Australia's high court has ruled that the financial publishers Dow Jones can be sued in the Australian state of Victoria over an article that appeared on their website.

The defamation case was brought by Melbourne mining magnate Joseph Gutnik, who argued that the article could be read on the internet by people who knew him in Melbourne.

It will certainly be re-established that the net is no different than a regular newspaper Joseph Gutnik

Dow Jones had argued that publication of the article on its Barron's website took place in the United States and wanted the case to be heard there.

It is thought to be the first such decision in the high court of any country to consider the question of jurisdiction and the internet.

Media organisations fear the ruling could unleash a flood of litigation around the world and will force them to review the content of their internet sites.

Dow disappointed

Mr Gutnik was delighted by the ruling.

"It will certainly be re-established that the net is no different than a regular newspaper, that you have to be careful what you write and if you offend somebody or write malicious statements about people... then you can be subject to being prosecuted," he said.

It would have a chilling effect because publishers would face potential liability everywhere the web reaches Defamation lawyer Damian Sturzaker

Dow Jones had maintained that publication took place in New Jersey in the US and argued that courts in the State of Victoria had no jurisdiction.

Several international media companies who also made submissions to the court - such as Reuters, News International and Amazon.com - backed up that position.

Litigation laws in the US are less strict than those in Australia and publishers can also defend themselves with the First Amendment on freedom of speech.

"The result means that Dow Jones will defend those proceedings in a jurisdiction which is far removed from the country in which the article was prepared and where the vast bulk of Barron's readership resides," a statement from Dow Jones said.

'Spiderweb'

The decision opens the way for any international news organisation to be sued in the Australian courts, even by plaintiffs who are not resident in Australia.

The ruling is also likely to affect other areas such as contempt of court rulings.

Defamation lawyer Damian Sturzaker said it created "a spiderweb of potential litigation, where you have a single publisher in the centre and strands running to every jurisdiction that adopts this standard, each one a potential lawsuit with different standards of evidence and different defences".

"It would have a chilling effect because publishers would face potential liability everywhere the web reaches."

But the high court said that lawsuits would only be brought in places where the person bringing the case had a reputation to defend.

"In all except the most unusual of cases, identifying the person about whom material is to be published will readily identify the defamation law to which that person resorts," it said.