Online forum Whirlpool has claimed victory in a lengthy legal battle with a Melbourne-based financial services provider over a series of negative online posts.
But WCS Group, which is based in the Melbourne suburb of Essendon and licensed through the National Australia Bank, has hit back by saying the resolution of the legal claim does not mean Whirlpool has “won”.
WCS Group initiated the legal action in the Supreme Court of Victoria in August 2014, alleging a series of posts in May 2014 by Whirlpool user ‘homemadecook’, who it believed was a competitor or disgruntled former employee or contractor, had damaged its reputation and caused financial losses.
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The group said the comments were “false, misleading or deceptive or likely to mislead or deceive” and Whirlpool had contravened Australian Consumer Law by not removing them.
According to the statement of claim filed by WCS Group at the time, seen by SmartCompany, the posts by ‘homemadecook’ claimed WCS Group offered them its services for $18,000 and promised to reduce their mortgage to 10 years, based on claims the user’s income would increase over time. Another post said advice from other Whirlpool users helped them avoid using the group’s services.
WCS had previously contacted Whirlpool to request the posts be deleted and argued Whirlpool “derived a commercial benefit” from leaving the comments on the forum. However, it is well-known Whirlpool is not a commercial operation.
Whirlpool said in August it intended to “defend the case vigorously” and on Wednesday claimed victory in a statement provided to SmartCompany, saying WCS Group had discontinued its legal claim and will now be required to pay the forum’s legal costs, which its legal representatives estimated could amount to a total legal bill of more than $200,000.
Throughout the protracted legal battle, Whirlpool said it had taken a “precautionary step” of removing the posts by ‘homemadecook’ from public view after WCS chose to subpoena telecommunications records to attempt to prove who made the posts.
But Whirlpool director Simon Wright said in the same statement the case was not about the authenticity of the posts by ‘homemadecook’ but the implications under Australian Consumer Law of those posts remaining on Whirlpool.
“If WCS was successful in this argument, it would have meant that every website, forum and blog operating in Australia would need to delete any post on demand,” Wright said.
“Or alternatively be ready to prove the truthfulness of everything everyone has written and risk being sued by anyone who felt that their business has been painted in a negative light. The result would be an untenable curtailing of free expression and render meaningless the carefully considering balance achieved by Australia’s unified defamation laws”.
Referring also to a previous case involving accounting software firm 2Clix Australia in 2007, Wright said the result “sends a strong message to anyone thinking that they can bully Whirlpool into removing posts by threatening legal action”.
“Whirlpool has again demonstrated its resolve and willingness to defend itself so that our community remains free to post both positive and negative views about businesses, as long as they comply with our forum rules and Australian law,” Wright said.
However, WCS disputed Whirlpool’s claim to victory, telling SmartCompany this morning it has discontinued the proceedings against Whirlpool because the case had been a means of uncovering the identity of ‘homemadecook’.
WCS Group has subsequently launched legal action against a former contractor, George Papadopoullos, in relation to the posts.
“It is unfortunate that Whirlpool would not release this individual’s identity sooner and that WCS had to take them to court for such information,” WCS Group said in a statement to SmartCompany.
“Nevertheless this was the case and we are now happy to move on to the next step of commencing court proceedings against this former employee/contractor.”
WCS Group said the removal of the posts by ‘homemadecook’ by Whirlpool in November 2014 “was a success to WCS”.
“Whirlpool has not ‘won’ this case at all and WCS is very satisfied with the outcome,” the company said.
“WCS has not discontinued this proceeding against Mr Papadopoullos and although WSC strong believes that Whirlpool should properly verify information before they publish it, this case was never about Whirlpool, as Whirlpool would like to believe.”
“Whirlpool directed WCS to obtain a court order before they would hand over the identity of Mr George Papadopoullos (a former contractor of WCS Group) and this is what WCS did,” the company added.