Can a company sue for defamation?

Companies are regarded as separate legal entities by law and are entitled to sue for defamation in certain circumstances. Section 9(1) of the Defamation Act 2005 (Qld) (“the Act”) states that,

“ A corporation has no cause of action for defamation in relation to the publication of defamatory matter about the corporation unless it was an excluded corporation at the time of the publication.”

An excluded company is defined in section 9 of the Act as a not-for-profit company or a company with fewer than 10 employees that is not related to another company.

If a company does not fit within section 9 of the Act, there are other causes of action available, some of which are outlined below.

Misleading and deceptive conduct

Pursuant to Schedule 2, section 18 of the Competition and Consumer Act 2010 (“CCA”), a person must not engage in conduct that is “misleading or deceptive, or is likely to mislead or deceive.” It is important to note that this cause of action can only be brought in regard to conduct related to “trade or commerce”. This means that the publications are “undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business” (Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17).

In Beechwood Homes (NSW) Pty Ltd v Camenzuli [2010] NSWSC 521, the Plaintiff alleged that the Defendant:

1. engaged in conduct in breach of section 42 of the Fair Trading Act 1987 (NSW);
2. published the material knowing it to be false or recklessly not caring whether it was true or false and with no honest belief that it was true; and
3. was actuated by the dominant motive of damaging the Plaintiff and its business.

In this case the Plaintiff was a construction company in the business of building properties and the Defendant was a building consultant engaged by Mr and Mrs Schembri (clients of the Plaintiff). During this time, the Plaintiff discovered that the Defendant had published material on the Defendant’s website, stating words to the effect that, the Plaintiff was a poor builder and that it was prone to bullying competition and anyone else who criticised the business. The Plaintiff sought an interlocutory injunction to prevent the Defendant from publishing further misleading and deceptive statements. The Court granted the injunction and found that there was a serious issue to be tried notwithstanding that the Defendant provided evidence demonstrating the truth of his statements.

Injurious Falsehood

An action of injurious falsehood arises where a defendant publishes false material causing special damage to the plaintiff or the plaintiff’s property or business. In determining whether a claim for injurious falsehood will be successful, the plaintiff must prove to the Court that:

1. the publications were false;
2. there was actual damage done as a result of the publication; and
3. the publication was made by the defendant as an act of malice.

In Kaplan v Go Daddy Group and 2 Ors [2005] NSWSC 636, the Plaintiffs were granted an interlocutory injunction where the Defendant had created a website named “www.hunterholdensucks.com” The website contained false information about the Plaintiffs and allowed people to anonymously leave comments that were detrimental to the Plaintiffs. The Court held that there was malice and potential damage to the Plaintiffs due to the falsity of the statements, and that there was a prima facie case of injurious falsehood and that an interlocutory injunction should be granted.

As highlighted above, companies have other causes of action available to them arising out of the publication of defamatory material. However, these actions are generally more complex and harder to prove than a claim for defamation.

If you believe your company has been defamed, please don’t hesitate to contact me.