MACQUARIE BANK LIMITED & ANOR v BERG

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Defamation List

20247/99 MACQUARIE BANK LIMITED & ANOR v Charles Joseph BERG Judgment

HER HONOUR: 1 By summons filed on 26 May 1999 the plaintiffs, Macquarie Bank Limited ("MBL") and Andrew James Downe, seek an order restraining the defendant, Charles Joseph Berg, from publishing certain material on the Internet. The summons first came before B M James J who abridged the time for service and directed that service be effected by delivering a copy of the documentation on Messrs Hickson Wisewoulds (solicitors acting for the defendant in other proceedings between the parties) and by sending copies of the documents, marked for the attention of the defendant, to a specified email address. When the matter came before me on 28 May 1999 I was satisfied that the plaintiffs had complied with the directions as to service. Mr Dalgleish of counsel appeared, as a courtesy to the court, to acknowledge receipt of the documents by Hickson Wisewoulds. He did not appear for the purpose of representing the defendant and the matter proceeded ex parte. 2 It is convenient at this point to set out, as briefly as possible, the circumstances in which the application is made. 3 Some time before December 1997 MBL engaged the defendant to work in its business. Whether that engagement created a relationship of employer and employee is a matter of contention between the parties but is immaterial for present purposes. The relationship terminated in circumstances that gave rise to litigation in other courts. The defendant has commenced proceedings against MBL in both the Industrial Relations Commission of NSW ("IRC") and the Federal Court of Australia ("FCA"). MBL challenges the jurisdiction of the IRC. On 17 August 1998 an order was made for separate determination of that question. The defendant unsuccessfully appealed the order. There is no evidence as to when a hearing on the jurisdictional question might be expected. On 23 April 1999 MBL filed a summons in the Equity Division of this court claiming an order, under s 8 of the Jurisdiction of Courts (Cross-Vesting) Act 1987, that the IRC proceedings be removed to this court. Messrs Hickson Wisewoulds, although they are the solicitors acting for the defendant in the IRC proceedings, were instructed not to accept service of the summons. It has not been served on the defendant. MBL is also contemplating seeking a similar order in relation to the FCA proceedings, with a view to having all matters between the parties litigated in a single forum. 4 From at least January 1999 material relating to the relationship and the litigation has appeared on the Internet on a website the address of which is "www.brgvsmbl.com". The defendant's name appears prominently in the material which includes a document headed "Letter From Charles Berg". It is a reasonable inference that this material has been placed on the site by the defendant. No complaint is made about this publication. 5 However, since at least 24 May 1999, material has been appearing on another website the address of which is "macquarieontrial.com". This material, like the other, is transmitted to and can be received in NSW. It is the publication of this material that the plaintiffs seek to restrain. It is unnecessary to go into the detail of its contents. I am satisfied that the material on the site conveys imputations defamatory of each plaintiff. 6 While there is nothing in this material that specifically accepts or acknowledges that it is published by the defendant, there are sufficient similarities with that on the previously mentioned website to permit an inference that the defendant is also, if not the author, at the very least involved in and associated with its publication. 7 It is reasonably clear that the defendant is not present in NSW, and that any acts done by him that result in publication of the material in NSW are done from outside the state. The evidence as to his whereabouts suggests that he is in the United States of America. 8 A question of jurisdiction is therefore raised. There is authority that a court is empowered to restrain conduct occurring or expected to occur outside the territorial boundaries of the jurisdiction: Helicopter Utilities v Australian National Airlines Commission (1963) 80 WN) (NSW) 48 at 51; Dunlop Rubber Company v Dunlop [1921] 1 AC 367; Tozier and Wife v Hawkins (1885) 15 QBD 680. 9 Whether that power should be exercised is a question of discretion. Factors relevant to the exercise of the discretion include the potential enforceability of any orders made, and whether another court is a more appropriate forum: Helicopter Utilities (p 51). 10 Any order made by this court would be enforceable only if the defendant were voluntarily to return to NSW. He cannot be compelled to do so for the purpose of enforcement. Senior counsel for the plaintiff urged that, having regard to the litigation he has initiated in NSW, there is every prospect that he will return. If and when he does so he will immediately become amenable to the enforcement processes of this court that would be set in train in the event of disobedience of any orders made. Unenforceability should not, therefore, be seen as a factor contraindicating the grant of the relief sought. 11 I am not fully persuaded by this argument. It seems to me unsatisfactory to make orders the effectiveness of which is solely dependent upon the voluntary presence, at a time of his selection, of the person against whom the orders are made. The uncertainty of unenforceability is a factor adverse to the exercise of discretion in the plaintiff's favour. It is unnecessary further to consider this. There are other, more compelling, factors that militate against the making of the order sought. 12 The first and most significant of these concerns the nature of the Internet itself. No evidence was adduced to explain the mechanics of the operation of the Internet. It is reasonably plain, I think, that once published on the Internet, material is transmitted anywhere in the world that has an Internet connection. It may be received by anybody, anywhere, having the appropriate facilities. Senior counsel conceded that, to make the order as initially sought, would have the effect of restraining publication of all the material presently contained on the website to any place in the world. Recognising the difficulties associated with orders of such breadth, he sought to narrow the claim by limiting the order sought to publication or dissemination "within NSW". The limitation, however, is ineffective. Senior counsel acknowledged that he was aware of no means by which material, once published on the Internet, could be excluded from transmission to or receipt in any geographical area. Once published on the Internet material can be received anywhere, and it does not lie within the competence of the publisher to restrict the reach of the publication. 13 The consequence is that, if I were to make the order sought (and the defendant were to obey it) he would be restrained from publishing anywhere in the world via the medium of the Internet. 