New Jersey. Mr Alpert and Dow Jones offered to accept service and to raise no technical defence to a Gutnick suit in either place in the US, the country where Mr Alpert, pursuant to American law and professional journalistic standards, researched, wrote and edited the article. The focus of the article was American stock regulation: Barron’s is published by and for Americans (97% of the print run is established there and the reason for reading the publication is to take financial positions in securities listed and offered in the US). Only a fraction of its internet subscribers give addresses in Victoria, and they all agree to have any disputes governed by US and New York law in New York courts. Dow Jones operates and insures its news business under US laws and professional standards; Alpert is bound by his employment and ethics to compose the information in his stories by reference to what those laws and standards prescribe or permit, in accordance with (inter alia) the constitutional rights which he as author and (correlatively) his American readers, enjoy. All internet liability insurance, privacy policies, subscription agreements etc are arranged in the expectation that disputes will be submitted to adjudication in the United States. The author and publisher had done nothing to undermine their entitlement to be tried in the US.
60. Australia’s interest in the dispute derives only from the fact that the Plaintiff is an Australian citizen, domiciled in Victoria, his family residence, where he is known through local charitable, religious and sporting connections. The interest in Victorian adjudication is, however, attenuated by the fact that “Unholy Gains” concerned in substance the Plaintiff as a person with US connections and US-based activities such as promoting and selling his stocks. The Plaintiff attracted Mr Alpert’s attention not because he was a Victorian businessman/resident but because he was an international entrepreneur moving his business to America, taking his reputation with him on every visit he made to encourage Americans to fund his enterprises.
61. The High Court was not faced with a stark choice between a forum convenient to a Plaintiff whose business and reputation was confined to Victoria and a forum convenient to a defendant whose constitutionally protected communications were directed to Americans. The information Mr Alpert published in the US could be (and was in fact) sought out by some interested individuals in Victoria. This was the result of Dow Jones making that information available on its American website. But Dow Jones had no corporate presence in Victoria and had taken no step to market “Barron’s Online” or promote the article in Victoria, and nor had Mr Alpert. The activity which directly caused “Unholy Gains” to enter the state was that of third parties who brought it in by taking active steps to search for it. The Plaintiff, by contradistinction, had a long history of presence in New York and of business operations there. He had been actively and personally promoting his stocks in the US to investors there, competing for their money in the American marketplace. Most significantly, as the article correctly reported, he had announced that he was moving up to half his business to America to benefit from the strength of the US dollar – in effect, to make money in America, from Americans.
CONCLUSIONS
(i) Unfairness to Mr Alpert
62. Against that background, the Plaintiff’s connections with the US were of a much closer, and more relevant, kind than the Alpert/Dow Jones passive connections with Victoria. A Victorian resident who voluntarily and publicly sets out to make money in America by doing business in America must expect that he will be subjected to lawful scrutiny by the American business media, operating under the law of the US constitution: there can be no injustice to him in submitting his claim that they have defamed him to the courts of that country. There is, however, real injustice in depriving the author of the constitutional protection and juridical advantages of the legal system under which he has prepared and published the article.
63. Mr Alpert suffers oppression and injustice in being forced into a Victorian forum applying Victorian defamation law, precisely because he had prepared and published the article according to US law and good professional practice (taking care, for example, to avoid negligence, obtaining sufficient facts and sources so that he honestly and reasonably believed the defamatory allegations and had put them to the Plaintiff well before publication, and accepting Dow Jones’ policy of offering factual corrections and a “right of reply”). But these precautions offer little or no comfort under Victorian law. Recent English and New Zealand extensions in the common law of qualified privilege (by Reynolds v Time Newspapers[2] and Lange v Atkinson)[3], to provide a public interest defence for responsible investigative journalism, have been held not to apply in Australia.[4] Most importantly, the US constitutional protection which requires Plaintiffs to establish falsity is reversed in Victorian defamation law, which also lacks the defence of substantial truth and the US procedural devices (such as pre-trial depositions) for elucidating it at an early stage. The US constitutional requirement that fault must be found with an act of the defendant (actual malice, or negligence) is not reflected in Victorian defamation law, other than in a narrow privilege for discussion of political or government matters, which the Victorian courts have already held is unavailable in this case.[5]
(ii) International law approach
64. The law of defamation is the means by which the law strikes a balance between the individual right to reputation and the public right to communicate and receive information. In the context of global dissemination of information by a technology which has no clear or close comparison with any other, a publication rule which does not expose publishers to liability in every jurisdiction, or at least in multiple jurisdictions, but which nonetheless provides plaintiffs with access to a court which can compensate them for all damage suffered, strikes the most acceptable balance.
