AUSTRALIA -- Mallesons Stephen Jaques
American Bar Association
Transnational Jurisdiction In Cyberspace Project
Comments - Australia
prepared by
Mallesons Stephen Jaques
Solicitors
Sydney, Melbourne, Brisbane, Perth, Canberra, Hong Kong, London
November 30, 1999
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Question 1. What is the jurisdictional relevance of the presence
on a state’s territory of the Internet network infrastructure,
such as a server?
1.There are no decided cases or national legislation dealing with
this exact issue in Australia.
2.Where a defendant is located outside of Australia, the
existence of a server in Australia may be sufficient to provide
the Australian court with personal (adjunctive) jurisdiction.
See paragraph 2.7 above.
3.Many Australian laws explicitly require a nexus with Australia,
but this nexus is often described generally in the legislation.
The legislation in question must be considered to determine
whether network infrastructure provides sufficient
jurisdictional nexus.
4.Some Australian laws indirectly deal with the jurisdictional
relevance of network infrastructure, as set out below.
Federal Laws and Bills
Electronic Transactions Act 1999
5.The Electronic Transactions Act 1999 (Cth) ("ETA") contains
a provision which indirectly deals with the jurisdictional
relevance of the presence of Internet network infrastructure on
a state’s territory. The ETA is designed to facilitate the
development of electronic commerce in Australia, whether
occurring over the Internet or via other media, by "removing
existing legal impediments that may prevent a person using
electronic communications to satisfy obligations under
Commonwealth law". The ETA is limited in its application:
a.prior to 1 July 2001, to laws of
the Commonwealth specified by
regulation; and
b.after 1 July 2001, to laws of the
Commonwealth other than those
exempted under the ETA or by
regulation.
6.Legislators believe that the Australian federal government
does not have power under the Australian Constitution to
regulate electronic commerce occurring within each State and
Territory. Accordingly, the Australian federal government
envisages that each Australian State and Territory will enact
mirror legislation to give effect to the ETA reforms throughout
Australia. The Australian State and Territory governments
have provided agreement in principle to this arrangement.
7.The ETA was passed by the Australian House of
Representatives after extensive amendment on 30 September
1999, and was passed by the Senate on 25 November 1999. It
is expected to come into effect within the next six months.
8.Section 14 of the ETA sets out default rules governing, among
other things, the place of dispatch and receipt of electronic
communications in the absence of agreement to the contrary
by the parties. Under section 14(5), for the purposes of a law
of the Commonwealth, an electronic communication is taken
to have been:
a.dispatched at the place where
the originator has its place of
business; and
b.received at the place where the
addressee has its place of
business.
9.If either party has more than one place of business, then
section 14(6) provides that:
a.if one of those places of business
has a closer relationship to the
underlying transaction, that place
of business is the relevant place
of business for the purposes of
section 14(5); and
b.if none of those places of
business has a closer relationship
to the underlying transaction,
that party’s principal place of
business is the relevant place of
business for the purposes of
section 14(5).
10.If a party to an electronic communication does not have a
place of business, then that party’s place of business for the
purposes of section 14(5) is the place where that party
ordinarily resides (s14(6) ETA).
11.As explained in the Explanatory Memorandum to the ETA,
these default rules reflect the fact that "the physical location
of information systems is often irrelevant to the use and
purpose of the electronic communication." Reasons for this
include that:
a.an information system can be in
a different place to where the
parties to that communication
are located; and
b.it is often easier to determine
the place of business or
residence of a party to an
electronic communication than to
determine the location of an
information system from which
that communication was sent or
received.
12.Accordingly, the default rules for determining the place where
an electronic communication is sent or received focus on the
connection between the parties to an electronic
communication and the place where that communication is
taken to have been sent or received, rather than focusing on
the physical location of the information system from where
that electronic communication was sent or received.
13.For the purposes of transactions under Commonwealth laws,
the presence on a state’s territory of the Internet network
infrastructure will be of little relevance to determining the
jurisdiction applicable to transactions which take place over
the Internet.
