Nope – I can't find Federal jurisdiction in the cloud

The Federal Court has jurisdiction to hear defamation cases in certain circumstances, and defamation is included in the Federal Court National Practice Areas, under the "Other Federal Jurisdiction" heading. From a forensic perspective, the Federal Court may be viewed as having advantages with the ability to seek preliminary discovery, and good prospects of a judge only trial for a plaintiff.

To secure federal jurisdiction, the matter must be one that arises under a federal law (eg. via section 9(3) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) if it can be pleaded that publication occurred in the ACT or NT), provided that the claim is not colourable). Alternatively, a plea of the implied freedom of political communication can provide jurisdiction.

A recent case of Tucker v McKee [2021] FCA 828 identifies the legal and evidentiary considerations that arise in addressing the question of federal jurisdiction. It also provides a timely reminder that publication of a defamatory statement takes place where the material is heard or read. The location of a cloud server or other server is not enough to identify where a defamatory publication has been published – or even whether it has been published at all.

Mr Tucker sues over an email

Tobias Tucker was a solicitor who was dismissed from his employment with the State Revenue Office (SRO) of Victoria, following investigations into allegations of workplace misconduct made against him.

Mr Tucker alleged that he had been defamed in an email of 9 June 2017 (the Email) which had outlined several issues of significant concern regarding his conduct and which recommended that a formal investigation be conducted in relation to the allegations. He filed a defamation claim in the Federal Court (Melbourne Registry) taking issue with a number of alleged defamatory imputations.

In general terms, Mr Tucker claimed that the Email effectively imputed that he had stalked and been a threat to a female SRO employee, and used his position within the SRO to breach the privacy of certain taxpayers.

The initial Statement of Claim (SOC) alleged publication in Victoria only and did not plead imputations drawn from a federal statute. Amendments were subsequently made to the SOC to add allegations of breach of clause 21 of the Victorian Public Service Enterprise Agreement 2016 (VPSEA) and breach of section 50 of the Fair Work Act 2009 (FW Act). Mr Tucker also claimed that the sending of the Email to Maddocks Lawyers and to Lisa Klug at Worklogic Pty Ltd was relevant to jurisdiction because these entities operated nationally across Australia and had offices in various States and Territories, including the ACT.

The SRO denied that the email carried the alleged defamatory imputations and took issue with jurisdiction, also arguing that the claim should also be rejected as colourable (in the sense of it being raised only for the purpose of enlivening the Court’s jurisdiction).

The Federal Court upheld the SRO's challenge, found it lacked jurisdiction and dismissed the proceedings, ordering Mr Tucker to pay the SROs costs.

What is a "matter" that arises under federal law?

In order to file proceedings in the Federal Court, the matter (justiciable controversy between parties) must first be one that arises under a federal law: section 39B(1A)(c) of the Judiciary Act 1903 (Cth) – as previously explained in detail by Justice Allsop (as the Chief Justice then was) writing extracurially in the article Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002 (2002) 23 Aust Bar Rev 29). Recent cases such as Humphrys (Tobin) v Chief Executive Officer of Department of Communities WA [2021] FCA 586 and Somasundaram v Luxton [2020] FCA 1076 are also useful references.

Jurisdiction cannot be conferred simply by the consent of the parties.  Once a “matter” can be said to “arise under” a law of the Parliament (eg. if an asserted right, duty or obligation in issue owes its existence to a federal law or depends upon federal law for its enforcement), the Federal Court is then vested with jurisdiction to hear the whole of the dispute.

The Federal Court also has original jurisdiction to hear a “pure” defamation action (that is, without the addition of any other cause of action or defence arising under a federal statute) where the publication involves consideration of the implied constitutional freedom of communication on governmental and political matters even if it is contended that the implied constitutional freedom will be raised by a respondent by way of defence.

Mr Tucker claimed that his proceeding raised a federal matter because the FW Act formed part of the substratum of facts to his dispute and his termination was effected under cl 21 of the VPSEA (although he conceded that the court would not be required to construe the terms of the VPSEA or the FW Act to find a breach or not. Rather, he claimed that a reasonable observer would understand that the subject email conveyed imputations that he had breached the VPSEA and consequentially the FW Act).