65. Such a balance would be provided by a rule which locates the act of publication in the place where the article was substantially prepared for downloading (assuming such place to have effective defamation laws) rather than in any place where it is downloaded by computer users (unless the publisher has, by its conduct in that place, instigated the downloading). This approach caters for the interest of the publisher’s state in protecting its media from exposure to foreign libel judgments repugnant to its own constitutional standards, unless that media has, by its conduct in the foreign state, waived any such protection and provided that foreign state with a clear interest in assuming the power to adjudicate a claim against it, at least if that claim is brought by one of its own citizens.[6]
66. The balance between the two distinct state (or governmental) interests engaged in defamation, the interest in protecting free speech rights of its speakers and their audience and the interest in protecting the reputational rights of its victims, is struck by defamation laws which are markedly different (even between countries which have inherited the English common law). Cases such as Gutnick, where the speaker operates in one law area and the victim resides in another, invite public international law assessment of the strength of the competing governmental interest in the circumstances of the case. That is to say, whether the home-state interest in protecting reputation has been attenuated by the plaintiff developing an international reputation (particularly, a reputation in the speaker’s state), and conversely whether the foreign state’s interest in protecting its speaker’s rights has been reduced by virtue of activities by the speaker in the state of the victim. In other words, local state has less interest in having its law applied to protect the reputations of victims who have acted so as to affect their reputation (or invite reflections on it) abroad; the foreign state will have less interest in having its law applied to protect speakers who target foreign states. Here, the Plaintiff owes his victimhood to the fact that he was active in the US and making money on its markets – otherwise, he would have been of no interest to Barron’s. The Defendant, on the other hand, has no activity in Victoria and has not “targeted” that state by advertising the website or promoting the article there. Indeed, the relevant issue of the magazine exclusively covers matters relevant to investors in securities publicly listed in the US.
(iii) Multiple publication rule breaches Article 19 when applied to World Wide Web
67. The multiple publication rule, i.e. the rule in the Duke of Brunswick’s case, which applies in Australia and the UK but not in the USA, is a breach of Article 19 when applied to the Web because this leads to a multiplicity of actions, forum-shopping and unfairness to the media defendant. In this case, viewed in the round (by reference to all the factors ranging from geographical location of the web-server to the overwhelming number of readers in the US compared with Victoria) the “centre of gravity” of the defamation is in the USA. The “multiple publication rule”, however, permits action in any state in the world where the article is downloaded. As the leading private international law text points out, “it has to be admitted that the place of publication approach gives rise to practical difficulties in cases where defamatory material is disseminated through the internet not least because of the potential number of countries in which access may be had to that material”. The authors conclude that “localising” an internet defamation by way of the multiple publication rule is “somewhat unrealistic” and “it might therefore be more appropriate to regard the place of commission, in such cases, as the country in which, in the light of all the circumstances of the case, the substantial events which give rise to the claim have occurred”.[7]
68. It was argued in the Duke of Brunswick’s case itself (Appendix G) that the publication in question (sale of a back-issue of a newspaper, published seventeen years before, to the Duke’s servant) was publication to the Duke himself, not to a third party. This was rejected, as must have been the argument that publication was outside the limitation period. The short judgment delivered by Coleridge J is an authority that publication to an agent is actionable, and the fact that it occurred more than six years (the limitation period) after the newspaper first circulated did not make the action statute-barred. It does not follow, even when jurisdiction is not in issue, that every publication must be treated as a tort, much less that publication of information across multiple jurisdictions must give rise to a separate tort every time such information is accessed. In practice, the absurd consequences of the “separate tort” theory have been avoided in Australian domestic law by consolidation and mitigation of damage rules or curial use of inherent powers to treat multiple proceedings as an abuse of process. In America, the rule has been abolished,[8] and the single publication rule has been extended to apply to the internet.[9] It should have no place in international law, or in international human rights law, as a means of allocating jurisdiction.
