Beware: the negative online review!

A recent dispute between a building certifier and his client has landed in the District Court after the client posted allegedly defamatory comments on Yelp, True Local and a number of other public business review sites.

The building certifier sought damages in the sum of $150,000 and aggravated damages in the sum of $30,000 claiming the client’s reviews, which appeared on four different websites, were defamatory to himself and his business.

The client claimed that the reviews were not defamatory on the basis that they were true, his honest opinion and of qualified privilege.

The client engaged the building certifier in relation to a two storey house that the client intended to build on a vacant block of land that he owned in Narangba.

The original plans were then changed to incorporate a three car garage and a fee estimate was provided by the certifier. The fee estimate included the cost of performing certification services and three site inspections. The client duly engaged the certifier and paid an upfront fee. The certifier commenced work on the building approval application. The certifier subsequently discovered that the client had cancelled his bin services, which triggered the need for a material change of use application to be lodged with the council. The building certifier lodged this further application on behalf of the client at no cost to him. The application was approved, which then enabled the client to commence construction work on the vacant block.

The client later found that there had been a change to the town planning laws which meant that other townhouses could be built in the vicinity of his vacant block. He then changed his mind and no longer wished to build a two-storey house, where there was potential for it to be surrounded by townhouses.

After a few months of no communication, the client asked the building certifier whether he could just build the first floor of the approved plan or alternatively, look at a new demountable plan. The building certifier informed the client that these options would need a new building approval and possibly an amended development approval.

The certifier subsequently agreed to transfer the unused portion of the upfront fee paid, namely the cost of 3 site inspections, towards the additional cost of obtaining new approvals for the client’s revised building plans. This practice was at the discretion of the certifier and not part of their usual procedure.

The client did not end up engaging the certifier to perform the additional work and the certifier therefore terminated the client’s engagement. The client proceeded to seek a refund for the portion of the fee paid that related to work the certifier did not perform, namely the 3 site inspections. The certifier refused.

The client then took to a number of review sites and made a number of allegedly defamatory comments such as the following:

“This outfit are a nightmare, they are rude and obnoxious if you do not agree with Daryl, they also will not refund any money even for work they do not do. The council refund when an application is cancelled but not DG. They still have $750 of my money for three site visits they never did. Use another certifier, give these a miss, you will regret it if you use them!!!”

Further review read as follows:

“0.5/5 These make everything a nightmare, they blame the council for their delays. If Daryl disagrees with you is very rude and demeaning (sic). If you cancel them they keep your money even for work they never did. DO NOT TOUCH THIS COMPANY. I am still waiting for a refund due of $750 which they refuse to issue. The council have refunded their part but not DG.”

In defending a claim for defamation, commenced by the certifier, the client was able to successfully rely upon the defence of qualified privilege. This allows free communication in certain relationships without the risk of defamation.  This situation arises where the person communicating the statement has a legal, moral or social duty to make it and the recipient, that is the person reading the reviews in these instances, has a corresponding interest in receiving it. 

The Judge in this matter concluded that the publication of the reviews was reasonable in the circumstances. The Judge also concluded that it should be understood by the person reading the reviews that the client is giving his own views about his own dealings with the certifier from his own personal experiences. His Honour decided that it would haven been readily apparent that there had been a disagreement between the two parties, and that there are usually two sides to such disagreements.

The client was also able to successfully rely upon the defence of honest opinion. The Judge concluded that the reviews were expressions of opinion rather than statements of fact.

As the client was able to rely upon two defences against the claim for defamation, the certifier was unsuccessful in his claim and not awarded any damages.

The Court heard evidence from three other people looking to engage private certifiers who all read the reviews yet still engaged the certifier.

There have been other cases in recent times where people posting reviews to Facebook or posting comments to Facebook generally have been successfully pursued for defamation, with damages awarded. However, in this particular instance, the client successfully made out two defences and the defamation case failed.

Whilst it is obviously near impossible to keep every single client that you deal with happy, this case does show the importance of clearly discussing your retainer or contract with your clients from the start, including what it involves. This will help you to avoid disputes in the future which may see you commencing expensive Court proceedings and ultimately not being successful for any defamation claim that you may be able to raise, and potential damage to your professional reputation in the process! Contact one our dispute resolution solicitors here if you find yourself in need of advice related to defamation.