Insights

In the judgement in the names of ‘Euro Resort Investments Limited (the “Plaintiff Company”) vs. Madeleine Bonnici’ (the “Defendant”) decided on the 30^th July 2021, the Court of Appeal found the Defendant guilty of defamation for inaccurately awarding very low ratings on Booking.com and this following her stay at an apartment owned and managed by the Plaintiff Company. The Court reached this conclusion after a thorough analysis of the relevant provisions of the Media and Defamation Act, Chapter 579 of the Laws of Malta (the “Act”’). While the Court of Appeal agreed with most of the findings of the Court of Magistrates, it had a diverging opinion on whether unjustifiably giving low ratings on a public forum amounted to an ‘honest opinion’ as per Article 4(2) of the Act. The Court of Appeal found in the negative, overturned the judgement of the Court of Magistrates and awarded the Plaintiff Company €200 in moral damages.

Background to the proceedings before the Malta Courts

The Defendant had rented an apartment from the Plaintiff Company for which she had been asked to pay a refundable security deposit of €120. However, a director of the Plaintiff Company retained €87 out of the said deposit to cover the price of accommodation for an extra guest which he claimed had stayed in the apartment, and for alleged damages caused during the Defendant’s stay. The Defendant on her part denied such claims and argued that the extra individual in question had arrived in the morning and thus no charge was due, while also denying responsibility for any alleged damages. The Plaintiff Company nevertheless retained the mentioned amount and this despite requests by the Defendant for documentation and proof. This led her to publish a negative review on Booking.com stating:

‘…worst host ever with bad manners. What do you like – nothing. What you dislike – everything’.

She also gave the apartment a 2.5 out of 10 rating in all categories (Staff, Cleanliness, Location, Comfort and Value for Money), this being the lowest rating possible. This negative review and low ratings caused the apartment in question to be less prominently featured on the Booking.com platform as its overall average rating fell from a 9.6 to an 8.6 when considered over a period of 2 years and to a 7.9 when calculated over the preceding year alone.

This review led to unfavourable consequences for the Plaintiff Company. In fact, following the negative review published in March 2019, the apartment was not leased again for the remainder of the year through Booking.com. The Plaintiff Company sued the Defendant for defamation under the Act claiming that she had acted maliciously and had caused the Company ‘serious financial loss’. The Court of Magistrates found that the statement made, and the ratings given amounted to an ‘honest opinion’ in terms of the Act and thus did not find the Defendant liable. The plaintiff appealed the decision, and the Court of Appeal overturned the decision of the Court of Magistrates, finding for the Plaintiff Company.

Considerations of the Court of Appeal

Firstly, the Court of Appeal agreed with the assessment of the lower court when it established that the publication of the online review in question was in fact defamatory in terms of Article 3 (4) of the Act. This Article provides that –

(4) Statements are not defamatory unless they cause serious harm or are likely to seriously harm the reputation of the specific person or persons making the claim:

Provided that, for the purposes of this article, harm to the reputation of a body that trades for profit is not serious harm unless it has caused or is likely to cause serious financial loss.

At this point, the Court of Magistrates had already provided an analysis on the changes brought about by the Act whereby it focused on the fact that the threshold for what constitutes defamation has become significantly more onerous to prove. Prior to the introduction of the Act, the threshold was one of ‘substantiality’ of the harm caused whereas now it is one of the ‘seriousness’ of said harm. Therefore, given that the Plaintiff Company falls within the definition of ‘body that trades for profit’, the Court now had to establish whether ‘serious financial loss’ had been caused.

The Court of Appeal further concurred with the lower Court that the onus on the Plaintiff Company is to prove potential serious financial loss and not actual loss, owing to the difficulty in establishing a causal link between the defamatory statement and any financial loss suffered.

Therefore, even though the apartment in question was still leased throughout 2019 albeit through other online platforms, meaning that its occupancy rate was nevertheless very high, both Courts still held that a potential serious financial loss was evident as:

1. The apartment was not leased through com for the remainder of 2019 following the negative review
2. Two prior bookings made through com for the said apartment had been cancelled.
3. The negative impact of the publication was continuous as such reviews remain online for 2 years.

Having established the above, the Court then considered the Defendant’s pleas which rested on Article 4 (1) of the Act, through which the factual veracity of the alleged defamatory statement can serve as a defence, and Article 4 (2) of the Act which establishes the criteria necessary for such a statement to be considered as an ‘Honest Opinion’ and thus not actionable.

Article 4 (1) of the Act holds that where ‘the imputation conveyed by the statement complained of is substantially true’ one cannot be found liable for defamation. Both the Court of Magistrates and the Court of Appeal agreed that in this case the statement ‘the worst host ever with bad manners’ was not a fact but rather a value judgement made by the Defendant and thus did not fall within the ambit of Article 4(1).  The Courts insisted that even so value judgements must still be based on facts which are substantially true, albeit it is not necessary to prove the veracity of the fact itself. In dealing with the distinction between facts and value judgements the Court of Magistrates referred to the case Cumpănă and Mazăre v. Romania in which the European Court of Human Rights highlighted that ‘even a value judgement may be excessive if it has no factual basis to support it’.

The difference in opinion between the two Maltese Courts lies with the interpretation of the criteria listed in Article 4(2) of the Act, all of which must be satisfied for a statement to be an ‘honest opinion’ and thus, as stated above, not actionable. The main point of contention was whether the general nature of her negative review and the fact that she awarded low ratings across the board, including for categories such as the location of the apartment, could be justified. The Court of Appeal rejected the conclusion of the Court of Magistrates that a low rating across all categories was reasonable based on the justification that it reflected her general disappointment. Instead, it concluded that from the testimony of the Defendant it was clear that the 2.5 rating given in certain categories were not accurate nor deserved. It noted that if the Defendant’s aim was to prevent other consumers from suffering the same negative experience as she had, the Defendant had the opportunity to be more specific instead of publishing a very general comment that offered no context or explanation. The Court of Appeal also noted that she was aware of the harm she would cause and of the fact that her actions would negatively impact the Company for the relatively long period of two years, and thus she had been obliged to make such considerations before publishing. Not being satisfied by one aspect of the accommodation did not give the Defendant the right to issue such a general review and low ratings.

The Court of Appeal also agreed with the considerations of the Court of Magistrates that once the Plaintiff Company had sought to use the portal Booking.com to market its properties, it had, in turn, accepted the fact that it would be subject to the clients’ scrutiny who are encouraged to leave reviews and ratings on their experience. While both Courts further emphasised that caution should be exercised because should consumers be exposed to actions for defamation when they choose to allocate low ratings, freedom of expression would be curtailed arbitrarily, which goes against the spirit of the law, the Court of Appeal insisted that freedom of expression is subject to limitations, and cannot be abused of.

The Court of Appeal, therefore, overturned the decision of the Court of Magistrates and awarded the Plaintiff Company €200 in moral damages. No pecuniary damages were awarded since no actual financial loss could be proven.

Commentary

The contrast between the decision of the Court of Magistrates and that of the Court of Appeal highlights the fine line which exists between ensuring that freedom of expression is not unnecessarily curtailed capriciously while also safeguarding against the spread of misinformation causing harm to others. This is particularly important in the age of the internet as the ability to convey misinformation has been magnified rapidly and significantly. This, coupled with the fact that online comments have a significantly higher reach, has in turn burdened the Courts with interpreting the law of defamation in new avenues.

The authors would like to thank Kelly Cini, a student intern at Ganado Advocates, for her assistance during the drafting of this article.