(iv) Solution: sue the author/publisher under the law by which they operate
69. If lawful freedom of expression is to be protected, then the law which settles its boundaries must be the law by which it is produced, subject to exceptions in the case of (a) places of production deliberately chosen to avoid liability (the “defamation haven”, if such a place were even to exist); and (b) states which are deliberately targeted for increased sales. The High Court questioned whether this approach would identify the appropriate forum or forums with certainty (majority, paras 21 & 22) and its criticism may be valid where the rule is based only on the physical location of the webservers. Although articles may be written (e.g. by war correspondents) in foreign states, and servers may for business convenience be located abroad, the reality is that every media corporation has a “centre of operations” where journalistic material is edited and prepared for publication. Usually, this will be the state where the article is written and uploaded as well – even if, in federal systems, these functions may cross inter-state lines. There is rarely any problem in identifying the country in which the media operation is really based. The European Community, for example, has adopted a choice of forum rule for the regulation of trans-border television communications: jurisdiction is allotted to that state where the broadcaster is “established”, i.e. has its centre of activities, taking into account the place where decisions concerning programme policy were taken and the place where programmes were put together. This concept creates few difficulties, and similar approaches are taken in the tax laws of many nations. The question will be one of fact for the court in every case. Similarly, with the exception based on deliberate sales targeting, (a means of deciding inter-state jurisdiction for internet torts in America), it becomes a question of fact as to whether the defamatory publication was advertised or promoted in the state where the plaintiff seeks to sue.
70. Defamation is different, because it engages the Article 19 right which appears in many jurisdictions (but not in Australia) as a constitutional entitlement. A choice of law rule which serves to protect that entitlement for publishers by confining defamation liability to their centre of operations (except where they specifically target other law areas) protects state interests in maintaining those constitutional entitlements while ensuring that defamed individuals outside the operating state have access to one state where they can claim damages for all reputational loss. This protects internet publishers from the uncertainty and “chilling effect” of prospective liability under hundreds of different laws, and avoids the danger that they will either remove critical comment which might be actionable under the most plaintiff-friendly defamation regimes, or else decline subscriptions from such places or erect “firewalls” to stop citizens of states with repressive defamation laws from receiving this information. If Australian choice of law rules continue to deny foreign publishers the protection of the law by which their expression has been crafted or composed, they may well be tempted to decline subscriptions from Australians or erect firewalls against access from Australia (these being expedients by which liability under the High Court ruling might be avoided). Equally, Australian publishers with internet sites may do the same in respect to citizens of Asian and Pacific countries which have defamation laws which do not reflect, e.g. the privilege to publish reasonably on political and governmental issues. The consequence would be to diminish the amount of information available, and in particular the amount of information available to Australians, whose citizens and businesses have an Article 19 right to expect the most immediate and untrammelled access to information available elsewhere in the world.
VI. BREACH OF THE COMPLAINANT’S RIGHTS
71. Article 19(2) of the International Covenant on Civil and Political Rights ensures the right of everyone to:
“seek receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice”.
Additionally, Article 14(1) guarantees a fair hearing by an independent and impartial tribunal.
72. The UN Human Rights Committee (“the Committee”) has determined that:
“Article 19, paragraph 2, must be interpreted as encompassing every form of subjective ideas and opinions capable of transmission to others, which are compatible with article 20 of the Covenant, of news and information, of commercial expression and advertising, of works of art, etc.; it should not be confined to means of political, cultural or artistic expression.”[10]
73. Mr Alpert’s right to impart information and ideas, by articles for print and internet publication, is plainly infringed by the Australian High Court decision, and so is his right to a trial that is fair. In sum:
(a) his reputation and integrity as a professional journalist is impugned by the action.
(b) he remains liable as a joint tort-feaser within the Australian jurisdiction.
(c) In order to defend his own reputation, he has to incur great cost and inconvenience by leaving his family and professional responsibilities, and travelling to Victoria for what could amount to a lengthy period.
(d) His expression, although lawful in the US, will be judged by a foreign court under an unfamiliar law, and may be found unlawful.
(e) That law is, in its terms, non-compliant with Article 19.
(f) Under that law, his article may be injuncted from further publication.
(g) His publishers and employers will be liable to unlimited damages and to extensive legal costs, which could be recovered from him.
74. Asserting jurisdiction over the matter in Australia will have a chilling effect on the future exercise of freedom of expression by Mr Alpert, as well as by all persons in his position and all users of the Internet, for fear of being dragged into court in a foreign jurisdiction to defend defamation actions.[11]
75. On any rational test, American courts are the only places where the responsibility of Dow Jones/Alpert for unlawful defamation can properly be judged without such “chilling effect” because:
(a) The US is the country where Mr Alpert researched and wrote the article and where it was edited. This was done pursuant to American law and professional journalistic standards.
(b) It is the country where his article was uploaded to the web-site for US business purposes and where the web-site is located.
(c) The focus of the article was American stock regulation, and “Barron’s” focused only on American markets.
(d) The article was published by and for Americans – 97% of the print run of Barron’s was distributed in the US, and all material business in respect of Barron’s and WSJ.com are located in the US.
(e) Only a fraction of WSJ.com Internet subscribers who could have had access to Mr Alpert’s article gave banking details in Australia, and they all agreed to have any disputes governed by US and New York law.
