Whitehaven Coal has rejected reports that a media outlet published the press release after contacting the company and confirming the information it contained was false.
Even so, the incident casts a spotlight on media liability in facilitating a hoax that has serious market repercussions, according to media lawyer Justine Munsie (pictured), a partner at Sydney-based Addisons Lawyers.
The ANZ-branded release claimed the bank had withdrawn $1.2 billion in funding from Whitehaven’s Maules Creek project. Media outlets began reporting on the release on Monday (7 January) and investors responded by dumping stock, which caused the share price to plummet by 31 cents.
Munsie told Lawyers Weekly that Whitehaven could launch a malicious falsehood claim against media outlets that published the release when they knew it was untrue.
“Malicious falsehood is the most likely source of redress,” she said.
“Claims of malicious falsehood ... require proof that a statement was made maliciously ... for example, where the person making it knew it was false and the plaintiff suffers specific economic loss.”
Whitehaven could also accuse media outlets of misleading and deceptive conduct, continued Munsie, but the ‘publisher’s defence’ (Section 65A) in the Trade Practices Act 1974 provides a general exemption to most of the media from liability for publishing misleading or deceptive material.
Whitehaven’s chairman Mark Vaile told the ABC that he plans to complain to the Press Council about media reporting of the hoax press release. Whitehaven declined to comment on the basis of the complaint.
The anti-coal activist behind the hoax, Jonathan Moylan, is currently being investigated by the Australian Securities and Investments Commission (ASIC). If convicted of disseminating false information that could impact on market securities, Moylan could face a 10-year prison term or hefty fines.
In October last year, trading in Macmahon Holdings was halted when hoax emails prompted takeover speculation. Retailer David Jones was also the victim of a hoax a few months earlier when an entity called ‘EB Private Equity’ supposedly launched a takeover bid.
Munsie warned media outlets to check the accuracy of press releases by contacting the source or conducting a background check. She admitted, however, that this level of due diligence is not always practical.