Following the success of a smart phone application, Natalie Annabelle Gibson pitched a cookbook under the same name “The Whole Pantry” to a book publisher. The book was a collection of recipes based on a narrative that Ms Gibson was diagnosed with cancer which she treated, not with conventional medicine, but by eating a whole foods diet. This story was set out in the book’s introductory paragraphs and promotional materials. The story was, in fact, part of a web of misrepresentations by Ms Gibson

When suspicions were raised in the media about Ms Gibson’s story, the publisher withdrew the book. Apple and Google later withdrew the app. The publisher later acknowledged that it did not fact-check the author’s “cancer story”. As the book was “a collection of recipes”, the publisher stated that it did not consider this to be necessary

Following an investigation by Consumer Affairs Victoria (CAV) – in which the publisher willingly co-operated – the publisher agreed to an enforceable undertaking which included making a $30,000 donation to the Victorian Consumer Law Fund (CVA media release on 6 May 2016)

CAV also commenced court proceedings against Ms Gibson and her company, Inkerman Road Nominees Pty Ltd (formerly, Belle Gibson Pty Ltd). The judgment was delivered by Justice Mortimer of the Federal Court on 15 March 2017

Background to the case While developing and promoting the app and book, Ms Gibson made several claims:

  • she had been diagnosed with brain cancer in 2009;
  • she was given four months to live;
  • she had received conventional cancer treatments, which she rejected in favour of natural remedies; and
  • natural remedies brought her back to health.

Ms Gibson also made representations about donating a portion of all revenue from sales of the app and book to various charities. These statements were made on her company’s Facebook and Instagram accounts and during media appearances

Around 10 months after it published the book, the publisher requested that Ms Gibson attend a media training session. Ms Gibson spoke at length with two of the publisher’s employees about numerous treatments she claimed to have had. The transcripts of this media training session, which were tendered as evidence in court by CAV, show that Ms Gibson’s responses to the publisher’s questions were evasive

From around March 2015, several newspapers reported that funds Ms Gibson claimed to have donated from book and app sales and promotional events, had not been donated. Ms Gibson issued a response, blaming her company’s cash-flow problems. It was around this time that the Asylum Seeker Resource Centre (one of the charities that Ms Gibson’s company had allegedly donated to) lodged a complaint with CAV

Amid further doubts about her credibility, Ms Gibson agreed to an interview with the Australian Women’s Weekly, in which she confessed that she never had cancer. She was then paid $75,000 by Channel Nine for an interview on 60 Minutes, which aired on 28 June 2015. In that interview, Ms Gibson said, among other things, that she had been lied to by her supposed doctors

The Court’s decision In holding both Ms Gibson and her company liable for breaches of the Australian Consumer Law (ACL) and equivalent Victorian legislation, Justice Mortimer made the following key comments

Ms Gibson’s name and the “cancer story” were critical to her “brand” and inextricably linked to sales of the book and app. Her Honour noted that “part of being convinced to buy what Ms Gibson was selling would involve accepting that she was not a hypochondriac or an irrational person” (at [162])

Although Ms Gibson claimed (in response to Notices issued by CAV) that she had only later become aware that she did not have cancer, her Honour held that silence or non-disclosure is just as capable of constituting misleading or deceptive conduct or misrepresentation

While most of Ms Gibson’s statements were found to be misleading or deceptive, these statements did not amount to unconscionable conduct (which is more difficult to establish). Based on the evidence presented by CAV, her Honour could not conclude that Ms Gibson had “concocted a ruse from the start, in order to deceive consumers into purchasing her products, knowing that she was doing so on an entirely falsified basis.” The Court also held that the statements were not necessarily “testimonials” as they were about Ms Gibson herself and what had happened to her

Warning signs? In addition to Ms Gibson’s questionable responses at the media training session, Justice Mortimer considered some instances where doubts were raised to the publisher’s employees

Allegations that Ms Gibson’s claims were false and that she had fabricated her illness were brought directly to the attention of one of the publisher’s employees. When questioned, Ms Gibson informed that employee that “one of her friends had become jealous and had ‘turned’ on her”

There was also an email from one of the publisher’s contractors attaching a draft document titled “contingency communications”. This document set out media statements that Ms Gibson could make to explain any fabricated part of her story

Her Honour also considered an email from Ms Gibson in January 2015 to the publisher. In that email, Ms Gibson stated, among other things, that she was about to undergo surgery to remove tumours. Her Honour commented that “no doubt, representations of this kind encouraged [the publisher] to continue to market and sell the book until the further revelations in March 2015” (at [193])

Although there were some warning signs, considering the statements made directly by Ms Gibson, these probably did not translate to alarm bells. Her Honour said it was likely that Ms Gibson remained under some delusion and she may have had other psychological and psychiatric issues

Charitable donations The Court recognised that people have different motivations where goods or services are purchased for charity: they are not purchasing to gain something for themselves but to help others. This was an important distinction

Contrary to statements made, Ms Gibson’s company was found to have only donated $10,000 of $420,000 received from sales of the app and book and the publisher’s advance. The donations were sporadic and likely motivated by the disquiet that emerged concerning the truthfulness of Ms Gibson’s claims

The representations made about charitable donations elevated Ms Gibson’s public profile and secured her significant promotional opportunities. The Court concluded that she “deliberately played on the genuine desire of members of the Australian community to help those less fortunate” (at [242]). The representations were therefore not only misleading or deceptive, but amounted to unconscionable conduct

Lessons On 7 April 2017, Justice Mortimer ordered, among other things, injunctions restraining Ms Gibson from making certain representations. Ms Gibson was also ordered to pay $30,000 towards CAV’s legal costs. The Court is yet to decide on the quantum of penalties that Ms Gibson must also pay

This case contains some important lessons:

  • Publishers should exercise caution in relying solely on representations made by authors, for example, when assessing pitches.
  • Any statement which forms part of a narrative (including in introductory comments and promotional material) should be thoroughly reviewed and fact-checked.
  • Any statement made in the course of promoting goods or services (not just testimonials) may be closely examined under the ACL. This is especially so, if health claims are made.
  • Statements on social media are equally important to check. This is further demonstrated by recent cases where social media “influencers” and lifestyle bloggers that have come under legal scrutiny.
  • Warranties and indemnities are only as good as an author’s ability to pay them.

The full case can be read here: Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 (15 March 2017) and the decision on costs can be read here: Director of Consumer Affairs Victoria v Gibson (No 2) [2017] FCA 366 (7 April 2017)

If you would like any advice about publishing contracts or the Australian Consumer Law, please contact our publishing and copyright lawyers Adam Simpson or Ian McDonald (special counsel).