(f) Mr Alpert’s journalism forms part of the Dow Jones news business, which is operated and insured under US laws and professional standards. The information he composes is provided by reference to what those laws and standards prescribe or permit, in accordance with, among other things, the constitutional rights which the journalist, publisher and the overwhelming majority of its readers enjoy because they are American. The liability insurance, privacy policy, subscription agreements etc that cover Mr Alpert’s work are arranged in the expectation that disputes will normally be submitted to adjudication in the United States.
(g) Victoria has no defence of reasonable or public interest journalism except in respect of political or governmental matters.
(h) It is fair to require the plaintiff to sue in America. Mr Gutnick has a long history of presence in New York and of business operations there, actively and personally promoting his stocks to US investors, competing for their money in the American marketplace. Most significantly, as the article correctly reported, he had announced that he was moving up to half his business to America to benefit from the strength of the US dollar – in effect to make money in America from Americans.
(i) Mr Alpert has no personal or professional association with Victoria. Dow Jones also has no place of business and no corporate presence in Victoria.
(j) Neither Barron’s Online, nor Mr Alpert’s article was marketed or promoted in Victoria. The activity which directly caused the product to enter the state was that of third parties who brought it in by taking active steps to subscribe or search for it.
CONCLUSION
76. A resident of Victoria who voluntarily and publicly sets out to make money in America by doing business in America must expect that he will be subjected to lawful scrutiny by the American business media, operating under the law of the US constitution: there can be no injustice to him in submitting his claim that they have defamed him to the courts of that country. There is, however, real injustice in depriving Mr Alpert, through the action against his publisher, of the constitutional protection and juridical advantages of the legal system under which he has researched and written the article, and under which it was published. For this reason, the fair trial as well as the free speech guarantees of the Covenant are engaged. It cannot be “fair” to try an author or publisher for a civil wrong under a law that lacks the basic constitutional protection that they enjoy and have done nothing to waive (e.g. by entering Victoria to promote the article).
77. There is always a danger of unfairness when a foreigner – particularly one perceived as wealthy (and Dow Jones is perceived in this way in Australia) – is hauled before a jury by a “home state hero”, and accused of damaging his reputation. The lawfulness in the US of Alpert/Dow Jones’ conduct will be irrelevant, or (more likely) an aggravating factor: US press law is unlikely to be understood by Victorian judges, trained in a different tradition which is antipathetic to US concepts of free speech and its practitioners: see Annexure A.
VII. “JUSTIFICATIONS” FOR BREACH OF ARTICLE 19 RIGHT
78. In Park v Republic of Korea, the Committee held that:
“[t]he right to freedom of expression is of paramount importance in any democratic society, and any restrictions to the exercise of this right must meet a strict test of justification”.[12]
79. Any restriction on freedom of expression must cumulatively meet the following conditions:
(a) It must be provided for by law;
(b) It must address one of the aims enumerated in paragraph 3 (a) and (b) of article 19; and
(c) It must be necessary to achieve the legitimate purpose.[13]
80. Article 19(3)(a) allows for limitations necessary “for respect of the rights or reputations of others”. This exception must be read in the context of Article 17(1) which protects a citizen from “unlawful attacks on honour and reputation”. The important point is that the restriction cannot be “necessary” if the attack is lawful by the law of the place where it was prepared and principally made.
“Provided for by law”
81. It is the assertion of jurisdiction by the Australian courts, and their failure or inability to develop the common law of tort to accommodate the nature and demands of the World Wide Web, that produced a situation whereby authors and publishers whose work appear on the internet may be sued under hundreds of disparate laws, in hundreds of different places.
82. The European Court of Human Rights (“ECHR”) and the Supreme Courts of the United States and Canada have all recognised that common law doctrines may pass the test of “prescription by law”, but only if these doctrines comply with the principle of the rule of law, and in particular, only if the law is adequately accessible, clear and precise.[14]
83. The test was formulated as follows by the ECHR:
“Firstly, the law must be adequately accessible: the citizen must be able to have an indication that is adequate in the circumstances of the legal rules applicable to a given case. Secondly, a norm cannot be regarded as a “law” unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able – if need be with appropriate advice – to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail.”[15]
84. The publication rule as formulated by the Australian High Court states that a cause of action for the tort of defamation can arise wherever and whenever material is “downloaded on to the computer of a person who has used a web browser to pull the material from the web server” (Appendix C at para 44). Although this rule may in itself be adequately accessible, it certainly does not “enable the citizen to regulate his conduct” or to foresee to a reasonable degree, “the consequences which a given action may entail”.
