Defamation action

Problem

Mr Wright, a shareholder of a company, had been served with a writ alleging he had defamed that company and its managing director in an online shareholders’ forum.

Mr Wright had been advised by the solicitors acting for the company and managing director that the damages could be in the vicinity of $80,000.

Solution

We were instructed by Mr Wright to defend the action and filed a statement of defence raising grounds of honest opinion amongst other defences.

Upon investigating further, we discovered the company had more than 10 employees and was therefore ineligible under the Defamation Act to commence a cause of action for defamation in Western Australia.

Outcome

We advised the company and the managing director’s solicitors that we would file a notice to strike out the company’s claim against Mr Wright.

Whilst the managing director was still eligible to continue with the defamation action against Mr Wright, his solicitors agreed to discontinue the company’s claim. Instead, they settled with the managing director’s claim against Mr Wright for $10,000 plus a notice of retraction from the company.