Jurisdiction

This Chapter introduces you to the concept of jurisdiction in the internet context. It starts by explaining the differences between jurisdiction in the narrow sense, which generally refers to the power and authority of a court to hear and decide on a matter, and in the broad sense, which encompasses the separate yet related issues of choice of law, choice of forum, and recognition and enforcement.1) This Chapter explains the different types of jurisdiction, including personal, subject matter and in rem, as well as choice of law, choice of forum, and recognition and enforcement in turn. It concludes with a short case study.

Overview Videos by Rita Matulionyte and Megan Patten

The application of rules of jurisdiction to the internet is a challenging issue for courts around the globe. Western democratic understandings of jurisdiction have evolved in relation to the geographical boundaries of countries.2) Western democracies assert sovereign power, which is based on the will of their people, to govern persons and things within their territory free from external interference. A nation state's jurisdiction does not usually extend beyond its geographical boundaries.3) However, now that people routinely use the internet and other emerging technologies to interact across jurisdictional boundaries, courts have been grappling with complex legal questions of which state may and should properly exercise jurisdiction over parties to online activities.

In the strict sense, jurisdiction “refers to the authority of a court to decide a matter”,4) which is determined solely by application of the principles of jurisdiction.5) A court can competently adjudicate on a matter if it has both subject matter jurisdiction and personal jurisdiction. If a court hears and decides on a matter, without proper jurisdiction, the judgment is generally unenforceable and could be quashed.6) In the broad sense, jurisdiction also encompasses the related, but separate, issues of: (1) choice of law, (2) choice of forum and (3) recognition and enforcement of foreign judgments.7) The broad conception of jurisdiction is often referred to as private international law. We will expand on the concept of jurisdiction as well as choice of law, choice of forum and recognition and enforcement below.

A court will only have personal jurisdiction over a foreign defendant if the defendant: (1) is present in the jurisdiction, (2) has submitted to the jurisdiction or (3) other court rules apply, such as where:

  • the defendant is domiciled or ordinary resident in the relevant jurisdiction;
  • disputed property is within relevant jurisdiction (in rem jurisdiction); or
  • there are special grounds under tort, contract or consumer laws, or a breach of another statute.

Generally, for a court to have personal jurisdiction over a defendant, the court must serve that defendant with an originating process issued by the court while the defendant is within the court's geographical boundaries.

Overview by Rita Matulionyte

Subject matter jurisdiction refers to the subject matter or types of actions that a court may hear and decide on. Courts are often limited with respect to the type of matter that they can hear as well as the amount in dispute. In Queensland, for instance, a money dispute of a value up to $150,000 can be resolved in the Magistrates Court,8). At the national level, the Federal Circuit Court of Australia has exclusive jurisdiction to hear and determine civil disputes concerning copyright, designs, trade marks and plant breeder's rights, among other subject matter.9)

Contract Law

Video Overview by Rita Matulionyte

Parties to a contract may select the legal system that will govern their rights, obligations and other matters under a contract (known as choice of law provision/s or jurisdiction clauses). If an international contract does not specify the jurisdiction where potential disputes between parties will be resolved, Australian courts may have jurisdiction over that contract where the contract is: (1) made within the jurisdiction, (2) governed by the law of the forum or (3) broken/repudiated within the jurisdiction.

Does the law differ for e-contracts? Electronic Transactions Act 1999 (Cth) (States and Territory equivalents)

  • E-message (normally, acceptance) is taken to have been received by the recipient in their place of business/ordinary residence.
  • Parties may agree on the place where e-contract was made; however, this does not preclude the courts from determining where a contract was actually made.

What if an e-contract is broken by repudiation?

  • Place where the message of repudiation originated
  • Presumption: originator’s place of business/ordinary place of residence

Torts Law

Video Overview by Rita Matulionyte and Jennifer Davy on the Lex Loci Delicti Rule

The general lex loci delicti rule is that courts have jurisdiction over the dispute if the tort occurred inside the territory of the court. See the Choice of Law section below.

Gutnick v Dow Jones Inc (2002) CLR 575 (Video Overview by Jack Longley)

  • Facts: Dow Jones & Co, Delaware Corp., published some allegedly defamatory material about Joseph Gutnick in Barrons Magazine online, per subscription. 305,563 copies sold (14 in Victoria), 550,000 online subscribers (300 in Victoria). Gutnick sued Dow Jones in the Victorian court.
  • Issue: personal jurisdiction over Dow Jones? Where did defamatory publication occur?
  • Place of server (New Jersey, US), unless adventitious or opportunistic? “Single publication” rule
  • Any place where the content can be accessed, including Australia?
  • Held: Balance of interests of publisher/freedom of speech and individual’s reputation
  • Defamation occurs in the place where damage to reputation occurs
  • Damage to reputation occurs in the place where defamatory material is downloaded
  • No “single publication rule”, as applied by US courts