85. In the Sunday Times and other cases, the ECHR has considered whether the common law of contempt in the United Kingdom was formulated with sufficient precision to satisfy the requirements of the European Convention on Human Rights. Their consideration was “complicated” by the fact that different principles of English Law were relied on by various Law Lords in reaching their finding of contempt.[16] But the rights violation at hand involves uncertainty and unforeseeabillity of an entirely different order to these examples in the jurisprudence of the ECHR. It is not merely a matter of lack of clarity regarding the manner in which a domestic court might interpret or apply imprecise concepts of domestic law – a matter on which the advice of a prudent lawyer may be of some assistance. Instead, as a result of the decision of the Australian High Court, Mr Alpert and others in his position are faced with uncertainty regarding whichjurisdiction’s laws might apply to their publication – a matter that will depend entirely on which of the 540 million Internet users download the publication in question, and where. The very fact that a web defamation of an international celebrity may be sued on in any of the 191 states in the world, many of them federations encompassing various local defamation rules, means that the restriction is not “provided for by law” – it is provided for by hundreds of often conflicting laws, any one of which the plaintiff may activate. There can be no requisite degree of certainty in such a case.
86. It is clear that the multiple publication doctrine does not enable individuals to regulate their conduct, i.e. their expression, with the necessary certainty. It falls short of the requirements of the rule of law and therefore cannot be said to be “provided for by law” as required by article 19(3) of the Covenant. The restriction of Mr Alpert’s rights can therefore not be justified by reliance on article 19(3)(a).
“Necessary to achieve a legitimate purpose”
87. Restriction cannot be justified on the basis of article 19(3)(a) for two reasons: (i) the doctrine adopted by the Australian High Court cannot be said to be “necessary to achieve the legitimate purpose”; secondly, its admitted consequence is to subject the complainants to a Victorian libel law which is over-restrictive and unnecessary to provide proper vindication for reputation in any circumstances (see below) and particularly here, where the circulation of the foreign publication was de minimis.
UNHRC and ECHR jurisprudence
88. The following principles regarding the requirement of “necessity” can be distilled from the jurisprudence of the Committee:
(a) The test must be strictly applied.[17]
(b) Even greater scrutiny must be given at the proportionality stage to restrictions that pass the first hurdle (namely that it was indeed “provided by law”) but are nevertheless “broad and unspecific”.[18]
(c) The restrictions must be narrowly tailored, and must not “go any further than that which was necessary to achieve its protective functions”.[19]
(d) The restriction will not be justifiable if the “protection may be achieved in other ways that do not preclude freedom of expression”.[20]
89. The equivalent provision in the European Convention on Human Rights also contains the adjective “necessary”, which has been interpreted, within the meaning of Article 10(2), to imply the existence of a “pressing social need”.[21]
90. The test of “necessity in a democratic society” is therefore to determine:
(a) whether the “interference” complained of corresponded to a “pressing social need”,
(b) whether it was proportionate to the legitimate aim pursued; and
(c) whether the reasons given by the national authorities to justify it are relevant and sufficient.[22]
91. The question of “proportionality” in (b) above is determined by the need to find a fair balance between the protection of the individual rights, and one of the factors that must be taken into consideration when determining whether a restriction is proportionate is whether a less restrictive, but equally effective alternative exists.[23]
92. Applying these requirements to the case at hand it is clear, firstly, that the strictest approach must be followed in justifying the restriction in light of the broad and unlimited jurisdictional liability that the High Court sought to impose. In particular, it will be for the government to justify why such a broad restriction is necessary when a suitable, effective and less restrictive alternative exists.
Less restrictive alternative: the proposed publication rule
93. Such an alternative was presented to the High Court in the form of the proposed publication rule that re-assesses and develops the rules of the common law of defamation, which mainly derive from 19th century English cases. The Australian Courts themselves recognised this need in Lange v ABC where it was said that:
“the modern development in mass communications, especially the electronic media, now demands the striking of a different balance from that which was struck in 1901.”[24]
The balance is struck by defamation laws which are markedly different, even between countries that have inherited the English common law.
94. In the context of global dissemination of information on the World Wide Web, the publication rule suggested at para 95 below does not expose journalists and publishers to liability in every jurisdiction (or at least in multiple jurisdictions), and provides plaintiffs with access to a court which can compensate them for all damage suffered. It strikes the most proportionate balance.