Copyright Amendment (Digital Agenda) Bill 1999
14.The Copyright Amendment (Digital Agenda) Bill 1999 (Cth)
("CAB") deals with the liability of communications carriers and
Internet service providers ("ISPs") for copyright infringements
facilitated by use of their network infrastructure or services.
15.The CAB aims to limit the liability of carriers and ISPs for
authorising copyright infringement by, among other things,
providing that carriers and ISPs will not be consider to have
authorised a copyright infringement simply by providing
physical facilities used to infringe the copyright.
16.Under the CAB, the following factors must be considered when
determining whether a person has authorised copyright
infringement:
a.power to prevent an infringing
act;
b.the relationship between the
person and the infringer; and
c.whether the person took
reasonable steps to prevent or
avoid the infringing act.
17.Accordingly, the CAB makes the mere provision of Internet
network infrastructure alone in Australian territory irrelevant in
relation to copyright infringement cases. However, if a carrier
or ISP becomes aware of acts of copyright infringement in
Australia facilitated by use of their Internet network
infrastructure, then that carrier or ISP may, under the CAB, be
taken to have authorised those infringing acts if they have
power but fail to take reasonable steps to prevent the
continuance of those acts. In these circumstances, the
provision of Internet network infrastructure in Australia may
become relevant to the exercise of prescriptive jurisdiction by
the Australian government over foreign carriers and ISPs.
18.The CAB was introduced into Australia’s House of
Representatives on 2 September 1999, but has not yet been
passed by either House of Parliament. Accordingly, it is not
yet law in Australia.
Case law
19.We are not aware of any Australian case law which discusses
the jurisdictional relevance or otherwise of the presence of
Internet network infrastructure on a State’s territory.
20.There are a number of decisions in the United States ("US")
that deal with this issue. It is likely that the US decisions will
have some influence when this issue comes to be considered
by Australian courts. See Bernadette Jew, "Cyber Jurisdiction –
Emerging Issues & Conflicts of Law when Overseas Courts
Challenge your Web" (1998) Computers & Law 24.
21.Despite some conflicting decisions in the US, it appears to us
that a general principle has emerged from the US authorities,
namely, that the presence on a state’s territory of Internet
network infrastructure is not a conclusive factor in determining
the appropriate jurisdiction in relation to activities conducted
over the Internet. We understand that this principle has also
been applied in the decisions of courts in other countries,
including the United Kingdom and Japan.
22.Commentators have stated that there may be confusion and
injustice if a court attempted to exercise jurisdiction in
Internet cases over persons based on the physical location of
the Internet network infrastructure. For example:
a.The information accessed by an
Internet user via a web site may
be sourced from many different
locations, which can be
impossible to determine. For
example, this information may be
from the original web site hosted
on a server in one location, a
mirror web site hosted on a
server in another location, cached
material stored on an Internet
service provider’s server in yet
another location or the user’s
hard drive, or a combination of
these.
b.If the location of the Internet
network infrastructure was
determinative of jurisdiction,
Internet users could use that fact
to manipulate the jurisdiction in
which an activity is deemed to
occur to circumvent laws and to
choose the jurisdiction most
favourable to them. For example,
an Australian vendor selling
Australian goods to an Australian
purchaser for use in Australia
could operate its online business
from a computer system located
in a country with less stringent
trade consumer protection laws
to avoid liability under the
Australian Trade Practices Act
1974 (Cth).
Question 2. What is the jurisdictional relevance of
maintaining a web site?
23.As in relation to many other issues regarding jurisdiction and
the Internet, there is currently little guidance either in
Australian legislation or in Australian case law regarding the
jurisdictional relevance of maintaining a web site. The first
and only Australian decision that considered this issue was
handed down in June 1999. This was the decision of a single
judge of the Supreme Court of New South Wales, and whilst it
is authoritative, it is not binding on the courts in other
Australian States and Territories or on any higher courts. In
short, the Australian position on the jurisdictional relevance of
maintaining a web site remains largely untested.
24.The sole Australian decision regarding jurisdiction on the
Internet is Macquarie Bank & Anor v Berg, handed down by
Simpson J of the New South Wales Supreme Court on 2 June
1999.
