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 (2006).

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 favour.

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 [1936]). 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 appeal.

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; [2009] HCA 16; (22 April 2009)