Stephens Lawyers & Consultants Newsletter: July 2013

Recent decisions of the Victorian Supreme Court involving publication of defamatory material in the online environment indicate that the court will award significant damages for reputational damage.

Websites, blogs, emails and social media such as Twitter, Facebook and Instagram all provide businesses, non-for-profit organisations and individuals with the ability to promote and market their goods and services to millions of people, but this is not without risk. The online environment also enables the publication and dissemination of defamatory or false or misleading material which can be highly destructive and lead to reputational damage.

Increasingly individuals and businesses are being exposed to cyber-attacks with the posting or dissemination of defamatory, false or malicious comments or reviews by competitors, disgruntled employees or ex-employees or customers or clients.   These cyber-attacks can result in significant reputational damage and business losses.

Persons involved in such unlawful activity are exposed to significant damages claims under Australian defamation law, Australian Consumer Law and for injurious falsehood under Australian torts law.  Owners and/or operators of websites, online forums and search engines which are involved in the publication of the defamatory, false or malicious material are also at risk of damages claims if they do not remove such material from their website upon receiving a request for removal.

Forensic computer experts can be used to ascertain the source or publisher of the online defamatory, false or malicious material and their identity. Civil search warrants known as Anton Pillar orders can be obtained from the Court, without notice to the alleged perpetrator, which allow searches to be undertaken of computer and other electronic records to confirm the origin or publishers of the online defamatory, false or malicious material.

Stephens Lawyers & Consultants advises on all aspects of defamation law, Australian Consumer Law and other laws relevant to operating in the online environment.

Trkulja v Yahoo! and Trkulja v Google

The Trkulja v Yahoo! and Trkulja v Google cases concerned the website which were accessible through the searching the plaintiff’s name using the Yahoo! and Google search engines.1  Mr Trjulka claimed that the material on the ‘Melbourne Crime’ website contained defamatory imputations.2

At trial, Yahoo! admitted that the article had been published on the results page of their search engine, which mean that the jury was asked only to determine whether the article contained the alleged imputations about Mr Trkulja.3  The jury found that the article contained the allegedly defamatory imputations and Justice Kaye of the Victorian Supreme Court awarded Mr Trkulja damages to the sum of $225,000.4

In the Google case however, the Defendants did not admit that they had published the defamatory material.5  Google argued that it was not the publisher of the material as there was no human intervention between the request made to the search engine and the publication of the results.6 Justice Beach held that in relation to this issue Google role was the same as that of a newsagent who sells a newspaper containing a defamatory material.7  Although Google and the newsagent did not intend to publish the material Justice Beach held that both had published material, Google did this through its programming of its search engine and the newsagent by selecting which newspaper was put on display.8

In addition to arguing that they were not the publisher of the material, Google also contested that the defence of innocent dissemination was applicable as Google had not intended to publish the material.9 Under section 32(1) of the Defamation Act 2005 (Vic) the defence of innocent dissemination will be available where the publisher of defamatory material neither knew nor ought reasonably to have known that the material was defamatory.10

Justice Beach acknowledged that generally in the ‘newsagent’ scenario the defence of the innocent dissemination would readily be available.11  However, Justice Beach held that the submission had to be rejected based on the fact that it was open to the jury to hold that Google should have reasonably known that the material was defamatory.12  In considering the liability of internet search engines for the publication of defamatory material Justice Beach reasoned, that based on the relevant case law, it was unlikely that a search engine, such as Google, would be held to have a merely passive role, as such a finding would contradict the principles that have formed the basis for liability in ‘newsagent’ scenario. Justice Beach added that such a finding would also diminish liability in cases where consent to publication may be inferred by failure to remove defamatory material.13

Justice Beach held that the real issue at the trial was whether after the receipt of notice, did Google have the power to stop the publication of the defamatory material and did Google fail to stop the publication of the defamatory material after a reasonable time of receiving the notice.14  As such he found that it was open to the jury to find that Google had published the defamatory material relating to Mr Trkulja and awarded him $200,000 in damages.

Calculating Damages for Defamation

An award of damages in defamation is designed to achieve three principal purposes.15 Firstly, to be a consolation for the distress and hurt caused to the plaintiff by the publication. Secondly, as a reparation for the injury caused to the plaintiff’s reputation. And thirdly, as a vindication of the plaintiff’s reputation. However, in awarding damages for defamation the Court must ensure that:

1. There is an appropriate and rational relationship between the amount awarded the and the harm sustained by the plaintiff;16
2. The amount does not exceed $324,000.00 (this amount has now increased to $355,500.00 as of 1 July 2013);17  and
3. Any other actions being brought by the plaintiff relating to material that has the same meaning or effect.18

In awarding damages Justice Kaye said that determining an award of damages takes into account a diverse range of factors that will varying between cases. The factors that Justice Kaye considered in determining the award of damages for defamation in Trkulja v Yahoo! were as follows:19

