Autron Electronics Pty Ltd v Boiling Billy Publications Pty Ltd
[2005] VSCA 289
•8 December 2005
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No.3705 of 2005
| AUTRON ELECTRONICS PTY. LTD. | |
| Appellant | |
| v. | |
| BOILING BILLY PUBLICATIONS PTY. LTD. AND ORS. | Respondents |
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JUDGES: | CHERNOV, EAMES and ASHLEY, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 10 November 2005 | |
DATE OF JUDGMENT: | 8 December 2005 | |
MEDIUM NEUTRAL CITATION: | [2005] VSCA 289 | |
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Defamation – Defamatory imputations – Whether meanings as found were against the evidence and the weight of evidence – Whether a finding of justification in respect of one meaning was against the evidence and the weight of evidence – Whether judge erred in finding that a second meaning was not defamatory of the appellant.
Trade Practices – Misleading and deceptive conduct – Whether judge erred in finding that statements made by respondents did not constitute offending conduct – Whether proof of any damage by conduct of the respondents.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr. J. Ruskin, QC with Mr. C.B. Thomson | Macpherson & Kelley |
| For the Respondents | Mr. R. McGarvie, SC with Mr. S. Wilmoth | Bruce Caldwell and Associates as agent for Sautelle White Lawyers |
CHERNOV, J.A.:
I have had the advantage of reading, in draft, the reasons for judgment of Ashley, J.A. and agree that, for the reasons given by his Honour, the appeal should be dismissed.
EAMES, J.A.:
For the reasons given by Ashley, J.A., I agree that the appeal should be dismissed.
ASHLEY, J.A.:
Statement of the case
This is an appeal from orders made by a County Court judge on 17 December 2004 dismissing claims by the appellant, Autron Electronics Pty Ltd (“Autron” or “the appellant”) against the respondents, Boiling Billy Publications Pty Ltd, Craig Lewis and Cathy Savage, (“Boiling Billy”, “Lewis”, “Savage”, or “the respondents”). The appellant’s unsuccessful claims were for relief in consequence of alleged defamation and for breach of s.52, Trade Practices Act 1974 (Cth.). They arose out of the publication of two newsletters, on the internet and by email, on 19 March 2004.
Circumstances pertinent to publication of the newsletters were as follows:
· The appellant was at material times a manufacturer and seller of a cruise control device – the “Auscruise” cruise control (“the device”) which could be fitted to vehicles after they had been built. As at 2003 the appellant had been in business for more than a decade. The device had been developed by it, and had been on the market since 2001. At pertinent times, sales of that item accounted for about 80% of the appellant’s overall sales income of about $3 M per annum.
· Boiling Billy, incorporated in June 2002, was the corporate alter ego of Lewis and Savage. They were adventurers and writers who had first gone into partnership in 1996; and who were employed by Boiling Billy after its incorporation. Their areas of interest, upon which they wrote books and articles, were mainly camping, four-wheel driving, travelling, and involving themselves in outdoor activities generally.
· Boiling Billy had a website, one page of which was headed, at pertinent times, “Explore Australia by 4 WD”.
· Sometime before March 2003, Lewis and Savage were commissioned to undertake two major four-wheel drive adventures. They were to provide text and photographs to the company which commissioned them. They set up a Land Rover for the purpose. In their Newsletters, I interrupt the narrative, they called it “The Brick”. Part of their preparation involved the fitting of an “Auscruise” device to their vehicle. The installation was carried out in Sydney by Mr Colin Devaney, owner of a mobile cruise control installation business, on 12 March 2003. Devaney’s only connection with Autron was that he had been approved by it as an installer of its devices.
· It was always the intention of Lewis and Savage to post newsletters on Boiling Billy’s website concerning their adventures. Readers of the website were so advised in advance of the odyssey beginning.
· Between March and November 2003 Lewis and Savage travelled extensively, mainly in Western Australia, South Australia and the Northern Territory. During that period an intermittent fault affected their vehicle. The engine control checklight would come on and the vehicle would go into “limp home mode” – that involving travel at walking pace.
· In the period to which I have just referred, the vehicle was inspected by dealers in South Australia and Western Australia. No fault was detected as could explain what was happening.