95. This rule locates the act of publication in the place where the article is substantially produced, rather than in any place where it happens to be downloaded by computer users, unless:
(a) the place of uploading is merely adventitious or opportunistic;
(b) the publisher or author has instigated the downloading (e.g. by promoting the article), and thus by conduct in the place of downloading has waived the rule’s protection and provided the state in which downloading occurred with a clear interest in assuming the power to adjudicate a claim. (This would be analogous to the situation in which foreign libel law will be applied, notwithstanding the First Amendment, in the US against an American publisher who has (e.g. by targeting another country for book distribution) acted in “a manner consistent with the intention to abandon First Amendment protections.”[25]
VIII. DEFECTS IN AUSTRALIAN DEFAMATION LAW
96. There are two respects in which the complainant alleges that Australian defamation law, to which he will be exposed by virtue of the High Court decision, fails to comply with Article 19. These are:
(a) The burden of proof of justification (truth) lies on the defendant, and
(b) the imposition of strict liability, without need to prove the defendant was at fault, other than in cases which concern political or governmental matters.
97. Both these defects arise from English common law, as adopted in Victoria. In respect of (b), the English courts have created a generic “qualified privilege” for reasonable media treatment of matters of public importance. This has been a recent development, influenced by Human Rights treaties (especially the ECHR). Australia has no Bill of Rights incorporated in domestic law, and it is clear from Lange and Gutnick that further development of the common law can only come by statute or under the impetus of a decision from the HRC.
Burden of proof
98. The placing of the burden on the defendant in defamation is unique in the common law of tort. It stems from the archaic legal presumption that every defamation (i.e. every statement which tends to lower a reputation) is false. The media defendant must prove truth – in the case of allegation of serious or criminal misconduct, to a very high standard. Libel trials commence with the (often false) presumption that the plaintiff has a spotless character and the media defendant bears the burden of disproving it, and by admissible evidence. This standard may not be met, in the case of true imputations, if for example witnesses die or are promised confidentiality or have unprepossessing characters, or if the evidence is persuasive but not conclusive.
99. Placing the onus on the defendant is incompatible with a rule protecting freedom of speech such as Article 19 (Article 10 of the ECHR), because such a rule operates to impose a presumption in favour of speech (whether or not it is defamatory) and requires exceptions to be justified. This presumption in favour of free speech is, of course, rebutted where it is necessary to protect the reputation of others, but this necessity only arises where the claimant can show that he truthfully possesses such a reputation – in other words, where it can be established that the defamation is false. Australian law, by adopting the presumption that all defamations are false and hence the author/publisher must prove them true, elevates the private right to reputation to a higher level than the public right to free speech.
100. Analysis of the major human rights treaties – the Universal Declaration, the ECHR and the American Convention, as well as the ICCPR – demonstrates the contrary. It shows freedom of expression to be a fundamental right, while the right is reputation is a secondary right – an exception to be narrowly construed and only permitted to override the basic right when it is truly necessary to do so in a democratic society. In the case of factual statements, i.e. information, that necessity can only arise if the information can be demonstrated – on the balance of probabilities – to be false. The common law rule in Victoria, which places the burden of establishing truth on the author/publisher, necessarily has a “chilling effect” on the publication of information. It means that they will not take the risk of publishing what may be important public interest information, which they reasonably believe to be true, because it may be impossible to prove that truth forensically (especially where, as in Victoria, no “reasonable publication” defence is available). This is the “chilling effect” described by the House of Lords:
“What has been described as the `chilling effect’ induced by the threat of civil actions for libel is very important. Quite often the facts that would justify a defamatory publication are known to be true, but admissible evidence capable of proving those facts is not available. This may prevent the publication of matters which it is very desirable to make public.”[26]
101. International law recognises that any rule of law that chills investigative journalism cannot stand with freedom of expression guarantees in human rights treaties. This principle has been applied by international courts in three landmark cases:
1. Compulsory membership of An Association for the Practice of Journalism: Inter-American Court of Human Rights.[27]
2. Goodwin v UK: European Court of Human Rights.[28]
3. Prosecutor v Brdjanin, Re Randall: Appeals Chamber, ICTY.[29]
102. In the Journalism Association case, the Inter-American Court recognised that professional licensing, however intended to improve ethical standards, nonetheless might result in a journalistic reluctance to write critically of government. In Goodwin, the European Court expressly referred to the “chilling effect” as the reason for extending Article 10 to free journalists from obligations to identify their sources:
“Without such protection, sources may be deterred from assisting the press in informing the public on matters of public interest. As a result, the vital public watchdog role of the press may be undermined … – having regard to … the potentially chilling effect an order of source disclosure has on the exercise of that freedom, such a measure cannot be compatible with Article 10 of the Convention unless it is justified by an overriding requirement in the public interest.” (para 39)
103. In Randall, the ICTY established a qualified privilege for war correspondents against being compelled to testify at international courts. This was expressly related to the protection of their newsgathering function, because otherwise they would be denied interviews with military leaders and access to war zones. Routine compulsion would have a “chilling effect” on their ability to gather and report newsworthy facts.
