Injurious falsehood is a unique and distinct tort that protects businesses and individuals from the harmful effects of false statements.
Although often confused with defamation, it is important to recognize the key differences between these two legal concepts.
This blog post is about the nature and elements of the tort of injurious falsehood, drawing upon a recent decision, Jay & Anor v Petrikas & Ors (No 4) [2022] NSWDC 628, and other relevant case law.
Nature and Elements of Injurious Falsehood
According to Gummow J in Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388, the tort of injurious falsehood has four elements:
A false statement of or concerning the plaintiff’s goods or business;
Publication of that statement by the defendant to a third person;
Malice on the part of the defendant; and
Proof by the plaintiff of actual damage suffered as a result of the statement.
It is crucial to note the key differences between injurious falsehood and defamation.
While defamation focuses on the protection of personal reputation, injurious falsehood protects proprietary and commercial interests.
As a result, a plaintiff must establish falsity, malice, and special damage in an injurious falsehood claim, unlike in defamation cases.
History and Development
The tort of injurious falsehood has its roots in actions for slander of title, where false statements cast doubt on the plaintiff's ownership of land, preventing them from leasing or selling the property.
This action expanded over time until it reached its modern form, covering falsehoods that cause actual damage when maliciously published.
The tort now includes various types of malicious falsehoods, such as slander of title and slander of goods, although it is not limited to these categories.
Relationship with the tort of deceit
Injurious falsehood shares similarities with the tort of deceit, as both involve false statements causing harm.
However, deceit focuses on false statements made to the plaintiff, while injurious falsehood concerns false statements made about the plaintiff to third parties.
Determining Injurious Falsehood at Trial: Key Questions for Judges
A judge must carefully examine the evidence and make determinations on several critical issues.
Drawing from the case of Jay & Anor v Petrikas & Ors (No 4) [2022] NSWDC 628, the following questions serve as a guide for judges when assessing the merits of an injurious falsehood claim:
Representations: The judge must first determine whether each of the publications in question conveyed certain representations. This involves assessing the content of the publications to establish if any false statements were made.
Connection to the plaintiff: Next, the judge must decide whether the representation(s) were of and concerning the plaintiffs (or either of them) in connection with their 'business.' This ensures that the false statements made in the publications relate to the plaintiffs and their commercial interests.
Falsity: If the representation(s) concern the plaintiffs and their business, the judge must then establish whether the representations were false. This step requires evaluating the truthfulness of the statements made in the publications.
Malice: If the representations are found to be false, the judge must determine whether the defendants published the publications (attributed to them) with malice. This involves examining the defendants' intentions and motives when making the false statements.
Actual damage: The judge must then decide whether the plaintiffs (or either of them) suffered actual damage as a result of the publications. This step requires an assessment of the harm caused to the plaintiffs' business or commercial interests due to the false statements.
Quantum of damages and additional awards: Finally, if actual damage is established, the judge must determine:
The quantum of actual damage, which refers to the monetary value of the harm caused to the plaintiffs;
Whether the plaintiffs (or either of them) are entitled to aggravated damages and/or exemplary damages. If they are, the judge must determine the quantum of either or both of such awards. Aggravated damages compensate for additional harm caused by the defendant's conduct, while exemplary damages serve to punish the defendant and deter similar behaviour in the future.
Key take-aways
The tort of injurious falsehood is a distinct and important area of law that protects businesses and individuals from the damaging effects of false statements.
Its unique elements and historical development set it apart from defamation.
Cases referred to in this blog post:
Jay & Anor v Petrikas & Ors (No 4) [2022] NSWDC 628
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388