Kelly v Levick [2016] QMC 11

  • Facts: The Defendant posted a defamatory post about the Plaintiff on his Facebook page. It was found that the post was 'downloaded' in Victoria, Australia and South Africa by two (2) individuals. The Plaintiff commenced proceedings in Queensland.
    * Issue: Does a Queensland court have jurisdiction to hear the case if there has been no 'download' in accordance with the principle from Dow Jones v Gutnick (see [5])?
  • Section 11 of the Defamation Act 2005 (Qld) includes a regime for choice of jurisdiction, which includes an “Australian jurisdictional area”.
  • As the post was downloaded in Victoria, which is an “Australian jurisdictional area”, the “cause of action” proceedings in Queensland can proceed.
    * Must apply Victoria's defamation laws pursuant to S.11(1) of the Defamation Act 2005 (Qld).
  • Held: As long as publication is 'downloaded' to one resident of an “Australian jurisdictional area” then a Queensland court will have jurisdiction to hear the cause of action.
  • It is statue which determines jurisdiction and not the principle of Dow Jones (although it important to determine where the publication was made).

Intellectual Property Law

IP rights are territorial. Australian courts have jurisdiction only over IP rights granted in Australia and infringed in Australia.

Ward Group Pty Ltd v Brodie & Stone plc. (2005) 143 FCR 479

  • Facts: Defendant located in UK uses an AU trademark in respect of its goods and services without authorisation of AU right holder
  • Held: The use takes place outside Australia; unless defendant intends to do business with Australian consumers, access is not sufficient.

Lucasfilm Ltd v Ainsworth [2012] 1 AC 208

  • Facts: Ainsworth, a UK resident, was selling Stormtrooper outfits online. Lucasfilm, US company, sued Ainsworth before the UK courts both for the UK and US copyright infringement
  • Issue: does UK court have jurisdiction over the US copyright infringement? Does Mosambique rule apply?
  • Held: Mosambique rule denied, jurisdiction confirmed

Consumer Protection Law

Australian Competition and Consumer Commissioner v Chen (2003) 132 FCR 309

  • Facts: Chen, who resided in the US, ran a fake website for the Sydney Opera House, through which he sold unauthorised tickets. The ACCC sued him claiming violations of the Australian Consumer Law.
  • Issue: the court had to determine whether the misrepresentation occurred in Australia or the United States.
  • Held: If misleading or deceptive conduct on an overseas website can be shown to have caused damage to Australian consumers, personal jurisdiction over a foreign defendant can be established.

In rem jurisdiction, which roughly translates to jurisdiction 'about or over a thing', enables a court to exercise power over property, either real or personal, or a status against a person even when the personal jurisdiction is absent. An action in rem assumes that the property is the primary object of the action rather then personal liabilities not necessarily associated with the property, and is conclusive against the world. Courts often apply in rem jurisdiction in cases, inter alia, concerning real estate, potentially illegal goods on cargo ships and domain names.

In Rem Jurisdiction and Domain Names

The United States (US) Anti-Cybersquating Protection Act establishes that the US has in rem jurisdiction over domain names.10)

Cable News network LP v Cnnnews.com 56 Fed. Appx. 559 (4th Cir 2003)

  • F: Chinese company owned a domain name cnnnews.com registered in the US
  • H: US courts confirmed in rem jurisdiction over the domain name

Once a court has determined whether it has personal and subject matter jurisdiction, it must decide whether the laws of that state or another country should be applied to proceedings. The rules that courts use to determine which laws should apply are known as choice of law rules.11) The primary legal question for the choice of law issue is: which law governs the dispute? Different choice of law rules apply to different bodies of law.

Contract Law

As explained above, parties to a contract may select the legal system that will govern their rights, obligations and other matters under a contract (known as choice of law provision/s or jurisdiction clauses). If a contract does not contain a choice of law provision, the court will consider: (1) whether parties have evinced a common intention as to the law that should govern their contract/potential disputes; and (2) the law with which the contract has the closest connection, which can be evinced by form and legal language, place of contract, place where the contract is to be performed, place of residence of the parties and so forth.

Torts Law

Video Overview by Georgia Ardouin

As explained above, the lex loci delicti rule applies to torts law. Double actionability rule: the events are actionable both under the law of the forum and under the law of the place where the events took place. Australian courts are generally very reluctant to apply foreign law. See forum non-convenience doctrine below.

Dow Jones & Company Inc v Gutnick

  • Held: Place of wrong in defamation proceedings in respect of online content is the place where damage to reputation is suffered (i.e. where the plaintiff had reputation and where the content was downloaded). Compare this with Ward Group Pty Ltd v Brodie & Stone plc. (2005) 143 FCR 479 (access online is not sufficient, targeting needed).

Even if a court has personal and subject matter jurisdiction in proceedings, and the laws of that forum will apply to proceedings (based on choice of law rules), a court may still decline to exercise jurisdiction on the basis that the court is not the “appropriate forum”12) to exercise jurisdiction.13) The principle that a court may decline to exercise jurisdiction is know as 'forum non conveniens'.

