A majority of the High Court has recently affirmed the general
test for defamation, namely whether an ordinary reasonable person
would think less of a plaintiff because of what has been said about
him or her, applies to all aspects of a person's reputation,
including business reputation.
The decision scuppers the principle established by the NSW Court
of Appeal in Gacic v John Fairfax Publications Pty Limited
On 8 August 2005, on his radio programme, John laws commented
that Ray Chesterton, a journalist who had previously worked with
2UE, was a "bombastic beer-bellied buffoon".
Radio 2UE Sydney Pty Limited (2UE) is the
licensee of the radio station over which the comments were
broadcast. Mr Chesterton sued Radio 2UE for defamation.
At the trial before Simpson J and a jury of the Supreme Court of
NSW, the jury had to decide whether Mr Laws' comments contained
imputations on Mr Chesteron's character and, if so, whether the
imputations were defamatory. The jury decided in Mr Chesteron's
2UE appealed unsuccessfully to the NSW Court of Appeal, arguing
incorrect directions by the trial judge in respect of whether Mr
Chesteron had been defamed in respect of his business or
professional reputation. 2UE relied on the earlier decision of the
NSW Court of Appeal in Gacic.
In Gacic, the NSW Court of Appeal had to decide whether
a newspaper had defamed a Sydney restaurant by publishing a
restaurant review describing its food as
"un-palatable" and its service as
"bad". The Court of Appeal found that in matters
where it is alleged a plaintiff's reputation has been injured
in the business, trade or professional sense, it is unnecessary to
prove that the imputation would tend to lower that person's
reputation in the estimation of "ordinary, right-thinking
members of the community", which is the accepted test for
defamation (see Sim v Strech ). It is sufficient to
prove that a plaintiff's reputation in their trade, profession
or other office has been injured.
2UE was granted special leave to appeal to the High Court.
The members of the Court were unanimous in dismissing 2UE's
The High Court overruled the principles enunciated by the NSW
Court of Appeal in Gacic, holding that the same test for
what is defamatory generally also applies to defamation in relation
to a person's trade or business.
The High Court considered the decision in Gacic to have
confused the distinction between defamation and injurious
falsehood. Their Honours found that the concept of reputation in
defamation included all aspects of a person's standing in the
community and confirmed that there is no separate test for
different aspects of reputation.
The accepted test for what is defamatory applies to all aspects
of a person's standing in the community.
The High Court has clarified the confusion which surrounded (in
NSW at least) 'business reputation'. Of course, large
corporations have been precluded from suing for defamation since
2003 in NSW and 2006 elsewhere in Australia since the inception of
uniform defamation legislation.
A claim for damage to the reputation of a business (of any size)
is now likely to be couched in allegations of injurious falsehood
or negligent misstatement.
2UE Sydney Pty Ltd v Chesteron (2009) 254 ALR 606;
 HCA 16; (22 April 2009)
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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