· Until November 2003 it was generally possible to clear the problem by starting and restarting the engine a number of times. That ceased to be a remedy on 22 November 2003, on which date Lewis and Savage were at Tumut in New South Wales. “The Brick” had to be taken to Canberra on a flatbed tow truck.
· At Canberra, on 24 November 2003, a mechanic employed by Rolfe Classic Land Rover traced the problem to the Auscruise device. There were two possibilities – that the fault was within the device; or that it was in the connections between the device and the vehicle. If it was the former, then the probability was that the fault was in the throttle actuator module (“the actuator”).
· Lewis spoke with Mr David Petronio of Autron on 24 November 2003, telling him what had happened. He asked about the length of the warranty period – it was 12 months. He said that Boiling Billy was out of pocket. Petronio said that if the Auscruise device was at fault, then Autron would reimburse Boiling Billy.
· Between 24 and 27 November there were several discussions between Lewis and Petronio, and a discussion between Autron’s engineering manager, Mr Frank Fogl, and a representative of Rolfe Classic. By 25 November Autron had become adamant that the fault was not in the Auscruise device; but was rather in the vehicle itself, or in the installation of the device. That position was restated on 27 November. At that stage, of course, Autron had neither inspected nor tested the device.
· Lewis and Savage then resumed their odyssey, but with the device disconnected. In the next two months they travelled about 50,000 km without incident.
· On 23 January 2004 the original installer conducted tests in which he replaced the old actuator with a new actuator, and then reversed the process. On each occasion that the old actuator was installed, the problem recurred; not so when the new actuator was fitted. The installer reported the test results to Fogl that day.
· The old actuator was returned to Autron. A standard test was performed on it, and no fault was detected. Fogl closely examined the components and their connections. He found no fault. The judge accepted the reliability of the men’s evidence about those matters.
· On 10 February 2004 Petronio told Lewis that the device had “tested ok”, and that Autron would not be doing anything vis a vis the warranty.
· On 19 February 2004 Lewis lodged a claim against Autron with the New South Wales Office of Fair Trading. The claim sought reimbursement of costs incurred in establishing that the device had caused the problem.
· On 26 February 2004 the Office of Fair Trading notified Lewis that the more appropriate body to deal with the issues was the New South Wales Motor Vehicle Repair Industry Authority.
· On 17 March 2004 the Authority informed Lewis that it had forwarded a copy of Lewis’ complaint to Devaney – that is, the installer – with a view of bringing about a settlement between them. The letter which the Authority sent to Devaney completely missed the point. Lewis had complained about Autron’s conduct, not the conduct of Devaney.
· Lewis, it seems, did not receive the Authority’s letter until after 19 March 2004; but evidence showed that by 12 March 2004 he was aware that the Authority now had carriage of the matter.
· The Authority, at least, had no jurisdiction over Autron, which was Victorian-based. It was perhaps for that reason that it focused on the relationship between Boiling Billy/Lewis and Devaney. As I have said, Lewis never suggested that any claim lay against the latter.
· On 18 March 2004 Savage emailed the two impugned newsletters to the webmaster for the Boiling Billy site. They were posted on 19 March 2004 and their text was emailed to a number of addressees.
· Only a smallish part of each Newsletters bore upon the issue which had developed between Boiling Billy and Autron. What was relevantly said was this:
“Number 7 – Nov/Dec 2003
The Brick also had a visit to our Land Rover dealer, Rolfe Classic, in Canberra, to check on a problem that had been occurring intermittantly [sic]. At times the vehicle’s engine management light was coming on and we had no throttle, which we thought was a problem with the fuel sensor. After many hours, Rolfe Classic found that the aftermarket Autron Cruise Control we had installed was the cause. To say that we were disappointed with Autron’s response to the problem is an understatement and we are currently taking action against them through the NSW Dept of Fair Trading. We’ll keep you posted on the outcome but surfice [sic] to say at this time we won’t be using this company’s products in the future!
Number 8 – January/February 2004
Whilst in Sydney we were able to catch up with Colin from Southside Cruise Control who installed our Autron Cruise Control as we were keen to have the faulty unit rectified. Colin installed a new module which to date has been working as you’d expect. Autron still advise that the original module is not faulty and at the time of writing we are in proceedings with the Dept of Fair Trading to recover costs incurred.”