1. The nature and extent of the plaintiff’s reputation

In calculating the award of damages Justice Kaye found that before the publication of the article Mr Trkulja had widespread reputation of good repute throughout the Yugoslav Community through his work as a promoter for ethnic music entertainment and as a church elder and Vice-President of the Springvale Community Church.20

2. The nature of the imputations

Justice Kaye also concluded that it was unarguable the imputations that the jury found in the article were particularly grave.21  Justice Kaye asserted that the publication of the imputations was capable of causing considerable damage to the reputation of the plaintiff, who was otherwise held in good repute throughout the community.22

3. The effect of the imputations on the plaintiff’s particular reputation

It was submitted by Yahoo! that the publication of the article was necessarily restricted as it could have only been accessed by people who specifically wished to know about Mr Trkulja.23  However, Justice Kaye rejected Yahoo!’s argument as he was satisfied that, based on evidence relating to the breadth of damaged caused to his reputation by the publication, the article had reached a wide enough audience to cause widespread damage to Mr Trkulja’s reputation.24

4. An evaluation of the injury done to the plaintiff’s feelings

In evaluating the injury caused to Mr Trkulja’s feelings by the article, Justice Kaye concluded that the fact that the material had remained available on the Yahoo! search engine for a period of ten months meant that it had a more injurious effect on Mr Trkulja’s reputation, than if it had been published on live or print media.25  Mr Trkulja was unshaken in his evidence that the publication of the article first came to his attention through the Yahoo! search engine and that it was this publication that lead him suffer a depressive reaction that required him to be prescribed medications, which was not contested by Yahoo!26

In coming to his conclusion of his evaluation of the injury done to Mr Trkulja’s feelings Justice Kaye accepted that Mr Trkulja was not an over-sensitive or vulnerable individual, that he had over a substantial period of time established a high reputation and as such it was understandable that the injury would have caused by Mr Trkulja significant distress and upset.27

5. The conduct of the defendant

Mr Trkulja argued that as Yahoo! had failed to remove the article from its search engine results page after being notified by Mr Trkulja’s lawyers of its defamatory nature and as it had remained on the search results page for a period of ten months after notification, an award of aggravated damages should be made.28  An award of aggravated damages would mean that the Court could award damages above the general limit of $324,000.29

Aggregated Damages

In order to justify an award of aggravated damages there must be something about the conduct of the defendant which aggravates the feeling of hurt caused to the plaintiff by the publication.30 Generally, conduct that will constitute a finding of aggravated damages will be lacking bona fides, or will be improper and unjustifiable.31 Meaning that aggravated damages will be available where the defendant did not believe that the material they were publishing was true or correct, or where the manner and circumstances in which they published the material was not proper or justifiable.32

Justice Kaye found that the failure of Yahoo! to remove or block from view the offending article could not amount to a lack of bona fides or improper or unjustifiable conduct on their behalf. However, Justice Kaye stated that although this fact did not entitle Mr Trkulja to aggravated damages, it was relevant in determining the nature and the extent of the harm caused to his reputation and feelings.33 Justice Beach also held that an award of aggravated damages was not available as Google had legitimate and arguable points of law to argue in its defence, which meant that there was no impropriety in seeking to maintain its position.34

Justice Kaye held that the amount of $225,000 would significantly vindicate the wrong done to the plaintiff by reinstating Mr Trkulja’s reputation and easing his injured feelings.35 However, he noted that Mr Trkulja’s feelings of distress would endure into the future, although being somewhat alleviated.36
In considering his award of damages in the Google proceedings Justice Beach applied the ‘nail the lie’ principle in respect of the imputation upon which the plaintiff had succeeded.37  In decided on the amount of $200,000 Justice Beach distinguished the Google proceeding from the Yahoo! proceeding on a number of different grounds.38  Firstly, that the Yahoo! publication occurred first. Secondly, that Google were found liable for one imputation whereas Yahoo! was found liable for two. Thirdly, the extent of the grapevine effect was likely to be greater in the Yahoo! matter. Finally, that Yahoo! had published the material for significantly longer than Google.

Katarina Klaric | Principal
STEPHENS Lawyers & Consultants | Suite 205, 546 Collins Street, Melbourne VIC 3000 Australia
T + 61 3 8636 9100 | F + 61 3 8636 9199 | E [email protected]
PO Box 16010 Collins Street West VIC 8007 Australia

Stephens logo 1
Stephens-Klaric Legal Pty Ltd (ACN 117 672 376) trading as Stephens Lawyers & Consultants

To register for newsletter updates and to send comments and feedback please email [email protected]

Disclaimer: This newsletter is not intended to be a substitute for obtaining legal advice.

© Stephens Lawyers & Consultant. March 2013. Authored by Katarina Klaric and Matthew Churkovich.