Blurring fact and opinion – the complexities of the honest opinion defence to defamation claims

In Green v Fairfax Media Publications Pty Ltd [No 4] [2021] WASC 474, the Western Australian Supreme Court has demonstrated the narrow scope of the honest opinion defence to defamation claims, in a $400,000 judgment against the Australian Financial Review.  It follows on from a $280,000 judgment in the Federal Court last month (Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15) by Dr Elaine Stead, former managing director of Blue Sky Alternative Investments against AFR Rear Window columnist Joe Aston, who likewise failed with an attempted honest opinion defence.

The two judgments act as a reminder of the risks of interweaving facts and opinions into a single publication and highlight the importance of ensuring that publications of opinion can be shown to be based upon substantially true material.

"Green Power" and accusations of unethical market manipulation

In the WA case, the plaintiff, Dr Jemma Green, was the co-founder and chair of Power Ledger Pty Ltd, an Australian blockchain based energy trading platform which facilitates the decentralised buying and selling of renewable energy.

The defendants, the Australian Financial Review (AFR) and journalist Aaron Patrick, published two articles about Dr Green and Power Ledger.  The first article titled "Blockchain firm in gun over spruikers" stated that Dr Green and Power Ledger were rewarding "bounty hunters" for promoting the Blockchain services online, and utilising fake social media profiles to spruik Power Ledger's digital currency (Spruikers article).

A second article, titled "How to make and lose $2 billion", discussed the money made and lost by Dr Green, the alleged overhyping of Power Ledger and its failure to meet market expectations as a result of that overhype, and claimed that Power Ledger's digital currency was overvalued.

Unusually, the parties were in agreement over the defamatory meaning of the publications. The defendants accepted that the two articles conveyed that Dr Green was causing an unethical market manipulation by Power Ledger by using undisclosed paid spruikers to promote it and its digital currency, and further that those meanings were defamatory to Dr Green.

The defendant publishers sought to justify both articles as being substantially true.  They further argued a defence of "honest opinion", pursuant to section 31(3) of the Defamation Act 2005 (WA), in respect of the Spruikers article.

An alleged “Brick Tamland", "tireless Tweeter of fridge magnet banalities” and "feminist cretin"

In the Federal Court, Ms Stead claimed that Mr Aston's acerbic criticisms of her in which he variously described her as “the Brick Tamland ^[1] of Queensland’s fledgling Venture Capital scene and tireless Tweeter of fridge magnet banalities” and a “cretin” who “rashly destroyed the capital of business ventures with which she was associated" conveyed eight defamatory imputations against her. The court agreed with four imputations, finding that Mr Aston had singled Ms Stead out for focus and "engaged in a sustained campaign of offensive mockery which amounted … to a form of bullying" imputing that Stead was a “cretin” who “rashly destroyed the capital of business ventures with which she was associated”.

"Honest Opinion" of a third party commentator

Section 31(3) of the Uniform Defamation Acts provides a defence to a publisher of defamatory matter, if the publisher can prove that:

1. the defamatory matter was an expression of opinion from a third party commentator, other than the publisher themselves;
2. that opinion related to a matter of public interest; and
3. the opinion was based on "proper material".

An opinion will be based on proper material if it is shown to be based on material that is substantially true. This means that even if all of the alleged the facts cannot be shown to be true, the defence is open if the opinion is reasonably based on those facts.

In the Power Ledger case, the defendants sought to rely upon the opinion of a Mr Peter Williams, a partner at Deloitte Consulting specialising in technology matters, who had been expressly identified by name in the Spruikers article.  

The court therefore needed to ascertain whether the defamatory matter in the Spruikers article constituted an expression of opinion of Mr Williams, which was related to a matter of public interest, and was based on proper material.

Statements of fact vs expressions of opinion

Justice Le Miere noted that of the 18 sentences making up the Spruikers article, only two were attributed to Mr Williams: the first was a statement to the effect that providing a financial incentive, or bounty, for individuals to promote initial coin offerings, could lead to unethical behaviour; the second was a quote from Mr Williams stating that these practices are "classic market manipulation techniques".

Justice Le Miere accepted that a defence of honest opinion could be where the statement of opinion from a commentator constituted only a small part of a broader article.  However, in this case, the statements purportedly attributed to Mr Williams did not actually convey the defamatory "sting" within the Spruikers article because Mr Williams had not commented on Dr Green or Power Ledger specifically. His statements about how providing financial incentives to initial coin offerings could promote unethical behaviour were only general in nature.  His Honour found that the Spruikers article would therefore not be understood by a reasonable reader to be a statement, whether of fact or opinion, from Mr Williams. Rather, the articles were statements by Mr Patrick, published by the AFR, which included some statements attributable to Mr Williams (amongst others).

Further, Justice Le Miere found that the defamatory matters within the Spruikers article were clearly articulated as statements of fact (the suggestion being, for example, that Dr Green had caused unethical market manipulation) as opposed to an expression of opinion.  His Honour noted that where statements of fact and opinion are so intertwined as to be indistinguishable, the defence of honest opinion will fail. 

Accordingly, Justice Le Miere found that the publication was not an expression of opinion by Mr Williams.

The opinion needs to be properly based on facts stated in what is written or be otherwise evident

In the Stead case, Mr Aston's comments were certainly statements that represented an honestly held opinion – but as Justice Lee noted “The lack of proper material being evident in the publications meant the risks associated with making out the honest opinion defence were always high.”  Applying a Dickensian reference, Justice Lee said that “Fairfax and Mr Aston proceeded Micawber-like, in the hope something might turn up to prove truth or allow substantial truth to be proved, notwithstanding the deficiencies in setting out some of the facts relied upon”.

The honest opinion defence failed in this case because it was not shown to be based on fact: “… putting the matter very generally, the issue was not Mr Aston being critical, or even highly critical in expressing his opinions, but rather the real problem… of proving that those opinions were properly based on facts stated in what was written.”

Justice Lee noted that this did not disentitle journalists from engaging in "legitimate criticism", and that "no one need be mealy-mouthed in denouncing what [they regard] as twaddle, daub or discord", but "unless one is prepared to prove the truth of what is said (or invoke some other recognisable defence), the opinion needs to be properly based on facts stated in what is written or be otherwise evident.”< /p>

^[1] Tamland was a fictional weather man played by Steve Carell in the Anchorman films, who described himself as polite and liked by others but whom doctors would later say had an IQ of 48 and was mentally disabled.^{Back to article}