Declining Jurisdiction - 'Forum Non Conveniens'

Video Overview by Rita Matulionyte and Cameron Martin

Courts can deny jurisdiction based on the “clearly inappropriate forum” or “Voth”14) test. The High Court in Voth rejected the “more appropriate forum” in favour of the “clearly inappropriate forum” primarily to minimise the extent that courts have to make value judgments about courts and conceptions of justice in foreign jurisdictions.15)
Facts that a court can take into consideration when apply the Voth test follow:16)

  • Connection between the chosen forum and the subject matter or parties;
  • Forum provides a legitimate and substantial juridical advantage to the plaintiff;
  • Alternative forum would grant plaintiff an adequate relief; and
  • Law of the chosen forum is the applicable substantive law:

Dow Jones v Gutnick (2002) CLR 575

  • Defendant’s argument: Victoria is forum non convenience since law of New Jersey would be the substantial applicable law
  • Held: no, Victorian law shall be applied since the reputation was damaged in Victoria

Macquarie Bank v Berg (1999) NSWSC 526

Video Overview by Tom Ryan

  • Facts: Berg, a former employee of the Macquarie Bank, was posting allegedly defamatory material on the US-based website. Macquarie applied for interlocutory injunctive relief to stop the conduct.
  • Issue: whether the court had jurisdiction to grant an injunction to prevent conduct occuring outside Australia.
  • Held: Generally yes, but the court declined an injunction because of: the uncertainty of enforceability of such an order; the international nature of the internet and potential international effect of NSW law if the injunction was granted; and established case authority which demonstrated great caution in granting interlocutory relief.

Substituted Service via Social Media

Rhiannon Butcher and Andrew Avenell explain substituted service via social media

Rule 116 of the Uniform Civil Procedure Rules 1999 (Qld) enables the court to order that substituted service is will be taken to have occurred when normal service is impractical and another acceptable method of service is used. In order for a plaintiff to be successful in obtaining an order allowing substituted service of court documents via social media, the plaintiff will need to establish:

  • that there is a practical impossibility of normal service in the circumstances; and
  • that the proposed method of substituted service (ie via social media) will be likely to bring knowledge of the proceedings to the defendant.

In summary, a court must determine whether that the defendant is the personality behind the social media account.

Imagine that defamatory information was published about you by someone from Australia on a US website, badpeople.com, which is hosted in a server in Vanuatu. 2,000 users from around the world have accessed the defamatory information, including 50 users in Australia. The questions that you need to ask are as follows:

  • Jurisdiction: Which court/s have jurisdiction over the website? Is it Australia where the person about whom defamatory content was published resides, the United States on which website the content was hosted or Vanuatu where the server hosting the content was situated? Do you need to consider any other jurisdictions? Is there subject matter and personal jurisdiction?
  • Choice of Law: Once you have established that a court has jurisdiction over parties to a matter and the subject matter, you need to determine whether the laws of that state or another state should be applied to the matter. Which country's laws apply to adjudicate the matter?
  • Choice of Forum: Even if you determine that a court has personal jurisdiction and subject matter jurisdiction, and that a country's laws will apply to the matter, you still need to determine whether the court is the most appropriate forum to exercise jurisdiction.
  • Recognition and Enforcement: Can a decision of a foreign court be recognised and enforced in different countries?

1) , 2)
Brian Fitzgerald et al, Internet and E-commerce Law, Business and Policy (Thomson Reuters (Professional) Australia Limited, 2011) 57 ff
3) , 6)
Cyber Law Centre, 'Internet Jurisdiction - What Is Jurisdiction?' www.cyberlawcentre.org/genl2032/12Jurisdiction-v1.pptx
4) , 7)
Brian Fitzgerald et al, Internet and E-commerce Law, Business and Policy (Thomson Reuters (Professional) Australia Limited, 2011) 58
5)
John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36 at [25]
9)
Federal Circuit Court of Australia, 'Intellectual Property' http://www.federalcircuitcourt.gov.au/wps/wcm/connect/fccweb/gfl/intellectual-property
10)
Catherine T. Struve and R. Polk Wagner, 'Realspace Sovereigns in Cyberspace: Problems with the Anticybersquatting Consumer Protection Act' https://heinonline.org/HOL/Page?collection=journals&handle=hein.journals/berktech17&id=1019&men_tab=srchresults
11)
Brian Fitzgerald et al, Internet and E-commerce Law, Business and Policy (Thomson Reuters (Professional) Australia Limited, 2011) 90 ff
12) , 14)
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
13)
Brian Fitzgerald et al, Internet and E-commerce Law, Business and Policy (Thomson Reuters (Professional) Australia Limited, 2011) 126 ff
15)
Brian Fitzgerald et al, Internet and E-commerce Law, Business and Policy (Thomson Reuters (Professional) Australia Limited, 2011) 127 ff
16)
Spillasa Maritime Corp v Cansulex Ltd
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