14 The difficulties are obvious. An injunction to restrain defamation in NSW is designed to ensure compliance with the laws of NSW, and to protect the rights of plaintiffs, as those rights are defined by the law of NSW. Such an injunction is not designed to superimpose the law of NSW relating to defamation on every other state, territory and country of the world. Yet that would be the effect of an order restraining publication on the Internet. It is not to be assumed that the law of defamation in other countries is coextensive with that of NSW, and indeed, one knows that it is not. It may very well be that, according to the law of the Bahamas, Tajikistan, or Mongolia, the defendant has an unfettered right to publish the material. To make an order interfering with such a right would exceed the proper limits of the use of the injunctive power of this court. 15 For this reason alone, I would refuse the order sought. 16 It may be that what I have said above expresses merely a technological update of a long standing line of authority concerning the discretion to restrain defamatory publications. Such a power is to be exercised with great caution, and only in very clear cases: Stocker v McElhinney (No.2) (1961) 79 WN (NSW) 541; Church of Scientology of California Inc v Readers Digest Services Pty Limited [1980] 1 NSWLR 344; Chappell v TCN Channel Nine Pty Limited (1988) 14 NSWLR 153. This, as I understand it, is largely for two reasons of principle. The first is that, while it may be relatively easy to establish, prima facie, that a publication is defamatory, the key to a defamation action very often lies in the defences advanced, and these cannot ordinarily be determined at the stage of an interlocutory injunction application. To restrain the publication would unduly override the rights of a publisher and pre-empt the resolution of legitimate issues which arise in claims for defamation. The second reason concerns the fundamental public interest in freedom of speech and freedom of information. An injunction will ordinarily not lie where it would have the effect of restraining discussion in the media of matters of public interest or concern: Chappell, p 158. 17 Contrary to the argument initially advanced (but, I think, abandoned) by senior counsel, the public interest in freedom of speech is not more deeply embedded in the protection of the publications of the organs of the mass media than in protection of publication by individuals. The courts will not be more reluctant to enjoin a publication by a media outlet than one by an individual. The fact that the publication the plaintiffs seek to restrain is publication by an individual and not a media outlet adds nothing to the plaintiffs' case. 18 Senior counsel placed heavy emphasis on the decision of Hunt J (as he then was) in Chappell. That was a case in which his Honour, having considered the history of, and the reasons for, the caution exercised in relation to applications for injunctions in defamation cases, nevertheless proceeded to make such an order. 19 In that case the statement of claim had been filed, and the imputations upon which reliance was to be placed had been formulated. The defendants, who were represented, had identified the defences upon which they proposed to rely. His Honour was therefore able to embark upon an examination of the defendants' realistic prospects of success in defending the defamatory imputations. A single focal issue emerged - whether the defendants would be able to show that publication of the material was on a matter of public interest. He held that it was not, and, in effect, that any other conclusion would have been untenable. There was therefore no impediment to granting the injunction. 20 In the present case, on the first day of hearing no statement of claim had been prepared, although senior counsel formulated the imputations which were to be pleaded. By the second day of hearing a statement of claim had been prepared, but not filed or served. Accordingly, the defendant had no notice of the precise imputations on which the plaintiffs proposed to rely, and was not in a position (even if he had appeared or been represented on the proceedings) to identify his defences, and therefore isolate the issues for determination. 21 Counsel for the plaintiffs referred also to National Mutual Life Association of Australasia Limited v GTV Corporation Pty Limited [1989] VR 747, but it does not seem to me that the judgments in this case advance the argument. The issue to be determined, and the principles to be applied, are clearly stated in Chappell. 22 Even leaving aside the considerations peculiar to publication on the Internet, I would not be satisfied that this is the kind of case that would attract injunctive relief. 23 Counsel put three other arguments in relation to the exercise of discretion. He argued that, having regard to the IRC and FCA litigation already commenced by the defendant, he has adequate alternative fora, in which he would have the benefit of absolute privilege, in which to make his assertions against the plaintiff. On the evidence before me, this argument rings very hollow indeed. Although the IRC proceedings were commenced in December 1997, by reason of MBL's challenge to jurisdiction there appears no imminent hearing on the merits. MBL has a perfect right to challenge jurisdiction, and it is no criticism to say that it has exercised that right; but having done so, it can hardly be heard to argue that the defendant has a forum in which to air his grievances. In any event, what he might be able to say in those proceedings will be limited to the issues properly raised thereby. I do not know what those issues may be, but he will not have free rein to make his criticisms of MBL. 24 Another matter argued by counsel was that freedom of speech does not extend to the freedom to engage in scurrilous abuse, and, properly analysed, that is what the material on the website amounts to. It is true that the content of the website is at times couched in strong language, and makes serious allegations against the plaintiffs. In the last few pages there are thumbnail sketches of a number of individuals apparently involved in the engagement between MBL and the defendant, and these are not only critical of some of those individuals, but are illustrated by reference, apparently, to notable characters from the world of entertainment. The illustrations are, apparently, designed to ridicule some of the individuals named. I am not persuaded that they, or any other parts of the publication warrant the epithet "scurrilous". 25 It may be that, if and when the defamation proceedings come to a hearing, a judge will conclude that the publication is defamatory, is not protected by any of the defences available under NSW law, and is so serious as to result in a large award of damages. That possibility, of itself, does not militate against the application of the principles stated in Chappell. 26 A final argument was that there is material to suggest that the defendant is impecunious. This arises from assertions in the published material that MBL, by its conduct of the litigation, has exhausted the defendant's funds. Whatever the cause of his impecuniosity, the argument was, it is likely that he would be unable to meet any award of damages ordered. 27 The order I make is that the application for interlocutory injunction is refused.

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