The Loch Ness monster of torts

Injurious falsehood is the Loch Ness monster of torts: it’s out there, somewhere, but confirmed sightings are rare.  Exactly why it’s such an elusive beast was emphasised in a recent decision of the Supreme Court of New South Wales (Judo Bank Pty Ltd v Elali [2026] NSWSC 48).

Late in 2024, a man named Nathan Elali became aggrieved by a dispute between Judo Bank and the trustee of a discretionary trust of which he was a beneficiary.  Mr Elali conducted a brief billboard campaign in which he rented mobile digital billboards, and bicycle billboards, in Sydney and Melbourne, displaying the message that Judo Bank was “fraudulent”, “misleading”, “deceptive” and “dishonest”. 

Judo Bank is too large a corporation to have standing to sue for defamation.  Instead, relying on the tort of injurious falsehood, it sued in the Supreme Court seeking an injunction restraining Mr Elali from repeating his publications.

Hmelnitsky J found that Judo Bank had established two of the necessary elements of the action.  The judge accepted that the statements were false, and there was no dispute that they had been published.  There had been no evidence of loss, but Hmelnitsky J accepted that this was not a bar to the pursuit of an injunction.

But Judo Bank’s claim foundered on the question of malice.  In order to be actionable, the publication of the false statement must have been malicious: that is, published with an intention  to cause harm without just cause or excuse.  Hmelnitsky J found that Mr Elali’s dominant purpose in publishing the advertisements was not to injure the bank, but to expose what he considered to be its “financial reporting irregularities”.  That cause “may have been misguided”, but the judge accepted that Mr Elali honestly believed it – and Judo Bank therefore failed to discharge its burden of proving malice.  The summons was dismissed.

The case illustrates just how difficult it is for a plaintiff to succeed in an action for injurious falsehood.  Here, the judge accepted that very serious, false allegations had been published, yet still the plaintiff failed – because of the difficulty of proving malice. 

Judo Bank v Elali, incidentally, also emphasises a curiosity in our legal system: that most judges are trained in law, but not psychology, yet in many cases they are called upon to identify the motivations of the parties or witnesses who appear before them.  This is absolutely no criticism of Hmelnitsky J, who carried out precisely the task the law required of him.   But it asks an awful lot of our judiciary to expect them, to be not only expert in the law, but also deeply attuned to the mysteries of human behaviour.