In the realm of tort law, where individuals seek remedies for wrongs committed against them, there exists a specific tort known as “malicious falsehood.” To some, it might sound similar to defamation, but the two are distinct in both nature and the elements required for a successful claim. Let’s look at malicious falsehood and understand its intricacies.
What is Malicious Falsehood?
Also known as injurious falsehood, malicious falsehood is a legal cause of action that arises when someone makes a false statement that disparages another person’s property or goods. This is different from defamation, which concerns false statements that harm an individual’s personal reputation.
Historically, there are a couple of terms associated with this tort:
- Slander of Title: This refers to a false statement related to a person’s ownership of property.
- Slander of Goods or Slander of Quality: This is about a false statement that degrades the quality of someone’s goods or products.
Interestingly, malicious falsehood is not just confined to tangible property. It can also involve false statements about a person’s intellectual property, like a unique technique they’ve developed.
Proving Malicious Falsehood
For a plaintiff to successfully establish a claim of malicious falsehood, there are a few essential elements they must prove:
- False Statement: The words or statements made about the plaintiff’s goods or property were false.
- Malice: The false statements were published with malicious intent. This could mean that the defendant either knew the statements were false or was indifferent to their veracity. It could also mean that the defendant acted with an improper dominant purpose, such as intending to harm the plaintiff.
- Special Damage: The plaintiff must have suffered specific economic harm as a direct result of the statement. This is a key element and reflects the economic focus of this tort. Any harm to the plaintiff’s reputation or feelings is irrelevant.
In Ontario, Canada, there’s a modification to the common law through the Libel and Slander Act. Under this statute, a plaintiff doesn’t need to prove special damage if the words in question were likely to cause financial harm and were published in a permanent form like writing.
Malicious Falsehood vs. Defamation
While both malicious falsehood and defamation involve false statements, their focus and implications differ:
- Focus: Malicious falsehood targets statements that harm a person’s property or goods, while defamation targets statements that harm a person’s personal reputation.
- Damage: Malicious falsehood requires proof of specific economic harm. In contrast, defamation typically revolves around damage to one’s reputation.
- Malice: For malicious falsehood, malice is a core component, meaning the statement was made with ill-intent or reckless disregard. In defamation, malice can come into play, particularly in determining defenses or damages, but it’s not always a central element.
- Identification: In malicious falsehood, the disparaging statement need not identify the plaintiff by name. If the public can reasonably infer that the statement refers to the plaintiff’s product or service, it could be sufficient.
In the world of false statements and their legal repercussions, malicious falsehood stands out as a unique tort focusing on economic harm stemming from disparaging remarks about one’s property or goods. It is a testament to the intricate ways the law seeks to protect individuals and businesses from the potential harm of false words. While it shares similarities with defamation, its distinct focus and requirements make it a vital tool in the arsenal of legal remedies available to aggrieved parties.
Example: Fraleigh v. RBC Dominion Securities Inc.
In the case of Fraleigh versus RBC Dominion Securities (DS) and De Abreu, the heart of the dispute was rooted in alleged malicious falsehoods. RBC Dominion Securities had alerted the Ontario Securities Commission about suspicious offshore trading, hinting at a possible connection to a trader named Rankin. De Abreu, who once assisted Rankin, provided testimony to the Commission that contradicted Rankin’s claims about not knowing Fraleigh. This cast a shadow of suspicion over Fraleigh, leading to his assets being frozen by the Commission. While the media speculated on a link between Rankin’s and Fraleigh’s activities, Fraleigh found himself in a compromising position.
Responding to this predicament, Fraleigh took legal action, accusing DS and De Abreu of intentional misleading with malicious falsehoods that adversely affected his business and banking relationships. He contended that DS and De Abreu’s statements to the Commission were attempts to divert attention and potentially protect senior figures within DS.
However, the court underscored that the evidence presented by De Abreu was under the protective umbrella of absolute privilege. The same privilege also covered DS’s communication to the Commission. Importantly, the court highlighted that even if one assumes that De Abreu provided false testimony or DS had malicious intentions in their communications, the absolute privilege would remain undisturbed. Given this robust protection, the court found no legitimate grounds for a trial on the matter.
In conclusion, the court upheld the motion for summary judgment, resulting in the dismissal of Fraleigh’s claims of malicious and/or injurious falsehood against DS and De Abreu.