Online defamation: a warning to anonymous posters

A recent decision of the Federal Court of Australia has sent a stark warning to online posters who make defamatory comments under the guise of a fake online alias.  In McCrae v Reynolds [2015] FCA 529, the Court ordered ‘HotCopper’, Australia's most popular stock market internet discussion site, to make discovery of all documents directly relevant to identifying the description of the user known as ‘zzedzz’.

The prospective applicant in the case, Wayne McCrae, is a director of an ASX listed mining company called CuDeco Limited (CuDeco).  In addition to HotCopper, a person known as Edwin Reynolds was named as a respondent, on the basis that Mr McCrae held a reasonable suspicion that Mr Reynolds (under the username ‘zzedzz’) had, over a number of years, posted derogatory comments about Mr McCrae’s management of CuDeco.

These comments, among other things, alleged that Mr McCrae had misled the ASX in respect of deadlines and the ore grade of certain mineral stockpiles.  Mr McCrae had initially been made aware of the posts by a shareholder of CuDeco in early 2013. 

Mr McCrae, via his legal representatives, issued correspondence to HotCopper on two occasions and requested their cooperation in the termination of the ‘zzedzz’ account and for the provision of details regarding the identity of ‘zzedzz’.  These requests were refused on the basis that HotCopper had no obligation to disclose the information. 

The decision in McCrae illustrates how a person can utilise the Federal Court Rules relating to preliminary discovery to compel an operator of a website to disclose the identity of a user who posts defamatory content on that website.                 

Applying the criteria in Rule 7.22, the court found that Mr McCrae:

• had a possible cause of action in defamation
• was unable to ascertain the description of the prospective respondent, and
• had made reasonable attempts to ascertain the description of the prospective respondent, prior to seeking relief from the Court. 

The court found that HotCopper was likely to know the description of the prospective respondent, and therefore thought it appropriate to make an order requiring HotCopper to make discovery of all documents directly relevant to identifying the description of the user ‘zzedzz’.  The decision may yet be appealed, but in the meantime, it is a significant development in favour of those persons who feel aggrieved as a result of an online defamatory post.

Andrew Poulton, Tim Case