A marketer of cosmetics entered into a franchise and sales agreement with a supplier. After the relationship between the parties soured due to allegations of fraud by the parties, the marketer expressed in various forums, including to clients and suppliers of the supplier, offensive statements regarding the conduct of the supplier.
The Court held that only some of the statements are indeed defamatory. In the event where a publication is claimed to be defamatory, the party who made the publication may claim that the statements were protected due to being true and that there is a public interest in the publication. When it comes to the conduct between businesses and the suspicion of fraud which has the potential to affect other customers, suppliers or employees, then there is public interest in informing those about such concerns or acts. The more the information touches and affects others, the less the right one has to prevent its publication. However, it must be noted that the publication should be made in good faith, not with the intention of causing harm, but out of the intention of protecting one’s own interests and protecting others from a similar situation. Thus, while the marketer was entitled to express its opinion and publicize the conduct of the supplier to its customers and suppliers, its statements to the supplier's employees that they should look for a new job show a lack of good faith and intent to harm which are not subject to protection. Therefore, some of the marketer’s statements amount to defamation that warrants compensation, although minimal compensation as the supplier did act fraudulently, in a way that tarnishes its own name and reduces its entitlement to compensation.