Australian and regional regulatory responses to the key challenges of consumer protection in electronic commerce (March 2008)

3.5. Jurisdiction

3.5.1. Forum Non Conveniens
3.5.2. Dow Jones v Gutnick
3.5.3. Jurisdiction and Consumer Protection in the Trade Practices Act

Australia’s jurisdiction laws come from both the common law and the statutes of each state. Courts may exercise jurisdiction if a defendant is in their territory, or if there is a sufficient connection between the claim and the territory (such as a tort committed or a contract formed in the state). The High Court of Australia applied the existing laws to a case of Internet defamation in Dow Jones v Gutnick, rejecting the argument that these laws could not apply to the Internet due to its special nature.

Australian courts exercise jurisdiction in accordance with both the common law and the statutes of each state. The basis for jurisdiction is, in either case, a connection to the particular forum, whether by territory (at common law) or subject matter (under the statutes).

There is at present no legislation governing jurisdiction in claims concerning the Internet, however the High Court of Australia has examined the issues in Dow Jones v Gutnick, determining that a defamation suit could be brought against a party who publishes material on the Internet, notwithstanding that the material was uploaded in another country.

At common law, the jurisdiction of an Australian court is generally a matter of territory. In order for a court to have jurisdiction over an individual, the plaintiff must bring a suit against that individual while the individual is in the court’s territory. Once a person has left the court’s territory, common law jurisdiction cannot be exercised upon them, although the court may still exercise common law jurisdiction over the individual’s agent. In the case of a foreign corporation, the question of whether a court may exercise jurisdiction will be answered by considering whether the corporation has a place of business in the court’s territory, and the nature and duration of the business.

In addition to common law jurisdiction, Australian courts may exercise statutory jurisdiction. The laws governing jurisdiction are determined by individual states,[44] but are generally similar. A court is able to exercise statutory jurisdiction if the case has a sufficient connection to the court’s territory (generally a state of Australia), for example, if the case relates to:

A contract made or breached in the territory;
A tortious act committed in the territory, or a tort occurring in the territory (where the act and the tort can occur in different places, for example in defamation), or damage suffered in the territory regardless of where the tortious act occurred; and
Property (land) in the territory.

The statutory authority also grants jurisdiction if the person to be served (i.e. the defendant) resides in the territory, confirming common law jurisdiction.

The submission of a defendant will also allow the court to exercise its jurisdiction over that defendant. The defendant will be deemed to have submitted simply by taking part in the proceedings (unless the defendant is taking part only to the extent needed to contest jurisdiction). It can also be inferred if the defendant is party to a relevant contract containing a choice of forum clause.

Australian courts will generally recognise in a contract a clause specifying a choice of forum, however this will be subject to the court’s construction of the contract, as well as considerations of public policy. Thus, a choice of forum clause specifying a country wholly unrelated to either the parties concerned or the place where the contract is carried out may be overridden.[45]

3.5.1. Forum Non Conveniens

A person once served may argue that the court should not exercise its jurisdiction on the grounds that the court is a “clearly inappropriate forum” to hear the case; this is the doctrine of “forum non conveniens”. A court may find that it is clearly inappropriate if it would place an unfair burden on, be prejudicial to, or produce serious and unjustified trouble for a party. The application of this doctrine is a discretionary matter for the court – the court must firstly decide that it has the authority to exercise jurisdiction, and secondly decide whether another forum would be more appropriate.

“Forum shopping”, whereby a litigant seeks to have a case heard before a court because of some advantage offered, rather than any real connection to the court, has received the disapproval of Australian courts. When deciding on matters of jurisdiction, especially with regard to questions of choice of forum and forum non conveniens, the courts have often taken a position intended to restrict forum shopping.

3.5.2. Dow Jones v Gutnick

The above law concerning jurisdiction generally has since been brought to bear on the matter of Internet jurisdiction. In Dow Jones v Gutnick,[46] the leading Australian case on Internet jurisdiction, the High Court of Australia ruled that, when a defamatory article is published over the Internet, the tort of defamation occurs at the place where the article is downloaded and viewed, rather than the place from which it is uploaded, or the place which houses the server on which it is stored.

Importantly, the High Court did not view the Internet as an entirely new paradigm requiring sweeping changes to the laws of jurisdiction. Rather, the Internet was seen simply as another communication device, which could be governed by the existing laws.

3.5.3. Jurisdiction and Consumer Protection in the Trade Practices Act

Part V of the Trade Practices Act 1974 (Cth)[47] contains a number of provisions dealing with consumer protection, in particular, Division 2 of that part includes provisions implying a number of terms into the contract, such as (for example) an implied condition that goods sold by a corporation to a consumer are of merchantable quality, and an implied condition that bulk goods will match a sample. These provisions cannot be contracted out of in contracts with consumers.

Section 67 of the Trade Practices Act 1974 (Cth) provides that, where the proper law of a contract would be the law of Australia but for a choice of law term in the contract, the above provisions will apply notwithstanding that term.

[44] See for example schedule 6 of the Uniform Civil Procedure Rules 2005 (NSW) <http://www.austlii.edu.au/au/legis/nsw/consol_reg/ucpr2005305/sch6.html>.

[45] Akai Pty Limited v The People's Insurance Company Limited [1996] HCA 39, 23 December 1996, <http://www.austlii.edu.au/au/cases/cth/HCA/1996/39.html>

[46] Dow Jones & Co v Gutnick (2002) 210 CLR 575 <http://www.austlii.edu.au/au/cases/cth/HCA/2002/56.html>.

[47] <http://www.comlaw.gov.au/>





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