In the first newsletter, the words “to say that we were disappointed with Autron’s response to the problem is an understatement” were repeated, in enlarged print, as a box within the body of the document.
· The appellant commenced its proceeding on 4 May 2004.
By its statement of claim the appellant pleaded that it had been defamed. It alleged that statements which I set out a moment ago had these meanings: That it -
“(a)Was the manufacturer of a faulty product and was thereby incompetent;
(b)[Had] refused to offer any after sales support to the retail purchaser of its products, and was thereby a disreputable and unreliable manufacturer;
(c) Was the manufacturer of an unreliable product that could leave users stranded in remote and dangerous places in Australia when touring by four wheel drive vehicles and was thereby an unreliable and incompetent manufacturer;
(d)was the object of a valid and subsisting claim for damages or costs initiated by some or all of the Defendants, and . . . was thereby a disreputable trader that could not be relied upon to rectify faults in its products that is, ‘stand behind’ its products;
(e) . . . was a disreputable and unreliable trader;
(e)[sic] . . . was not a fit and proper company to be a manufacturer of important automotive components.”
The appellant further pleaded that the statements had been made in the course of trade and commerce within the meaning of s.52, Trade Practices Act, and that the defendants had engaged in conduct in breach of that section. The breach, as particularised, depended upon it being untrue that the device was faulty; and/or, in effect, upon the falsity of the second pleaded meaning of the statements, to which meaning I will refer in a moment.
By their defence, the respondents denied that they had defamed the appellant. They disputed the meanings contended for by the appellant. They proposed alternative meanings. They raised pleas of qualified privilege and fair comment. They disputed the claim under the Trade Practices Act.
By interlocutory order made 22 June 2004, a judge of the County Court ordered that certain passages in the two newsletters be removed from the website. The passages had to do with the respondents’ assertion that a proceeding was on foot through or with the New South Wales “Department of Fair Trading”. The respondents, of course, complied with the order.
The matter was tried by a judge sitting alone over a nine day period in November and December 2004. It was that hearing which culminated in the making of the orders which are now attacked.
The trial was much taken up, it seems, with the question whether the device was faulty; or whether the fault lay in the vehicle itself, or in some pertinent connections. Upon the whole of the evidence, the learned judge was satisfied that the problem lay with the device. His Honour concluded that –
“ . . . on the balance of probabilities, the original actuator had developed an intermittent fault which was not detected by Autron in February 2004 in the factory testing, which may not have completely simulated testings ‘in the field’, where it was conclusively demonstrated by Devaney on 23 January 2004, that the original activator (sic) caused the vehicle to go into ‘limp home mode’ but the replacement actuator did not. ”
The learned judge further found that Autron’s approach to Lewis’ complaints had been reasonable up until, but not beyond, Devaney’s field tests on 23 January 2004. It had been unreasonable thereafter for Autron to deny liability under the warranty. It had been apprised of the results of the field tests. A conclusion that the device was faulty was not gainsaid because the actuator had not failed in test conditions in the factory.
The learned judge, again, held that the letter of 12 March 2004 written by Lewis to the Authority –
“ . . . compels me to draw the inference that both Lewis and Ms Savage knew at the date of publication of both Newsletters that they no longer had a claim on foot against Autron, either before the Department of Fair Trading or the MVIRA.”
I turn to the meanings proposed by the appellant and the meanings found by the learned trial judge.
His Honour summarised the substance of the meanings contended for by the appellant to be that it –
“(a)was the manufacturer of a faulty product and thereby incompetent;
(b)refused to offer any after sales support to the retailer purchaser of its products and was thereby a disreputable and unreliable manufacturer;
(c)was the object of a valid and subsisting claim for damages or costs initiated by some or all of the defendants, and it was thereby a disreputable trader that could not be relied upon to rectify faults in its products, that is, ‘stand behind’ its products.”
I shall call meanings (a), (b) and (c), “the extended first meaning”, “the extended second meaning” and “the extended third meaning” respectively.