104. These three cases provide examples of how international human rights laws applies a presumption in favour of free speech in relation to exceptions like public order (the Journalism Association case) and the interests of justice (Goodwin and Randall). The HRC is invited to adopt a similar approach in relation to the exception of the right to reputation.
No “reasonable publication” defence
105. The second aspect of Victorian defamation law that breaches Article 19 is the lack of any public interest defence to libels that relate to financial transactions, however criminal such transactions may be. In this respect, the common law of Australia has fallen into serious disrepair, and its courts – without statutory provision for human rights – have signally failed to protect free speech, unlike the common law courts of the UK, New Zealand and South Africa. It is precisely the “freedom of expression” guarantee which requires there to be a public interest defence for the publication of information reasonably believed to be true. This is usually expressed as a “qualified privilege” to report factual statements of public interest after reasonable and professional care has been taken by journalists and editors who believe them to be true – even though they turn out to be false or unable to be proved. The most extensive privilege of this kind has been forged by the New Zealand courts. In England, the House of Lords has devised a privilege for reasonable reporting which can only be defeated if the plaintiff proves malice. This protection applies to all matters of public interest, and is not confined to the sphere of the political or governmental. Similarly in South Africa, the Supreme Court of Appeal has held that the freedom of expression guarantee in the Constitution mandates a “reasonable publication” defence. [30] Under this common law rule, media defendants are permitted to establish that the publication of a defamatory statement, albeit false, was nevertheless reasonable in the circumstances.
106. Sadly, Australian defamation law has not progressed as it has in these other Commonwealth courts. Lacking a Bill of Rights, the judges have had to find an “implication” supporting freedom of expression from the Constitution. This “implication” is limited to “political and governmental matters”: see Lange v ABC. Because of this limitation, a defence of Alpert’s article based on qualified privilege has been struck out as incapable of argument under Australian law. It follows that no matter how scandalous or criminal the corporate misbehaviour that journalists wish to expose, they will be denied a “reasonable publication” defence.
107. This is a glaring deficiency in Australian law. The result is that the country’s financial press is hobbled by threats of libel action, and in consequence journalists fail to expose the behaviour of crooked business people for fear of defamation actions. Victoria itself suffered a massive and catastrophic failure of its state bank, which caused great distress and loss to many thousands of ordinary people: the media dared not publish warnings, for fear of libel action. Australia has more financial scandals than most countries, because financial journalists are unable to play the role of “public watchdog” prescribed by the ECHR in Goodwin. The most outrageous business scandals are dealt with retrospectively through the device of Royal Commissions, which try to close the door through which crooks and conmen have bolted. The local financial press cannot perform its investigative role because it lacks the qualified privilege safety net vouchsafed to journalists in other common law countries.
108. The High Court majority does show a welcome recognition of the deficiency in this respect of the common law, and at para 51-2 recognises that the reasonableness of the publisher’s conduct is significant: “some development of the common law in defamation is necessary”. However, this passage seems to relate to “action for publications in several places”, and not where the device is deployed of “limiting” the claim to publications within the jurisdiction.
109. The combined effect of the media defendant bearing the burden of proof and having no “reasonable publication” defence plainly puts Victorian law in breach of Article 19. It means that the only defence for a critical factual statement about prominent business people is “justification”; unless the media can shoulder the burden of proving truth to a high degree of certainty, then author and publisher will be mulcted in damages. In these circumstances, Victoria is not a state where financial journalism can operate to fulfil the “watchdog” role guaranteed by Article 19.
[1] [2000] EMLR 431, CA
[2] [2001] 2 AC 127
[3] [2000] 1 NZLR 257, PC; [2000] 3 NZLR 385, CA
[4] John Fairfax & Sons v Vilo (2001) 52 NSWLR 373
[5] Gutnick v Dow Jones (No 2) Supreme Court of Victoria, March 2003.
