In Shift2Neutral Pty Ltd v Fairfax Media Publications Pty Ltd [2014] NSWSC 86 Fairfax has succeeded in a defamation case brought against it by carbon credit firm Shift2Neutral.
In 2011 Fairfax published newspaper articles in the Sydney Morning Herald claiming that Shift2Neutral Pty Ltd was engaged in several deceptive, false and misleading business conducts. The headlines were "Revealed: wild claims of carbon credit firm" and "School deceived by carbon neutral scheme".
Shift's business activities include the provision of energy audits, renewable energy strategies, corporate environmental policies and carbon credit certification. It claimed its team would assist businesses in achieving a carbon neutral workplace.
Controversy over the company's claims is apparent in Goldsworthy v Seven Network Limited [2013] NSWSC 344, litigation over reporting by the broadcaster regarding Shift2Neutral and its director Brett Goldsworthy.
The carbon market has attracted attention on other cases, e.g. action by the ACCC resulting in ACCC v Prime Carbon Pty Ltd [2010] (Unreported).
In that litigation the ACCC alleging that Prime Carbon made false or misleading representations about the National Environment Registry (NER) and the National Stock Exchange of Australia (NSX), to the effect that the NER registry is the sole registry that meets the standards required of carbon credit registries by the Australian Government and the carbon credits listed on the registry, were specifically supervised or regulated by the Australian Government, the NER registry was the place where domestic and international buyers go to source carbon credits, the NER had a relationship with the Chicago Environment Registry which would assist NER-listed Australian carbon credits being traded on the international market, it was a broker and aggregator with the NSX, and enquiries about the purchase of carbon credits aggregated by Prime Carbon have been or are likely to be generated by or through the NSX, when this was not the case.
In the current case Shift argued that in its natural and ordinary meaning, the first article conveyed the followed defamatory imputations:
(a) The First Plaintiff [Shift2Neutral] is a fake company which shifts paper certificates instead of saving forests and cutting greenhouse emissions.
(b) The First Plaintiff falsely pretended to engage in deals to generate more than $1 billion of carbon credits because the deals did not exist.
(c) The First Plaintiff lied when it said that every carbon offset certificate issued has value and represents a real reduction in greenhouse emissions.
(d) The First Plaintiff made wild and false claims about carbon credits in order to persuade investors to buy them.
(e) The First Plaintiff has deceived investors by falsely informing them that its certificate for carbon offsets had value and represented a real reduction in greenhouse emissions.
(i) The Second Plaintiff controlled a fake company which shifts paper certificates instead of saving forests and cutting greenhouse emissions.
(j) The Second Plaintiff controlled a company which falsely pretended to engage in deals to generate more than $1 billion of carbon credits because the deals did not exist.
(k) The Second Plaintiff controlled a company which lied when it said that every certificate for carbon offsets issued has a value and represents a real reduction in greenhouse emissions.
(l) The Second Plaintiff [Brett Goldsworthy] is a liar about the value of carbon credits issued by his company.
(m) The Second Plaintiff controlled a company which made wild and false claims about carbon credits in order to persuade investors to buy them.
(n) The Second Plaintiff controlled a company which deceived investors by falsely informing them that its certificates for carbon offsets had value and represented a real reduction in greenhouse emissions.The New South Wales Supreme Court held that the two articles were not defamatory and injurious, as all the imputations conveyed about the carbon credit firm were all substantially true.
Nicholas AJ stated that
The defendants have succeeded in proving the substantial truth of all the imputations relied upon by the plaintiffs. I therefore direct that there be a verdict for the defendants and judgment accordingly, the judgment to be entered forthwith.
The question of costs remains outstanding. My prima facie view is that the plaintiffs should be ordered to pay the defendants' costs.
