Australia has seen an increase in the number of disputes involving parties alleging that there has been a breach of an obligation of ‘good faith’ that has resulted in loss or damage.
Causes of Action - Injurious Falsehood
Table of Contents
Injurious falsehood protects businesses, traders and others from suffering economic loss caused by false and malicious statements made about their property or business.
Historically, injurious falsehood existed as a cause of action dealing with situations in which a business made publications that harmed another rival business. Prior to the introduction of the Defamation Act 2005 (Qld), injurious falsehood was a relatively uncommonly used cause of action, as a party who had suffered loss as a result of a false publication would primarily pursue a cause of action in defamation (previously libel and slander).
Since 2006, and in response to the development of social media, injurious falsehood has re-emerged, and cases alleging injurious falsehood are becoming more prominent.
Difference between injurious falsehood and defamation
Injurious falsehood bears a resemblance to the tort of defamation, as both involve a false and harmful accusation concerning the plaintiff that has been communicated to a third party.1 However, they differ in the fact that defamation protects someone’s personal reputation, while injurious falsehood protects a person’s interest in property, products or business.2
Defamation has generally existed as a tortious cause of action. In Queensland, defamation law was codified firstly through the Defamation Act 1899 (Qld), and more recently in the Defamation Act 2005 (Qld). The impact of the latter piece of legislation on injurious falsehood lies in section 9 of the Act, which limits a cause of action for defamation to individuals and companies with fewer than ten employees. Corporate entities who employ ten or more people who are defamed therefore usually rely on injurious falsehood.
Another key distinction between defamation and injurious falsehood lies in their respective elements. Unlike defamation, a party suing for injurious falsehood has the additional burden of establishing that the defamatory statement was made maliciously, and that it caused actual damage.
Elements of Injurious Falsehood
The elements of injurious falsehood are as follows:
1. A false statement of or concerning the plaintiff’s goods or business
The defendant must have made a false statement concerning the plaintiff’s goods or business. The falsity of the statement is a question of fact to be determined objectively. Similarly, it will be an issue of construction as to whether the statement referred to the plaintiff’s goods or business.
2. Publication of statement by the defendant to a third person
The publication of the defendant’s statement must have been communicated to a third party. It is not sufficient that the statement was communicated only from the defendant to the plaintiff, nor does the element of publication require that the statement was broadly disseminated.
‘Publication’ can occur both orally or in writing and need only be communicated to at least one third party as a minimum. Recent case law relating to defamation has had an impact on the correct interpretation of who the ‘publisher’ is (i.e. the party that has actually ‘published’ the defamatory matter).
A party who has control of a website or search engine may be liable as a secondary publisher3. This extends to administrators of Facebook pages, or even parties making a post on social media that is not in itself defamatory, but the post allows other parties to publish further statements that lead to the other elements of injurious falsehood being satisfied.4
3. Malice on the part of the defendant
Malice is established either by showing the existence of some indirect, dishonest or improper motive or by showing an intent to injure without just cause or excuse.5 It may also be possible to establish malice simply by demonstrating that the publisher knew that, as a result of the publication, the plaintiff was likely to suffer financial harm.6
4. Actual damage
Actual damage must be distinguished from potential or future damage and may include things such as loss of business or sales. The damage must be causally attributable to the publication.
Victims of injurious falsehood will primarily seek injunctive relief to prevent the publication of further statements pending the trial of the matter (i.e. seek a court order compelling the defendant to remove/cease the publishing the defamatory matter).
In seeking an injunction, the Court is sometimes willing to allow proof that damages are reasonably probable in awarding an injunction as opposed to demanding proof that the plaintiff has suffered actual damages.7
However, in order to recover damages for injurious falsehood, actual damage must be proved.
If your company has suffered loss and damage as a result of defamatory publications, contact Gibbs Wright Lawyers today for a free, no obligation consultation.
If you wish to read more about defamation law in Queensland, see our defamation white paper.
 Quinlivan v Konowalous & Ors  QSC 285 .
 Google Inc v Duffy  SASCFC 130
 Bruder Expedition Pty Ltd v Leigh  QDC 266
 Palmer Bruyn & Parker v Parsons (2001) 208 CLR 388, 425.
 Above n5.
 Keith Arthur Bradley & Anor v Min Li Wu  ACTSC 67
The legal responsibilities and duties of Directors in Australia. Including the consequences of breaching Director’s Duties, corporate governance and legal sources.
Minority shareholders in Australia have rights and protections under Australian Law. Learn how the laws can protect minority interests.