[6] Thus foreign libel law is applied, notwithstanding the First Amendment, in the US against an American publisher who has directly distributed all copies of a book in that foreign country: by so doing, US-based publisher had “acted in a manner consistent with the intention to abandon First Amendment protections”: Desai v Hersh 719F Supp 670 (1989) at 680=81. See discussion by Chasinow J in Telnikoff v Matusevitch (1997) 702 A 2d 230 at 258-60 and Yahoo Inc v La Ligue Contre le Racisme et Antisemitisme (unreported, judgment of Fogel J, 7 November 2001) p 21: “If a hypothetical party were physically present in France engaging in expression that was illegal in France but legal in US, it is unlikely that a US court would or could question the applicability of French law to that party’s conduct. However, an entirely different case would be presented if the French court ordered the party not to engage in the same expression in the US on the basis that French citizens (along with anyone else in the world with the means to do so) later could read hear or see it. While the advent of the internet effectively has removed the physical and temporal elements of this hypothetical, the legal analysis is the same.”
[7] Dicey-Morris, 13th edn, para 350137 at p 1568
[8] Even in respect of limitation periods, “the rule of Duke of Brunswick v Harmer gave scant heed to the public policy which underlies statutes of limitation, long regarded as `statutes of repose’ designed to outlaw state claims”: Gregoria v GP Putnam & Sons 298 NY 119 (1948) and see Ogden Association of US Army 177 F Supp 498 (1959). In general, as held by US Circuit Court of Appeals for the Third Circuit in Hartmann v Time 166 F 2d 127 (1948), “the so-called `single publication rule’ … is the preferable one and is recommended both by logic and by public policy. Public policy must regard the freedom of the press and while the law must exact penalties for libel the instruments of free and effective expression, newspaper and magazines which are published on a nationwide basis, should not be subjected to the harassment of repeated law writs”. And see Prosser, “Interstate Publication”, Michigan Law Review, Vol 51 p 960 (1953).
[9] Robert Van Buskirk v. The New York Times Co. 28 Media L. Rep. 2525; Affirmed by Robert Van Buskirk v. The New York Times Co. and John L Plaster 2003 U.S. App. LEXIS 6308
[10] Ballantyne Davidson and McIntyre v Canada (359/1989 and 385/1989) ICCPR A/48/40 vol II (31 March 1993) 91 (CCPR/C/47/D/359/1989/385/1989) at para 11.3
[11] New York Times v Sullivan (1964) 376 US 254 at 279 (on the “chilling effect” of defamation actions); Derbyshire County Council v Times Newspapers [1993] AC 534 at 1018
[12] Park v Republic of Korea (628/1995) ICCPR, A/54/40 vol II (20 October 1998) 85 (CCPR/C/64/D/628/1995) at para 10.3
[13] Ballantyne, Davidson & McIntyre v Canada (359/1989 and 385/1989) ICCPR/C/47/D/359/1989/385/1989) at para 11.4
[14] Sunday Times v United Kingdom Series A No 30, p 38; (1979) 2 EHRR 245 at para 49; Grayned v Rockford 408 US 104, 108 (1972); R v Thomsen (1988) 1 SCR 640, 650-1
[15] Sunday Times v United Kingdom at para 49
[16] Sunday Times v United Kingdom at para 50-52; Rekvenyi v Hungary (1999) EHRLR 114; (1999) 6 BHRC 55 at para 34-37; Hashman & Harrup v United Kingdom (1999) EHRLR 341 at para 29-41
[17] Park v Korea at para 10.3
[18] Kim v Republic of Korea (574/1994) ICCPR A/54/40 (3 November 1998) (CCPR/C/64/D/574/1994) at para 12.3
[19] Ross v Canada (736/1997) ICCPR A/56/40 vol II (18 October 2000) 69 at para 11.6
[20] Ballantyne, Davidson & McIntyre v Canada at para 11.4
[21] Handyside v United Kingdom (1979-80) 1 EHRR 737 at para 48; Ozgur Gundem v Turkey (App no 23144/93) [2000] ECHR 23144/93 at para 57
[22] Sunday Times v United Kingdom at para 62
[23] Campbell v United Kingdom (1993) 15 EHRR 137; Informationsverein Lentier v Austria (1994) 17 EHRR 93
[24] Lange v ABC (1997) 189 CLR 520 at 565
[25] Desai v Hersh 719 F Supp 670 (1989) at 680-1; Telnikoff v Matusevitch (1997) 702 A 2D 230 at 258-60; Yahoo Inc v La Ligue Contre la Racisme et Antisemitisme (unreported, judgment of Fogel J, 7 November 2001) at p 21
[26] Derbyshire County Council v Times Newspapers (1993) 1 All ER 1011 (HL) at 1018 per Lord Keith
[27] 13 November 1985 (no 5)
[28] (1996) ECHR 17488/90
[29] 11 Dec 2002, IT-99-36
[30] National Media Ltd v Bogoshi 1998 4 (SA) 1196 (SCA)
Bill Alpert 