The SRO argued that there was no right or duty in issue that "depends upon federal law for its enforcement" or "owes its existence" to federal law. It submitted that federal law was merely incidental or tangential to one of the many alleged imputations and the remote connection between the alleged defamatory imputations in the Email and the FW Act did not bring federal law into the proceeding. The use of a passing reference to the FW Act to found federal jurisdiction was therefore alleged to be colourable.

If it's a colourable jurisdiction claim it's out

The court agreed that the claim was an artificial attempt to invoke jurisdiction and was thereby colourable. It described the derivative imputation said to be conveyed by the express reference to a possible breach of the VPSEA as being "only capable of being so distilled by the ingenuity of a lawyer in search of a grievance" (Mr Tucker).

Was the alleged defamatory content published outside the State of Victoria?

The attempt to argue federal jurisdiction based on possible publication in the ACT failed. The evidence from those who investigated the complaints and who transmitted or received the Email was to the effect that they sent or received/read the email while in the State of Victoria.  None of the witnesses said they had accessed, downloaded or distributed the Email while they were outside Victoria.

Mr Tucker also submitted that once the Email was sent to external professional services firms (WorkLogic and Maddocks), it would be uploaded onto an electronic document management system and, at that point, became accessible all throughout Australia. This attempt to establish publication outside of Victoria also failed. Whether or not the Email could be theoretically accessed outside the State of Victoria did not answer the question of whether it was in fact accessed.

While employees of the SRO were subject to a policy that required them to upload documents to the document management system, none of the relevant employees could recall doing so at any stage and there was no evidence to suggest that occurred. Similarly, with Maddocks, there was no evidence that the Email had been uploaded to an internal server within Maddocks or, more importantly, downloaded or read by an employee of the law firm other than the firm's direct contact point (Melbourne). There was also uncontradicted evidence that the Email had not been sent, copied, forwarded, shared, shown, published or republished or distributed to any other solicitor at Maddocks. In the case of WorkLogic, it simply did not conduct business from an office in the ACT.  Ms Klug's evidence was that she kept the matter confidential and given the sensitivity of the matters raised, did not send, copy, blind copy, forward, share, show, publish, republish, or distribute any emails relating to this matter to any staff member at WorkLogic. While Ms Klug conceded that she had travelled outside of the State of Victoria on occasion, it was for the purpose of vacation and her evidence was that she did not read her work emails while on holiday.

Mr Tucker failed to adduce any evidence to support the proposition that the Email was downloaded and/or read anywhere other than in the State of Victoria. The court noted that "Mr Tucker’s submission that mere storage on a server accessible outside the State of Victoria is sufficient to constitute publication interstate, and thereby attract jurisdiction, is misconceived. It is not the storage but the downloading of the document which constitutes publication, and it is the publication of the document which creates the substantive right to bring a claim and is relevant for present purposes".

The mere act of storing a document on a cloud or server did not of itself constitute publication in this case, especially in the absence of any evidence that the document was uploaded to a server at either the SRO, Maddocks or WorkLogic, let alone downloaded or read.

In the circumstances, it was not necessary for the court (nor was it prepared to) opine generally on what constitutes publication outside a particular state or territory in the context of the storage of an electronic document on a database, such as a “cloud” or other server, of an allegedly defamatory statement contained in an email.

Whether the act of storing a document containing a defamatory statement on a particular database may be sufficient to infer publication to an audience outside a State or Territory will be a fact-specific inquiry in each matter. The court suggested that the inclusion of a defamatory imputation in an article available to subscribers to a national newspaper may be such an instance, adding, however that "even in that context, merely making available the defamatory material on a platform available to online subscribers does not constitute publication" for the purposes of defamation.

Just because something is made available electronically does not mean that it has been downloaded – something that a number of recent have exemplified. For example, in Courtney v Pinnacle Media Group Ltd & Ors [2021] QSC 91 Justice Martin noted that "A critical element of the tort of defamation is the publication of the alleged defamatory article. The publication of alleged defamatory matter on the internet occurs where the recipient downloads the material, not where the publisher uploads the material. See Dow Jones & Company Inc v Gutnick".

UPDATE: A Notice of Appeal was filed by Mr Tucker on 12 August 2021.