Since the statutory abolition of specific corporations being able to sue in defamation, claims for damages to business reputation are now commonly brought under the guise of injurious falsehood, negligent misstatement, misleading or deceptive conduct or other specific causes of action. As a result, this publication considers injurious falsehood, the civil and criminal aspects of defamation and also misleading and deceptive conduct.

INJURIOUS FALSEHOOD AND CIVIL DEFAMATION 

Injurious falsehood is usually used in cases involving commercial interests for a company or business. Essentially, it involves a malicious intent by way of a false statement so as to induce others to think or act in a way that causes harm to the defamed company or business.

In contrast, defamation is a tort, or civil wrong, which occurs when defamatory material is published that could injure the reputation of an individual by exposing them to ridicule, contempt or hatred, cause people to shun the individual or lower the individual’s estimation by right thinking members of society.

In Queensland, the Defamation Act 2005 (Qld) encompasses and promotes defamation as against freedom of expression. It also provides effective and fair remedies of those defamed and promotes the speedy and non-litigious methods of resolving disputes about defamatory matter.

The distinction between defamation and injurious falsehood was exposed in Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 694 by Gleeson CJ: 

The tort of defamation protects reputation, and it does so in a manner that involves a balancing of various considerations including the right of free speech. The tort of injurious falsehood protects against provable economic loss resulting from false and malicious statements.

Essentially, in order for an injurious falsehood action to succeed, four elements must be proved:

1. a false statement of, or concerning, the plaintiff’s goods or business; and
2. publication of that statement by the defendant to a third person; and
3. malice on the part of the defendant; and
4. proof by the plaintiff of actual damage (which includes loss of business) suffered as a result of the false statement.

Subsequently the person alleging injurious falsehood has the onus of proof to establish all the necessary elements of injurious falsehood (that is the falseness of the material, publication of the material with malice and actual damage suffered) or the claim will fail. In considering ‘malice’, case law and Halsbury’s Laws of Australia (Vol 10) is suggestive that a person who acts in good faith cannot be found liable. It is a matter of motive as opposed to intent to cause injury. That is, malice can exist without having the intent to cause actual damage, which can flow from, or be the natural and probable result of, the malicious statement. Malice is subsequently inferred in situations that can include whether the defendant had knowledge of the falsity of the statement, acted with reckless indifference to the publications truth/falsity or alternatively acting with the intention to injure another entity without just or probable cause.

On the other side, in order for a defamation action to succeed, three elements must be proved:

1. the communication must be published to a third person; and
2. the communication must identify (or relate to) the plaintiff; and
3. the communication must be defamatory.

For the first element in a defamation case, that is publication, it can include written, oral or pictorial matter and the intention of the publisher is inconsequential unlike an injurious falsehood claim which requires malice. For the second element, the information must either name the plaintiff or be sufficient for another party to identify the plaintiff. Lastly, the test for defamatory matter is whether the communication lowers or harms the plaintiff’s reputation, holds the plaintiff up to ridicule, or leads others to shun and avoid the plaintiff. This is determined from the view of ordinary reasonable people in the community and in light of community standards. The plaintiff also does not have to prove that the imputation is false or that it caused actual harm. Also, mere hurt or upset to a plaintiff does not imply that the publication is defamatory. Instead, it must affect their reputation in a damaging way.

In both causes of action, the primary remedy is damages so as to compensate the harm or injury. Alternatively, injunctive relief is another remedy which is available although much less common in defamation proceedings. Injunctions are usually granted where there is a risk or threat of republication.

LIMITATION OF TIME – INJURIOUS FALSEHOOD & CIVIL DEFAMATION

Under s 10AA of the Limitations of Actions Act 1974 (Qld) (“LOAA”) a person is required to commence defamation action within 12 months from the date of the publication. In that regard, it should be noted that this limitation cannot be extended merely by issuing a Concerns Notice under s 14(2) of the Defamation Act 2005 (Qld)

Where the defamatory statements are made outside the limitation period, s 32A of the LOAA provides that a person may apply to the Court for an order to extend the limitation period. For that purpose, it will be necessary for the person to prove that it was not reasonable for the plaintiff to have commenced action within the 12-month limitation period from the date of publication.

Unlike defamation, an in injurious falsehood claim must be commenced within six (6) years of the publication of the defamatory material as set out by s 10(1)(a) of the LOAA.

CRIMINAL DEFAMATION

Notwithstanding defamation as a civil cause of action, a Queensland Legal Practitioner should always take note of s 365 and 228 of the Criminal Code Act 1899 (Qld) (“CCA”). This is especially important in a lot of cases of defamation although commonly overlooked by legal practitioners. For that reason, it is not a surprise that less people are being prosecuted under s 228 and 365 of the CCA every year.

Section 365 of the CCA sets out that it is an offence when a person, without lawful excuse, publishes matter defamatory of another living person, knowing the matter to be false and intending it to cause serious harm to the person. Any person who engages in such conduct faces a maximum penalty of 3 years imprisonment.

Section 228 of the CCA sets out that any person who knowingly, and without lawful justification or excuse distributes obscene printed or written matter is guilty of a misdemeanour offence and is liable for up to 2 years imprisonment.

Each of the above offences are crimes of misdemeanour, chargeable by indictment and attracting potential prison terms. They also require the Queensland Police Service (“QPS”) to investigate the alleged offence.

MISLEADING OR DECEPTIVE CONDUCT

Under the Australian Consumer Law, businesses or individuals can consider taking court proceedings in an effort to obtain injunctive relief, an apology and correction of defamatory material. They can also seek damages.

Under s 18, sch 2 of the Competition and Consumer Act 2010 (“C&CA”) businesses or individuals cannot engage in conduct that is characterised as misleading or deceptive. Further, under s 29 of the C&CA, businesses or individuals are prohibited from making false or misleading representations about goods or services in the course of trade or commerce.

Businesses or persons that are involved in the above conduct are at risk of legal action against them by other entities, including the Australian Competition and Consumer Commission (“ACCC”) and Office of Fair Trading (“OFT”).

It should be noted that an action based on misleading or deceptive conduct must be brought within 6 years of the accrual of the cause of action pursuant to ss 236(2) and 237(3) of the C&CA.

CONCLUSION

Injurious falsehood is distinguishable to defamation. An Australian Legal Practitioner subsequently should explore the available options for the client although should be cautious in advising a client on which cause of action is most appropriate in all the circumstances of the case. Exploration of other common causes of action including misleading and deceptive conduct is also a good point of reference as it enables a client to commence action through independent statutory bodies including the ACCC and OFT therefore potentially reducing legal costs.

If you feel that you or your company has been defamed, you should reach out to an Australian Legal Practitioner that specialises in civil litigation.

Disclaimer: This publication is not intended to be comprehensive nor does it constitute legal advice. Although attempt is made to ensure the information is current, there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication.