What Is Injurious Falsehood?
At common law, the tort of injurious falsehood arises where a false statement is published about or affecting a commercial business, that statement is published maliciously, and it causes the plaintiff’s business actual damage.
As explained by the High Court, the essence of the action lies in protecting commercial or proprietary interests, rather than personal reputation.
The modern foundation of the tort was set out in Ratcliffe v Evans [1892] 2 QB 524. In that case, Bowen LJ stated at 527:
… [T]hat an action will lie for written or oral falsehoods, not actionable per se nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage, is established law. Such an action is not one of libel or of slander, but an action on the case for damage wilfully and intentionally done without just occasion or excuse, analogous to an action for slander of title.
This passage has been repeatedly affirmed in Australian law. For example, in Hall-Gibbs Mercantile Agency Ltd v Dun [1910] HCA 66, Griffith CJ adopted the formulation in Ratcliffe v Evans [1892] 2 QB 524, noting that the tort required the plaintiff to prove falsity, prove malice, and actual loss.
Similarly, in Sungravure Pty Ltd v Middle East Airlines Airliban SA [1975] HCA 6, the High Court confirmed that injurious falsehood is distinct from defamation, emphasising that the action is:
… an action for words not defamatory of the plaintiff but liable to injure his business was described as ‘not one of libel or of slander, but an action on the case for damage wilfully and intentionally done without just occasion or excuse, analogous to an action for slander of title’..
The principle was further considered in Palmer Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69, where the High Court examined the elements of the tort in depth.
Their Honours reiterated that the plaintiff bears the onus of establishing falsity, malice, and actual damage, and that the action will not lie without all three elements being proven.
Thus, injurious falsehood is not simply a variant of defamation.
Instead, it is a cause of action that has developed to provide a remedy where false and malicious statements interfere with commercial or proprietary rights, causing measurable harm.
It is best understood, in the words of Bowen LJ, as “an action on the case for damage wilfully and intentionally done without just occasion or excuse.”
In this article, our defamation solicitors explain what injurious falsehood is in more detail.
How Injurious Falsehood Differs from Defamation
The fundamental distinction between injurious falsehood and defamation lies in the interests each tort protects.
Defamation is concerned with safeguarding an individual’s personal reputation, whereas injurious falsehood is directed towards protecting commercial and proprietary interests such as business, goods, and economic advantage.
From a practical standpoint, the tort of injurious falsehood offers several advantages over defamation. Unlike defamation, where limitations apply, a corporation may sue in injurious falsehood.
As observed in Palmer Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69, the scope of the tort is particularly valuable in protecting commercial entities against maliciously false statements.
Further, while defamation actions in most jurisdictions are subject to a one-year limitation period (extended in some cases), the limitation period for injurious falsehood remains six years, reflecting its roots as an economic tort.
Another distinction is that a plaintiff need not be identified in the impugned publication for an action in injurious falsehood to succeed, provided the false statement relates to the plaintiff’s goods or business and causes actual damage.
This contrasts with defamation, where identification of the plaintiff is a central requirement.
In addition, the defences available in defamation—such as truth, honest opinion, and statutory qualified privilege—generally do not apply in injurious falsehood.
The plaintiff instead bears the burden of establishing falsity, malice, and actual damage.
Courts may also award exemplary damages in appropriate cases, which are not available under the uniform defamation laws.
In summary, while both torts respond to harm caused by false publications, they serve different purposes: defamation is concerned with dignity and reputation, whereas injurious falsehood is concerned with economic and proprietary harm.
The distinction is not merely theoretical but carries significant procedural and remedial consequences, making injurious falsehood an attractive but demanding cause of action where commercial interests are at stake.
Elements of Injurious Falsehood
To succeed in an action for injurious falsehood, a plaintiff must establish four essential elements:
- A false statement concerning their goods or business.
- Publication of that statement to a third party.
- Malice on the part of the defendant; and
- Proof of actual damage.
Each element carries a heavy evidentiary burden, reflecting the economic and proprietary focus of this tort.
False Statement Concerning Goods or Business
The falsehood must relate to the plaintiff’s goods, business, or commercial interests, and need not disparage their reputation.
As explained in Ratcliffe v Evans [1892] 2 QB 524, the action lies where falsehoods, though not defamatory per se, are maliciously published and cause actual damage.
Courts have questioned whether the tort may extend beyond strictly commercial concerns to encompass false statements that interfere with prospective advantages, even if of a non-commercial nature.
In jurisdictions with statutory defamation legislation, statements likely to injure a person in their trade or profession were historically included in the definition of “defamatory matter.”
Publication to a Third Person
The false statement must be communicated to someone other than the plaintiff.
Without such publication, there can be no causal link between the falsehood and any commercial loss.
This reflects the tort’s foundation in protecting economic relationships; damage only arises when the statement influences the actions of third parties.
Malice
The plaintiff must establish malice, which requires proof that the defendant intended to cause harm, or acted with knowledge of falsity or reckless disregard for the truth.
Malice is not satisfied by showing that harm was reasonably foreseeable; it demands intentional wrongdoing.
As the High Court held in Palmer Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69, the plaintiff bears the onus of demonstrating that the defendant’s conduct was wilful and without just cause. The Court said at [136]:
It was common ground that damage was the gist of the action and that the appellant bore the onus of establishing that the publication complained of caused it actual damage.
Malice may be inferred from personal spite, deliberate knowledge of falsity, or evidence of an “evil or harmful state of mind.”
Proof of Actual Damage
A defining feature of injurious falsehood is the requirement that the plaintiff prove actual pecuniary damage (loss of money).
This may include direct loss of business or a general decline in trade attributable to the falsehood.
Courts may apply the so-called “grapevine effect” to determine whether harm was the natural and probable result of the falsehood.
This doctrine recognises that false statements may spread beyond their original publication, influencing a wider circle of people and thereby amplifying damage.
Whether the grapevine effect is engaged depends on the nature of the statement and the circumstances of its publication.
Injunctions and Remedies
One of the crucial distinctions between defamation and injurious falsehood lies in the availability of remedies.
Because injurious falsehood is concerned with the protection of commercial and proprietary interests rather than personal reputation, courts are less constrained by freedom of speech considerations when granting injunctive relief.
By contrast, the inhibition upon the use of the injunction to restrain further publication of defamatory material relating to the public interest or freedom of speech does not apply to injurious falsehood.
This means plaintiffs who can demonstrate falsity, malice, and actual damage may obtain preventative orders with greater ease in cases of injurious falsehood.
In addition to injunctive relief, courts may award exemplary damages in actions for injurious falsehood.
This is a further point of departure from the defamation regime, where the availability of damages is tightly regulated under the uniform defamation laws.
Further, aggravated or exemplary damages are available to a corporation in respect of injurious falsehood.
The availability of exemplary damages reflects the gravity with which the courts view intentional, malicious, and damaging falsehoods in trade or commerce.
Together, these remedial differences underscore the unique character of injurious falsehood.
Where defamation is cautious in balancing individual rights against the value of free speech, injurious falsehood more readily empowers courts to protect commercial actors against deliberately harmful conduct, whether by restraining further publication or by imposing punitive damages on malicious wrongdoers.
Grapevine Effect and Scope of Damage
A distinctive feature in assessing damages for injurious falsehood is the recognition of the so-called “grapevine effect”.
Courts acknowledge that once a false statement is published, it is rarely confined to its immediate recipients.
Instead, the information may spread informally through word of mouth, repetition by others, or—more recently—via digital and social media platforms.
This broader dissemination can significantly magnify the damage caused to a business or commercial interest.
The principle was first articulated in defamation cases but has been applied in the context of injurious falsehood.
The defamation authorities recognise that the law must take into account not only the original audience but also the likely secondary circulation of the falsehood.
As explained in the case law, the assessment of actual damage includes consideration of whether the words would naturally be expected to be repeated to others and would affect [the plaintiff’s] credit or business.
Legal practitioners emphasise that when calculating damages, courts will consider the seriousness of the imputation, the extent of publication, and the likely informal transmission of the statement beyond its original audience.
The potential for rumours to circulate widely is a key factor in quantifying commercial harm.
The grapevine effect means reputational and economic damage may persist long after the initial publication, particularly when statements are repeated by competitors, customers, or the general public.
In today’s environment, the grapevine effect is amplified exponentially by social media and digital communication. Defamation on social media is on the increase.
A single disparaging post about a company’s products or business can be shared, reposted, or commented upon thousands of times within hours, reaching audiences far beyond the initial publication.
The viral nature of online communications ensures that the “informal propagation” of falsehoods remains a powerful and damaging reality for businesses.
This underscores the ongoing relevance of injurious falsehood: even though the tort is centuries old, its focus on proven economic loss makes it highly applicable in addressing the modern challenges of online misinformation and its rapid, uncontrolled spread.
Factors Influencing Damages
When determining damages in injurious falsehood, courts go beyond a mechanical assessment of proven pecuniary loss. They also consider a range of contextual factors that influence the seriousness and reach of the harm caused.
This approach reflects the principle that damage is “the gist of the action,” but that its scope must be evaluated in light of the circumstances of publication.
Commentary highlights several recurring considerations. First, the seriousness or gravity of the false statement is central.
Statements suggesting dishonesty, fraud, or dangerous defects in products are likely to attract higher damages than trivial criticisms, because of their capacity to deter customers or undermine commercial confidence.
Second, courts examine the number and nature of recipients of the publication: a widely disseminated falsehood, particularly if directed to a business’s key clients or within its industry, carries greater harm than one communicated to a narrow audience—a disparaging Google review, for example.
Third, the size, reputation, and standing of the plaintiff’s business are relevant. Established companies with significant goodwill may suffer greater and more measurable economic harm from disparaging statements than small enterprises, though for smaller businesses, even modest losses can be critical.
Finally, the defendant’s conduct after publication plays a role. Efforts to remedy the falsehood, such as issuing an apology, publishing a retraction, or otherwise mitigating the damage, can reduce the damages awarded.
Conversely, failure to take corrective steps or persistence in maintaining the falsehood can aggravate liability.
Together, these factors demonstrate that injurious falsehood is not only concerned with the bare fact of economic loss but also with how the circumstances of publication shape the extent of damage.
They also underline the discretionary nature of the remedy. While strict proof of actual damage is required, the quantum awarded will often depend on how the court evaluates the broader context of the falsehood’s publication and impact.
Injurious Falsehood Overlaps with Defamation
The relationship between injurious falsehood and defamation is often complex, with courts and commentators recognising that certain statements may fall within both torts depending on their content and effect.
Injurious falsehood is directed to false and malicious statements that damage commercial or proprietary interests, while defamation protects personal reputation. However, the dividing line is not always clear.
Modern statutory definitions of defamation have broadened the scope of actionable statements.
Words that once would only have supported an action in injurious falsehood—such as disparagement of goods, or allegations about a business’s products or services—may now be capable of falling within defamation where they are said “of or concerning” a person and likely to harm them in their trade or profession.
This overlap creates boundary issues: the exact words may simultaneously give rise to claims in both torts, though the elements to be proved differ.
Case law and commentary emphasise that in such edge cases, plaintiffs must consider carefully which cause of action is more advantageous. Defamation relieves plaintiffs of the burden of proving malice and actual damage, but may be unavailable to certain entities, such as corporations above a specific size or government bodies.
Injurious falsehood, by contrast, remains available to businesses of all sizes, provided falsity, malice, and economic loss can be demonstrated.
The key distinction remains the interest protected: defamation is concerned with reputation, while injurious falsehood protects property, goods, and commercial interests.
This nuanced overlap underscores the continuing relevance of injurious falsehood as a complementary remedy.
Where statutory defamation does not apply, or where the plaintiff’s primary harm lies in economic damage rather than reputational loss, injurious falsehood offers a vital alternative cause of action.
Injurious Falsehood vs Defamation: Key Differences
Although injurious falsehood and defamation sometimes overlap, they remain distinct causes of action with different purposes and evidentiary burdens.
The following table highlights the key differences, showing why businesses often rely on injurious falsehood while individuals typically pursue defamation.
| Feature | Injurious Falsehood | Defamation |
| Protected Interest | Commercial, proprietary, or economic interests in goods, services, or business | Personal and professional reputation |
| Nature of Statement | False and malicious, not necessarily defamatory | Defamatory — lowers reputation, exposes to ridicule or contempt |
| Actionable Per Se | No — proof of actual loss is essential | Yes (for libel and most statutory defamation) — damage is presumed |
| Burden of Proof | Plaintiff must prove falsity, malice, and actual damage | Plaintiff need not prove falsity or damage; defendant must prove truth if pleaded |
| Malice | Required — intent to injure or reckless indifference | Not needed for liability (though relevant for damages/defences) |
| Proof of Damage | Actual, provable financial loss (lost business, contracts, or general decline in trade) | Presumed in most cases; actual proof only required in limited slander actions |
| Remedies | Compensatory damages, exemplary damages, and injunctions are more readily available | Compensatory damages, limited exemplary damages, and injunctions are rarely granted |
| Typical Claimants | Businesses, corporations, councils, and property owners | Individuals and small corporations (under statutory rules) |
Practical Advice and Litigation Considerations
Beyond the doctrinal elements of injurious falsehood, there are significant practical considerations for businesses and litigants deciding whether to pursue this cause of action.
Because the tort requires strict proof of falsity, malice, and actual damage, proceedings can be complex and expensive.
Plaintiffs, particularly small businesses, must weigh the potential benefits of a claim against the costs of litigation and the evidentiary challenges of proving pecuniary loss.
One consideration is the role of apologies and corrections. Commentators note that a prompt and public retraction by the defendant may help to reduce the extent of damages.
While not a formal defence, steps to correct the falsehood can be taken into account by the court when quantifying harm.
Conversely, a refusal to apologise or a persistence in maintaining the falsehood may aggravate liability.
Another practical issue is the cost/benefit analysis of bringing an action.
For small enterprises, even where the falsity and malice are evident, the expense of proving actual damage may outweigh the likely award of damages.
This explains why injurious falsehood is often pursued by larger businesses with more substantial resources or where the potential loss is significant.
Finally, there are many real-world examples of statements that may ground claims in injurious falsehood.
These include disparaging remarks about the quality or safety of goods, false comparisons in commercial advertising, or assertions about improper trade practices.
Such statements, even if not defamatory of an individual’s reputation, may still cause quantifiable harm to a business’s economic interests and fall squarely within the scope of injurious falsehood.
Leading Australian Cases on Injurious Falsehood
Australian case law on injurious falsehood has developed a clear and consistent framework that distinguishes it from defamation, while reinforcing its role as a vital economic tort.
Courts have repeatedly affirmed that this cause of action protects business, proprietary, and commercial interests rather than personal reputation, and that strict proof of falsity, malice, and actual monetary damage is required.
Judicial reasoning highlights that malice may be inferred from knowledge of falsity, reckless indifference, or spite, but cannot be presumed. Importantly, damage must be real and provable—such as loss of business, customers, or financial harm—rather than speculative.
While there is acknowledged overlap with defamation, the two torts protect different interests and impose distinct evidentiary burdens.
Courts also recognise that injunctions and even exemplary damages are available in appropriate circumstances, reflecting the strong commercial focus of the tort and its continuing significance in modern litigation.
We will explain the authority cases in detail below.
Ratcliffe v Evans
The case of Ratcliffe v Evans [1892] 2 QB 524 is a foundational authority on the tort of injurious falsehood, sometimes described as malicious falsehood or slander of title.
It firmly establishes that an action lies for written or oral falsehoods, not necessarily defamatory or actionable per se, where they are published maliciously, calculated in the ordinary course to cause damage, and in fact result in actual loss.
This tort is characterised as an “action on the case” for deliberately inflicted economic harm, distinct from the reputational focus of libel or slander.
The court made it clear that three elements must always be satisfied: the statement must be false and maliciously published; it must be intended or reasonably likely to cause harm; and actual, temporal damage must be proven.
Unlike defamation, where damage is presumed in many cases, the gist of injurious falsehood lies in proof of real, pecuniary loss.
In this respect, the burden on plaintiffs is heavier: they must allege and establish falsity, malice, and actual damage with a degree of particularity that reflects the circumstances of the publication.
A central issue in the case was the evidentiary standard for proving damage.
The court accepted that while special damage must be proved, this requirement is not applied with pedantic rigidity.
Where the nature of the falsehood and the means of its dissemination make it impossible to identify individual customers lost—for example, where a newspaper announcement broadly affects a business—evidence of general loss of business is admissible and sufficient.
The judges emphasised that to insist on strict proof of each lost customer would often defeat the action entirely, denying redress for harm that is both real and foreseeable.
The case also clarified the distinction between defamation and injurious falsehood.
Defamation protects reputation, is actionable per se, and does not require proof of malice to establish liability.
Injurious falsehood, by contrast, protects commercial and proprietary interests, requires malice to be shown, and demands proof of actual loss.
The difference reflects the separate interests each tort serves: reputation on one hand, and economic security on the other.
In terms of remedies, the court confined itself to awarding damages, compensating for the proven loss of business.
It did not consider injunctions or other equitable relief, underscoring that the focus of the action was on monetary redress for economic harm.
The judgment thus remains a cornerstone in defining the scope, elements, and evidentiary requirements of injurious falsehood, while highlighting its crucial differences from defamation.
Hall-Gibbs Mercantile Agency Ltd v Dun
In Hall-Gibbs Mercantile Agency Ltd v Dun [1910] HCA 66, the plaintiffs, a trade protection society, sought damages for a publication by the defendants in a newspaper, which allegedly implied that the plaintiffs’ business had been absorbed by the defendants, leading to the cessation of the plaintiffs’ operations in Queensland.
The High Court confirmed that injurious falsehood, also referred to as slander of title or trade libel, is distinct from defamation and governed by stricter common law requirements.
Following Ratcliffe v Evans [1892] 2 QB 524, the Court emphasised that a plaintiff must prove three essential elements:
- The statement was false.
- It was made maliciously (that is, intentionally or without cause or excuse); and
- It caused actual or special damage.
The Court drew a sharp line between defamation, which protects personal and professional reputation, and injurious falsehood, which protects property, business, or economic interests.
Defamation under the Queensland statute was actionable per se without proof of damage or malice, while injurious falsehood always required proof of actual pecuniary loss.
As the judges explained, the rationale lies in the different kinds of harm targeted: defamation is about reputation, while injurious falsehood concerns commercial injury and economic consequences.
Accordingly, claims that fall within injurious falsehood cannot rely on the more generous statutory defamation provisions.
Plaintiffs must still discharge the burden of establishing falsity, malice, and actual damage.
The decision underscores that injurious falsehood is a narrower but vital cause of action for malicious attacks on property or business interests, operating outside the statutory framework and retaining its traditional common law form.
Sungravure Pty Ltd v Middle East Airlines Airliban SA
In Sungravure Pty Ltd v Middle East Airlines Airliban SA [1975] HCA 6, the High Court clarified the nature of injurious falsehood by contrasting it with defamation.
The judges explained that injurious falsehood, also known as slander of title or malicious falsehood, is not concerned with personal reputation but rather with commercial or property interests.
At common law, such claims were recognised as an “action on the case for damage wilfully and intentionally done without just occasion or excuse” (drawing from Ratcliffe v Evans [1892] 2 QB 524).
Unlike defamation, which is actionable per se, injurious falsehood requires proof of falsity, malice, and actual damage.
The Court further distinguished the two torts by highlighting that defamation protects individuals from statements that harm reputation and is governed by statute. In contrast, injurious falsehood protects economic interests and remains outside the statutory framework.
Mason J observed that although “slander of title” is expressly excluded by legislation, the exclusion does not necessarily extend to all injurious falsehood claims.
The Court also recognised overlap: some statements formerly actionable only as injurious falsehood may fall within statutory defamation if they concern a person and are likely to injure them in trade or profession.
This demonstrates that the statutory reforms broadened the scope of defamation, while injurious falsehood continues to serve a narrower but distinct role.
As for remedies, the Court noted that the claim in this case was framed solely as one for statutory defamation, with damages being the sought remedy.
There was no injurious falsehood pleaded, and the judges did not discuss injunctions or equitable relief.
The focus remained on the doctrinal boundaries between the two torts and the elements of injurious falsehood, reinforcing that such claims demand a higher evidentiary threshold of falsity, malice, and proof of actual loss.
Ballina Shire Council v Ringland
In Ballina Shire Council v Ringland (1994) 33 NSWLR 680, the Court explained that injurious falsehood (a.k.a. malicious falsehood/trade libel/slander of title) is a distinct economic tort:
- The plaintiff must prove that a false statement was published.
- That it was made maliciously (intentionally or without cause or excuse); and
- That it caused actual, provable pecuniary loss.
Unlike defamation—where damage is generally presumed—falsity and special damage must be affirmatively established.
Courts describe it as an “action on the case” for wilfully inflicted economic harm, aimed at protecting property, goods, and business interests rather than personal reputation.
They also draw clear lines between injurious falsehood and defamation. Defamation protects reputation and is actionable per se under statute; injurious falsehood protects economic interests and always requires proof of malice and actual loss.
The same publication can, in principle, sustain both causes if each tort’s elements are met.
In this case, the majority accepted that a local authority may sue for injurious falsehood (even if it cannot sue for defamation), provided it proves falsity, malice, and special damage; Kirby P dissented on policy grounds, cautioning against converting political criticism into economic tort claims.
Special damage is a strict requirement in injurious falsehood (e.g., lost business or quantifiable financial outlay), and whether items (like meeting costs) qualify turns on proof at trial.
Overall, injurious falsehood offers a narrower but vital remedy for malicious economic harm, operating outside the statutory defamation framework.
Palmer Bruyn and Parker Pty Ltd v Parsons
In Palmer Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69, he appellant, Palmer Bruyn & Parker Pty Ltd, a surveying firm, was engaged by McDonald’s Australia Ltd to handle a rezoning application for a proposed restaurant in Newcastle.
The respondent, Keith Parsons, a councillor and member of the Australian Labor Party (ALP), opposed the application.
Parsons sent a hoax letter, using the appellant’s letterhead, to Councillor Manning, which was intended to ridicule the appellant and influence the ALP caucus against the rezoning application.
The trial judge found that the letter was false and maliciously published, but concluded that the loss of the McDonald’s contract was due to a subsequent newspaper article, rather than the letter itself.
The Court of Appeal upheld the trial judge’s decision, agreeing that the newspaper article was not a natural and probable result of the letter’s publication.
The High Court dismissed the appeal, agreeing with the lower courts that the loss of the McDonald’s contract was not the natural and probable result of the respondent’s conduct.
The case provides a comprehensive analysis of the tort of injurious falsehood, outlining its definition, essential elements, historical development, differences from defamation, and the requirements for liability and proof.
The following synthesises the principal points as articulated by the High Court:
The Court accepts the classic formulation found in Ratcliffe v Evans [1892] 2 QB 524, and further adopts four fundamental elements for the action (discussed by Gummow J):
- 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.
- Proof by the plaintiff of actual damage (which may include general loss of business) suffered because of the statement.
Kirby J offers a more detailed list, expanding these into seven elements:
- The defendant published false matter.
- The falsity concerned the plaintiff or its property.
- The falsity was calculated to induce others not to deal with the plaintiff or was otherwise likely to damage the plaintiff.
- The publication was actuated by malice.
- The publication had the results complained of.
- Those results included actual damage to the plaintiff.
- Such damage was either: (a) the result which the person publishing the false matter intended; or (b) the natural and probable result of such publication.
The judges broadly agree on these elements, differing only slightly in how they are expressed and elaborated.
This case found that the differences from defamation are as follows:
- Injurious falsehood may involve statements which are untrue but not necessarily defamatory.
- The plaintiff in injurious falsehood must prove falsity, malice, and special damage (actual pecuniary loss), which are not required in defamation.
- Defamation is primarily concerned with injury to personal reputation, while injurious falsehood protects mainly commercial or proprietary interests.
AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd
In AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd [2010] NSWSC 1395, the Court explained that injurious (malicious) falsehood is an economic tort with four strict elements:
- A false statement about the plaintiff’s goods or business.
- Publication to a third party.
- Malice (an intent to injure or acting without cause or excuse, which can be inferred from knowledge of falsity or reckless indifference); and
- Actual, provable damage.
Unlike defamation, falsity and damage are not presumed—the plaintiff must affirmatively prove both, and “actual damage” can include a general loss of business shown by evidence.
It differentiates injurious falsehood from defamation in purpose and proof.
Defamation protects personal reputation and is generally actionable per se; injurious falsehood protects proprietary and commercial interests and always requires proof of malice and pecuniary loss.
The same publication can sometimes ground both torts, but the burdens and interests differ.
Policy considerations that limit government bodies from suing in defamation do not, in principle, bar them from suing in injurious falsehood, because the latter targets provable economic harm rather than reputational injury.
Regarding remedies, the court notes that injunctions are more challenging to obtain in defamation due to free-speech concerns. Still, that inhibition does not apply with the same force to injurious falsehood, where the protected interests are commercial.
Nonetheless, success still hinges on proving the elements: malice and actual damage remain essential for final relief, and courts may grant delivery-up or other equitable orders in related claims (e.g., breach of confidence) even if injurious falsehood is not established.
Applying those principles, the court accepted that the impugned statements were false and capable of causing business harm but found no malice: the defendants had undertaken inquiries and had some basis—albeit mistaken—for believing their statements.
Because malice was not established, the injurious falsehood claim failed despite falsity and harm, and only limited relief (delivery up of certain materials) was granted.
Summary of the Case Law
Case law on injurious falsehood consistently affirms that the tort is aimed at protecting economic, proprietary, and business interests rather than personal reputation.
Courts have imposed strict requirements: the plaintiff must prove that a false statement was published, that it was made maliciously, and that actual financial damage resulted.
Unlike defamation, where damage is often presumed, injurious falsehood demands concrete proof of pecuniary loss, and malice must be shown as part of the plaintiff’s case.
These principles narrow the scope of the tort but are crucial for safeguarding businesses and commercial entities against malicious economic harm.
The cases show:
- Core Elements: The tort requires proof of (1) a false statement concerning goods, business, or interests, (2) publication to a third party, (3) malice—meaning an intent to injure or reckless indifference to truth, and (4) actual, provable pecuniary damage.
- Onus of Proof: Unlike defamation, the plaintiff must affirmatively prove falsity, malice, and actual loss. Falsity is not presumed, and damage is not inferred.
- Malice: Courts define malice broadly as publication with intent to harm or without cause or excuse. Malice can be inferred from knowledge of falsity, reckless indifference, spite, or the manner and tone of publication. Mere carelessness or negligence is insufficient.
- Damage Requirement: Actual loss must be shown, which may include a general decline in business, loss of customers, or other quantifiable financial harm. It is not limited to narrowly defined “special damages” but must be real and not speculative.
- Overlap with Defamation: Statements may give rise to both defamation and injurious falsehood, but the interests protected differ. Defamation protects reputation, while injurious falsehood protects commercial and proprietary interests. The availability of one action does not preclude the availability of the other.
- Remedies: Courts accept that injunctions are more readily available for injurious falsehood than defamation, since the tort protects economic rather than personal interests, and free speech concerns weigh less heavily. Exemplary damages may also be awarded.
- Corporate and Institutional Plaintiffs: Corporations and, in some circumstances, public bodies can sue in injurious falsehood, provided they prove the elements. This is a key distinction from defamation, where certain entities (e.g., government authorities) are exempt from suing.
Further Useful Information
In addition to its strict legal elements, injurious falsehood offers several practical advantages that make it a valuable tool for businesses.
These advantages highlight how the tort complements or improves upon defamation, particularly in commercial contexts.
They include its applicability to corporations excluded from defamation law, an extended limitation period, broader remedies such as injunctions and exemplary damages, and its adaptability to the realities of modern communication.
Corporate and Small Business Use
One of the most practical advantages of injurious falsehood is its availability to businesses that cannot sue in defamation.
Under the uniform defamation laws, corporations with ten or more employees are generally barred from bringing defamation proceedings, save for exceptions involving not-for-profit entities.
Injurious falsehood fills this gap. Large companies, including listed corporations and councils, can still pursue claims for economic harm caused by false and malicious statements, provided they can establish falsity, malice, and actual loss.
For small businesses, the tort is equally valuable where reputational harm translates into lost contracts, customers, or goodwill.
This flexibility underscores the commercial focus of injurious falsehood.
While individuals might prefer defamation for its presumptions of damage and malice, businesses often rely on injurious falsehood because it directly protects their trading interests.
The capacity for both small enterprises and large corporations to use the tort demonstrates its broad relevance in commercial disputes, primarily where falsehoods are targeted at goods, services, or trading activities.
Limitation Period Advantage
Another significant advantage lies in the limitation period.
Defamation actions must typically be commenced within one year of publication, with extensions allowed only in restricted circumstances and at the court’s discretion.
This short timeframe often disadvantages plaintiffs who may only discover the damage much later, especially in cases involving online publications or gradual commercial fallout.
In contrast, injurious falsehood claims can generally be brought within six years under the ordinary limitation rules for torts.
This extended window provides a more realistic opportunity for plaintiffs to assess the harm, gather evidence of actual loss, and initiate proceedings.
For businesses dealing with long-term economic consequences, such as a gradual decline in sales following a false comparative statement or misleading online review, the longer limitation period ensures that the claim remains viable even after the immediate publication has faded from view.
Remedies Beyond Damages
Injurious falsehood also offers broader remedial flexibility compared with defamation.
Damages are not confined to compensatory awards but may, in appropriate cases, include exemplary damages where the defendant’s conduct was particularly malicious or oppressive.
This punitive dimension serves as a deterrent and acknowledges the seriousness of intentional commercial harm.
Injunctions are another key feature. Unlike defamation—where courts are highly reluctant to restrain publication because of freedom of speech concerns—injunctions are more readily available in injurious falsehood claims.
Since the tort protects commercial and proprietary interests rather than personal reputation, courts weigh the balance differently.
Businesses can therefore obtain injunctions to prevent the further spread of damaging falsehoods about their goods or services, offering real-time protection alongside monetary compensation.
Modern Communications Context
The rise of digital communication has amplified the importance of injurious falsehood.
False statements about businesses are no longer confined to private conversations or small publications; they can now be broadcast instantly to thousands via social media, online reviews, or viral marketing campaigns.
The “grapevine effect,” traditionally understood as word-of-mouth repetition, is now magnified exponentially through likes, shares, and reposts.
This reality ensures that injurious falsehood remains a highly relevant cause of action in the digital age.
Businesses can rely on the tort to combat false online reviews alleging defective goods, misleading social media posts from competitors, or malicious viral rumours designed to undermine commercial standing.
By focusing on provable economic harm, injurious falsehood provides a structured legal remedy that responds to the speed, reach, and severity of reputational and financial damage in modern commerce.
Practical Checklist for Proving Injurious Falsehood
To succeed in an action for injurious falsehood, a plaintiff must establish each element of the tort with precision.
Unlike defamation, damage and malice are never presumed — they must be affirmatively proved.
The following checklist sets out the essential requirements and serves as a practical guide for assessing whether a claim is likely to succeed.
| Element | What Must Be Shown | Key Points / Guidance |
| False Statement | The defendant published a statement about the plaintiff’s goods, services, business, or property that was untrue. | The burden is on the plaintiff to prove that the statement is false. Unlike defamation, it is not presumed. |
| Publication | The statement was communicated to at least one third party. | Publication can be written, oral, or digital (e.g., a newspaper, a website, or social media). |
| Malice | The statement was made maliciously—intentionally to cause harm, or without cause or excuse. | Malice may be inferred from knowledge of falsity, reckless indifference, or spite. Carelessness is not enough. |
| Actual Damage | The plaintiff suffered provable financial loss as a result of the publication. | Loss can include lost contracts, reduced sales, or a decline in overall business. Evidence of general loss may suffice if specific losses cannot be identified. |
| Remedies | Compensation and, in some cases, injunctions or exemplary damages. | Injunctions are more readily available than in defamation; exemplary damages may be awarded for particularly malicious conduct. |
Illustrative Examples of Injurious Falsehood
Because injurious falsehood focuses on commercial harm rather than personal reputation, it arises in a wide range of situations where false statements damage business or property interests.
The following scenarios illustrate how the tort may be applied in practice, ranging from malicious online reviews to false allegations intended to undermine trust or divert trade.
These examples show the breadth of contexts in which businesses can rely on injurious falsehood for protection.
Example – Bad Google Review
A competitor posts a fake Google review stating that a café uses expired ingredients and has failed health inspections.
Although not defamatory of the owner personally, the statement is false, malicious, and causes customers to stop attending.
If the café can show a decline in sales linked to the review, it may establish injurious falsehood.
Example – False Allegation of Product Defect
A rival electronics retailer circulates a flyer claiming that another store’s televisions contain a dangerous electrical fault.
The statement is untrue and designed to divert sales.
If the targeted store loses contracts or experiences a drop in sales as a result, this satisfies the requirement for falsity, malice, and actual damage.
Example – Allegations of a Sexual Nature Affecting a Business
A blogger falsely claims that a childcare centre’s staff are involved in inappropriate sexual conduct.
Even if framed as concerning the business rather than an identified individual, such a statement is calculated to destroy trust and drive away customers.
Provided the centre proves a financial loss (e.g., parents withdrawing their children), the claim may support a claim of injurious falsehood.
Example – Disparagement in a Commercial Tender
During a competitive tender, one company falsely asserts to the decision-makers that a rival lacks necessary licences and has previously breached contracts.
If the false statement is made maliciously and causes the rival to lose the tender, the requirements of injurious falsehood are satisfied.
Key Takeaways – Injurious Falsehood -v- Defamation
Injurious falsehood stands as a powerful but demanding cause of action within Australian tort law.
Unlike defamation, which is directed at protecting personal reputation, injurious falsehood safeguards proprietary and commercial interests, such as business, trade, and economic advantage.
Its distinct purpose makes it a valuable remedy in circumstances where defamation law is inadequate.
The burden on a plaintiff, however, is considerable. As the High Court made clear in Palmer Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69, liability depends on strict proof of three core elements: falsity of the statement, malice on the part of the defendant, and actual pecuniary damage. This reflects the long-established rule in Ratcliffe v Evans [1892] 2 QB 524, where Bowen LJ emphasised that:
An action will lie for written or oral falsehoods, not actionable per se nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage … Such an action is not one of libel or of slander, but an action on the case for damage wilfully and intentionally done without just occasion or excuse.
The strict requirements are also reflected in subsequent Australian authorities. In Sungravure Pty Ltd v Middle East Airlines Airliban SA [1975] HCA 6, the High Court reaffirmed that actual and quantifiable loss must be demonstrated, while in Ballina Shire Council v Ringland (1994) 33 NSWLR 680, it was emphasised that malice must be affirmatively proved and cannot be presumed.
Despite these hurdles, the tort offers significant remedial advantages. Corporations can sue for injurious falsehood, exemplary damages may be awarded, and the limitation period remains six years (not one year).
Moreover, the potent free-speech inhibition that tempers injunctive relief in defamation does not apply, allowing courts to restrain maliciously false commercial publications more readily.
In summary, injurious falsehood provides an essential legal avenue for businesses and commercial actors whose economic interests have been deliberately undermined by false and malicious statements.
While its evidentiary burdens are stringent, it remains an essential cause of action where defamation law cannot provide an adequate response.
Injurious Falsehood FAQ with Answers
To help clarify how injurious falsehood operates in practice, we’ve answered some of the most common questions below.
These FAQs provide clear, practical guidance on the elements, differences from defamation, remedies, and modern applications of this critical commercial tort.
What is injurious falsehood?
Injurious falsehood is a tort that protects businesses and individuals from false statements made maliciously that cause actual economic loss. Unlike defamation, which safeguards personal reputation, injurious falsehood focuses on commercial interests, such as goods, property, or business standing. To succeed, the claimant must prove falsity, malice, publication, and actual financial damage. It is also called malicious falsehood, slander of title, or trade libel.
How does injurious falsehood differ from defamation?
Injurious falsehood protects economic and proprietary interests, while defamation safeguards personal reputation. Defamation is often actionable per se, meaning damage is presumed. In contrast, injurious falsehood requires strict proof of falsity, malice, and actual pecuniary loss. Malice must be shown as an element of liability. This makes injurious falsehood narrower, but it provides a remedy where defamation law does not apply, especially for larger companies.
What are the elements of injurious falsehood?
The four core elements of injurious falsehood are: (1) a false statement concerning the plaintiff’s goods, property, or business; (2) publication of the statement to a third party; (3) malice on the part of the defendant, meaning intent to harm or reckless disregard for the truth; and (4) actual damage, which usually involves provable financial loss suffered by the plaintiff.
What is meant by “malice” in injurious falsehood?
In this context, malice means publishing a falsehood with an improper motive, such as intent to harm or without just cause or excuse. It can be inferred that the defendant knew the statement was false or was recklessly indifferent to its truth. Malice is more than carelessness; it involves dishonesty, spite, or an ulterior motive that makes the falsehood wrongful.
Do you need to prove actual damage in injurious falsehood?
Yes. Actual pecuniary damage is the essence of injurious falsehood and must be proved. The courts will not presume harm, unlike in defamation. Evidence can include lost contracts, customers, or a decline in general business. In some cases, proof of a general downturn in trade is enough if it can be directly attributed to the false statement. Without loss, the claim will fail.
Can corporations sue for injurious falsehood?
Yes. Corporations, including large companies and councils, can sue for injurious falsehood if they prove falsity, malice, and actual damage. This is important because, under Australia’s uniform defamation laws, most corporations with more than ten employees are prohibited from suing in defamation. Injurious falsehood, therefore, provides a pathway for businesses to protect their commercial interests where reputational damage translates into economic harm.
Can individuals sue for injurious falsehood?
Yes. Individuals can bring an action for injurious falsehood where false and malicious statements target their goods, services, or trade and cause financial loss. For example, a sole trader whose business suffers due to a false online review may sue for injurious falsehood. Unlike defamation, the individual must prove actual pecuniary loss, not just reputational harm, to succeed.
What remedies are available in injurious falsehood?
Remedies include damages for actual financial loss, injunctions to prevent further publication, and, in severe cases, exemplary damages to punish malicious conduct. Injunctions are more readily available than in defamation because the tort protects commercial rather than personal interests. Courts may also grant equitable remedies such as delivery up of confidential materials if relevant. Remedies aim to stop the harm and compensate the plaintiff.
What is the “grapevine effect” in injurious falsehood?
The grapevine effect refers to the informal spread of false statements beyond the original audience, such as through gossip, social media shares, or word-of-mouth. Courts recognise that harm can multiply as a falsehood circulates more widely. When assessing damages in injurious falsehood, judges may consider this likely informal propagation, especially in the digital age, where harmful statements can go viral quickly.
What factors influence damages in injurious falsehood?
Courts assess damages by weighing several factors, including the seriousness of the false statement, the size and standing of the plaintiff’s business, the number and nature of people who received it, and whether the defendant apologised or retracted the statement. The extent of the economic harm and the malicious intent behind the publication are central to determining the appropriate award of damages.
How do courts calculate “actual damage” in injurious falsehood?
Actual damage is usually measured by financial loss, such as reduced sales, lost customers, or specific contracts cancelled. In cases where it is impossible to identify individual losses, courts may accept evidence of a general decline in business if it is clearly linked to the falsehood. The key requirement is that the damage is real, not speculative or presumed.
Can a Google review lead to injurious falsehood?
Yes. A maliciously false Google review alleging poor quality goods or fraudulent practices can amount to injurious falsehood if it causes actual business loss. The reviewer must have acted without justification, and the business must prove that the review caused quantifiable damage, such as a loss of customers or contracts. Honest reviews, even if negative, will not meet the threshold.
Can injurious falsehood and defamation both apply to the same statement?
Yes. A single statement can give rise to both torts if it attacks both reputation and business interests. For instance, an allegation that a company director is dishonest (defamation) and that the company sells dangerous goods (injurious falsehood) may support claims in both areas. Each cause of action, however, requires separate elements to be proven, and success in one does not guarantee success in the other.
What is the limitation period for injurious falsehood claims?
Injurious falsehood claims generally fall under the standard six-year limitation period for torts in Australia. This is significantly longer than the one year for defamation actions, which can only be extended in limited circumstances. The extended timeframe allows businesses to bring claims when financial harm surfaces gradually, such as through ongoing reputational or commercial damage following a false publication.
Why is injurious falsehood still relevant in the digital age?
Injurious falsehood remains highly relevant because false and malicious statements now spread rapidly online through reviews, social media, and viral posts. Businesses can suffer serious financial harm from misleading or malicious claims targeting their goods or services. The tort provides a structured remedy by requiring proof of falsity, malice, and loss, making it an essential legal tool to combat commercial harm in modern communications.
