Australia: The difficult tort of injurious falsehood – Gail Noe

21 07 2013

gazetteInjurious falsehood has enjoyed a resurgence in recent times, often pleaded alongside defamation … But as Gail Noe points out, it’s notoriously difficult to establish

Despite being described as a “rare and anomalous” tort, injurious falsehood has undergone a resurgence in popularity in recent times.

It is often raised as an alternative to defamation or misleading and deceptive conduct claims.

However, injurious falsehood claims are rarely successful due to the difficulty of proving the four essential elements of the tort – falsity, publication, malice and actual damage.

Failure to prove any one of these elements is fatal, so it is hardly surprising that many injurious falsehood claims fail.

Keith Bradley & Anor v Min Li Wu
image

Canberra solicitor Keith Bradley (pic) and his law firm Bradley Allen Lawyers acted in proceedings in the NSW Supreme Court on behalf of Min Li Wu’s daughter.

They claimed that Wu defamed them by holding a placard in the street outside the building where they practiced, and showing it to and speaking to passers-by.

The placard said that the lawyers had “swindled money” from the daughter and demanded they give back over $100,000.

In addition, the lawyers claimed that Wu had publicly displayed signs, placards and banners and distributed pamphlets almost every day in the vicinity of their building that included allegations of overcharging and overservicing and suggestions that the defendant could not obtain justice because the plaintiffs were lawyers.

The lawyers sued for defamation and injurious falsehood seeking damages, and an injunction restraining the defendant from publishing any statement suggesting that they had taken any money from her, or her daughter, to which they were not entitled.

Wu admitted displaying various signs but denied making any defamatory or false allegations, denied malice, claimed that her publications were true, an honest opinion and fair comment and denied the lawyers had suffered any loss or damage.

The lawyers sought summary judgment on the injurious falsehood claim. To succeed, they had to show that there was no defence to the claim or no need for a trial.

In this case there was no issue about publication, but there were issues as to falsity, malice and actual damage.

The summary judgment application failed, primarily because the plaintiffs failed to prove actual damage.

Beyond that, the court was not satisfied that the lawyers would inevitably succeed on the issue of falsity or that malice had been adequately established.

In the court’s view, the truth or falsity of the assertions made by Wu and whether she had a genuine belief in the truth of her assertions ought to be determined at trial – rather than on application for summary judgment.

Judgment in full

Seafolly Pty Ltd v Leah Madden

Seafolly and Leah Madden were competitors in the women’s swimwear market. Madden made certain public statements which suggested that Seafolly had copied and marketed some of her designs.

imageSeafolly sued for misleading and deceptive conduct, injurious falsehood and for copyright infringement.

Madden cross-claimed for defamation and for misleading and deceptive conduct based on statements made in press releases by Seafolly.

Although Seafolly succeeded on some of its claims, the injurious falsehood claim failed.

Seafolly was able to establish the first three elements of the tort – Madden was found to have made false statements that Seafolly had copied her designs and had sent a Ms McLaren to photograph her garments, the statements were published to a number of third parties and Madden had acted maliciously.

Seafolly’s principal difficulty was its inability to adduce evidence which established any actual damage caused to Seafolly’s business which could be attributed to Madden’s false statements.

Judgment in full

Vivienne Dye v Commonwealth Securities Limited & Ors

Vivienne Dye was a Commonwealth Bank employee.

In 2008, daily newspapers in Sydney, Melbourne and Brisbane published allegations by Dye that two former senior bank officers had sexually harassed her.

The bank responded publicly that the allegations raised by Dye had been fully investigated, that it was satisfied they were unfounded, and that she had only made them when her work performance had been declared unsatisfactory.

Dye brought proceedings making claims of sexual harassment, discrimination on the grounds of sex, disability discrimination, victimisation, breach of contract, breach of industrial legislation, misleading and deceptive conduct, injurious falsehood and defamation.

Each of her claims was found to be without any factual foundation or legal substance and was rejected.

Dye’s injurious falsehood claim was described as misconceived from the outset failing every test on the facts.

In particular, she failed to prove falsity, malice and actual damage.

Bryan McMahon v John Fairfax Publications Pty Limited & Ors

Sydney solicitor Bryan McMahon sued for defamation and injurious falsehood over an article published in The Australian Financial Review.

The proceedings were tried with a jury, which considered both the defamation and injurious falsehood claims.

The effect of the jury’s answers was that the claim in injurious falsehood was not made out because McMahon failed to prove malice on the part of the journalists.

Neville Mahon v Mach 1 Financial Services Pty Ltd

Neville Mahon, a property developer, wanted to stop the publication of a large number of emails about him and his business dealings on two “wikifrauds” websites.

He obtained urgent interlocutory relief restraining the defendants from maintaining the websites or publishing similar material, requiring them to shut down the websites and to have links to the websites removed from specific internet search engines.

After obtaining the injunction, Mahon filed a statement of claim pleading causes of action in both injurious falsehood and defamation.

The defendants then sought to have Mahon’s pleading struck out, principally on the basis that it did not plead any actual damage sustained by Mahon.

imageInitially, Justice Lucy McCallum (pic) refused to strike out the pleading on the basis that a claim in injurious falsehood could be maintained without proof of actual damage where (as in this case) an interlocutory injunction had been granted preventing the very damage which might otherwise have ensued.

However, Justice McCallum required Mahon to provide proper particulars to prove that actual damage would have been suffered but for the granting of the interlocutory injunction.

Justice McCallum heard further argument as to whether the pleading disclosed any cause of action in injurious falsehood. (By the time the particulars were provided the defamation claim had been abandoned).

In light of the particulars, Justice McCallum concluded that Mahon’s claim was in truth a defamation claim brought under the guise of an injurious falsehood claim.

It was “a transparent device to obtain a permanent injunction” which would not ordinarily be available to restrain a defamatory publication due to the overriding public interest in freedom of speech.

The injurious falsehood claim was struck out and the injunction dissolved.

Gail Noe is a solicitor and former barrister.

This post originally appeared in the Gazette of Law and Journalism, Australia’s leading online media and law publication.


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23 05 2016
5 media law issues you ought to know in Australia | Media Survival – Australia & New Zealand

[…] Furthermore, corporations may still be able to sue you for something else – such as injurious falsehood. […]

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