25.This case related to the alleged defamation of Macquarie Bank
("MBL") and Andrew Downes by the publication of certain
material on a web site thought to be operated by the
defendant. Court proceedings had already been commenced by
the defendant against the plaintiffs in relation to MBL’s
termination of the defendant’s employment. Since May 1999,
material containing defamatory imputations about the
plaintiffs had been published on a web site. The court inferred
that the defendant was associated with the publication of this
material.
26.The plaintiffs sought an injunction to prevent the defendant
from publishing the defamatory material on the web site in
question. On the available evidence, the defendant was
believed to be in the US, and any acts done by him that
resulted in the publication of the defamatory material on the
web site were done outside of New South Wales.
27.Simpson J held that, while a court is empowered to restrain
conduct occurring or expected to occur outside the jurisdiction,
whether the court should exercise that power is a question of
discretion. In determining whether or not to exercise this
discretion, the court had to consider factors such as whether
there is a more appropriate forum and the enforceability of
any order made.
28.In refusing to grant the injunction sought, Simpson J held that
it would "exceed the proper limits of the use of the injunctive
power of the (New South Wales) court." Counsel for the
plaintiffs had conceded that he did not know of any means by
which operation of the injunction could be limited to New
South Wales. Accordingly, Simpson J found that the
consequence of granting an injunction in the terms sought
would restrain the defendant from publishing the relevant
material anywhere in the world via the Internet. Such an
injunction would go beyond its purpose of ensuring compliance
with the laws of the state of New South Wales and protection
of the plaintiffs’ rights as they are defined under the law of
New South Wales. Further, it would interfere with any rights
that the defendant may have to publish that material in
another jurisdiction. Simpson J also found that it would be
difficult to enforce the injunction while the defendant
remained outside of New South Wales.
29.Simpson J’s decision asserts that maintenance of a web site
that is accessible in a particular jurisdiction does not of itself
give the courts jurisdiction over the defendant in that
jurisdiction. On the facts in the Macquarie Bank case, the
alleged acts of defamation involved posting of information on
"passive" web site. However, Simpson J did not apply the
sliding scale test that has been proposed in some US cases in
analysing the jurisdictional issue.
30.Simpson J’s decision relied in part on the assumption that the
prohibition on publication and dissemination of the
defamatory material could not be limited to New South Wales.
However, this factor alone is not sufficient reason for a court
to decide that it does not have jurisdiction over a foreign
defendant. If Australian courts refuse in all Internet cases to
exercise jurisdiction over a foreign defendant on the basis
that the operation of a court order cannot in practice be
limited to a particular jurisdiction, then Australian courts
would only exercise jurisdiction over such foreign defendants
in very limited circumstances. In turn, this would provide an
opportunity for foreign defendants to carry on activities that
would be otherwise illegal in Australia by conducting them
online. It is therefore important that Australian courts do not
exclude their jurisdiction too readily on this basis.
31.As mentioned above, Macquarie Bank is the decision of a
single judge of a New South Wales court, and is not binding
on higher courts or courts in other Australian States or
Territories. Accordingly, the Australian position on the
jurisdictional relevance of maintaining a web site remains
uncertain.
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Question 3. If a web site author cannot prevent access to
its site from any country, what is the jurisdictional effect of
a geographic disclaimer on the site?
51.We are not aware of any law dealing with this topic in
Australia.
52.A geographic disclaimer may show an intent to deal only with
Internet users in a particular country.
53.However, if other circumstances exist, a geographic disclaimer
may be given little weight by Australian courts when
considering jurisdictional questions. For example, if a
Canadian website stated "Intended for Canadian residents
only", but the website owner sent email advertisements for
the site to Australian users, or sold goods across the website
to Australian consumers, or in other ways targeted Australian
residents, the geographic disclaimer is likely to be of little
effect.
54.A number of Australian websites have jurisdictional
disclaimers, which suggest that legal advisers in Australia are
recommending their use.
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Mallesons Stephen Jaques