In Cheng v Lok  SASC 14, the Supreme Court of South Australia awarded a lawyer $750,000 in defamation damages against a woman who gave his firm a bad review on Google.
Gordon Cheng was born in China and was originally admitted to practice as a lawyer in Hong Kong. After moving to Australia, he began practicing in the ACT in 1988 and in South Australia in 1992, where he eventually become a barrister.
Mr Cheng holds a variety of accolades including being a fellow of the Australian and New Zealand College of Notaries, a member of the Notaries Society of South Australian, a member of the Law Society of South Australia and a member of the Chartered Institute of Arbitrators. He also holds a position as the legal advisor of the Australian Chinese Medical Association since 1994 and provides pro bono services to Chinese speakers since 2012 through a website.
A significant amount of his clients were members of the Chinese community in South Australia, as well as overseas. Mr Cheng's client base was significantly dependent upon referral and word of mouth from other clients.
In late 2018 or early 2019, Mr Cheng became aware that clients had start to leave his practice and instruct other lawyers. On 28 February 2019, he received a telephone call from a former client advising him of a review that had been left about his practice on Google My Business (website). It was posted by Isabel Lok, and warned people to stay clear of Mr Cheng's practice, that he lacked professionalism, provided misleading advices and would convince his clients to take a case to Court even though there the case was without merit.
Ms Lok then proceeded to change her name to "Bel" and then to "Cindy" on the website. After receiving complaints from Mr Cheng, the review was deleted by Google on 30 April 2019. During this process, he had posted a concerns notice pursuant to the Defamation, Summons and Statement of Claim against Mr Lok on the website in response to the review in an aim to control the damage being caused to his practice.
Ms Lok continued to post reviews using her father's name and the pseudonym "JYL". Mr Cheng met with the father, as he was known to him. Mr Cheng asked the father to delete the review; however, the father confirmed that the review had not been published by him. Mr Cheng then asked the father to call Ms Lok and ask the reviews to be removed; a heated argument between the father and daughter ensued.
According to the statistics provided by Google, 887 people had viewed the review in April 2019 and 727 in May 2019 and there was nothing to suggest that a similar number of people had not read the posts each month from October 2018. Mr Cheng had never met Ms Lok, was never retained as her lawyer and has never had contact with her apart from their exchange on the website.
The proceedings issued by Mr Cheng were heard in Ms Lok's absence. It was held that Mr Cheng had gone to extraordinary lengths to serve Ms Lok with the originating process, including obtaining an order of substituted service on 20 June 2019. Despite these efforts, Ms Lok did not respond to the service of the Summons or Statement of Claim and never appeared in any capacity.
Given her absence, her Honour Judge Bochner entered a default judgment against Ms Lok.
As such, a significant amount of the reported judgment was focused on reviewing the calculation of damages by Mr Cheng's accountant, which concluded that Mr Cheng had suffered a loss of income from 1 November 2018 to 31 January 2020. The accountant also concluded that the goodwill of Mr Cheng's practice was damaged by 86.28%, which was calculated using a 'Traditional Look Back Method'.
Her Honour found no reason to doubt the accountant's methods, as she had used widely accepted guidelines.
Her Honour did, however, raise a number of contingencies for which the Court needed to account, including the business recovering faster than predicted by the accountant, as well as 'other unforeseen circumstances occurring which may affect the profitability of the business into the future.' This meant that the accountant's numbers were subdued in her Honour's assessment of economic loss:
- Damages for past economic loss = $300,000
- Damages for future economic loss = $100,000
- Damages for loss of goodwill = $150,000
In the calculation of general damages, her Honour acknowledged the great deal of distress the publication caused and the anxiety resulting from the downturn of the business and having to retrench staff. Her Honour referred to Blue J's judgement in Duffy v Google Inc (No 2)  SASC 206, which stated that general damages must "be sufficient to signal the public vindication of [his] reputation". Her Honour's final assessment of general damages was $100,000 (well within the statutory cap).
Her Honour then considered aggravated damages. Aggravated damages are often awarded when someone publishes something that is deliberately false or defamatory. Her Honour found this to be the case here, due to Ms Lok's continual posting despite her original post being deleted and her failure to apologise. Aggravated damages led to an additional $100,000 being awarded.
Ultimately the final damages amounted to $750,000 and costs on an indemnity basis.
Negative Google reviews are publications for the purposes of the uniform Defamation Act.
Given the threshold for defamation is that a published false statement causes injury to reputation, posts made on the internet can very easily meet this threshold. This case acts as a reminder of using online platforms with an elevated level of caution and always treating them as a public domain.
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