It was not suggested that his Honour’s formulation of the meanings was in error. Indeed, the second and third were the meanings for which the appellant contended on this appeal. They are to be compared with the meanings as found by the learned judge, which were - for reasons which he briefly described, and which I shall leave in the first person - that the appellant
“(i)was the manufacturer of a faulty product. (I do not accept that the imputation alleged in the plaintiff’s pleading, namely ‘and was thereby incompetent’ follows from the statement in question. Many manufacturers of mass produced articles market occasional defective products by accident rather than by incompetence).
(ii)refused to offer any or sufficient after sales support to the retail purchaser of the product. (As only one sale was involved, I do not accept that the further imputation alleged is fairly open, that is, that Autron was thereby a disreputable and unreliable manufacturer).
(iii)was the object of a valid and subsisting claim for damages or costs initiated by some or all of the defendants. (Again I do not accept that the further alleged general imputation arises either from (iii) or (i), (ii) and (iii) combined, that Autron was ‘thereby a disreputable trader that could not be relied upon to rectify faults in its products, that is, ‘stand behind’ its products).”
I shall call those meanings, respectively, the first, second and third meanings “as found”.
His Honour held, not that it now matters having regard to the issues pursued on the appeal, that a defence of justification had been made out in respect of the first meaning as found.
Concerning the second meaning as found, the learned judge held that the defence of justification had been made out.[1] The newsletters had been published long after 23 January 2004. That was the date upon which it had become unreasonable for Autron to continue to deny that the actuator was faulty, and to refuse to act upon the warranty given in respect of the device.
[1]This implied, of course, that he had been satisfied that the newsletters in that meaning were defamatory.
Concerning the third meaning as found, his Honour held that whilst it was untrue that the respondents were proceeding against the appellant when the newsletters were published, what had been said was not defamatory. He said this:
“ … in my view, an allegation that there is an action or proceeding against a corporation through the Office of Fair Trading in New South Wales cannot constitute a defamatory statement. The fact that a corporation is sued or the subject of complaint before any court, tribunal or other body cannot per se amount to a disparagement of the corporation in the requisite sense. Companies are daily defendants in proceedings in all sorts of jurisdictions.”
His Honour further held that, had the appellant established that the statements in any of the meanings as found were defamatory, and not justified –
· The defence of qualified privilege would not have availed the respondents.
· The defence of fair comment had been made out in respect of
“the comment that the defendants were disappointed, to say the least, and would not be using [the appellant’s] products in the future”.
Finally, his Honour rejected the s.52 Trade Practices Act claim on the footing that the appellant had not established the falsity of the representations particularised by Autron in support of that claim.
The grounds of appeal
Against the background thus described, it is now convenient to set out the grounds of appeal, so far as the same were pursued. Thus –
“3.The learned trial Judge erred in holding that the Respondents had proved justification in respect of the second meaning (“the second meaning”) His Honour found the website bore [46(ii)] namely that the Appellant refused to offer any or any sufficient after sales support to the retail purchaser of the product.
4.The finding of the learned trial judge that the respondents had justified the second meaning was against the evidence and the weight of evidence.
5.The learned trial Judge erred in holding that the defence of fair comment was made out in respect of the second meaning (inter alia) having regard to the fact that the website failed to set out the facts on which the alleged comment was based.
6.The learned trial Judge erred in holding that the third meaning that His Honour found the website bore [46(iii)] namely the Appellant was the object of a valid and subsisting claim for damages or costs initiated by some or all of the Defendants could not and did not constitute a defamatory statement.
7.The learned trial judge ought to have held that the website gave rise to the meanings for which the appellant contended, namely –
. . .
(b)that the Appellant refused to offer any after sales support to the retail purchaser of its products and was thereby disreputable and an unreliable manufacturer. [27(b)]
(c) that the Appellant was the object of a valid and subsisting claim for damages or costs initiated by some or all of the defendants, and it was thereby a disreputable trader that could not be relied upon to rectify faults in its products, that is ‘stand behind’ its products.
8.The learned trial Judge ought to have found that the website was misleading and deceptive and that the causes of action pursuant to s.52 of the Trade Practices Act had been made out.
9.The learned trial Judge erred in failing to consider and find in the Appellant’s favour that the third meaning conveyed by the website constituted misleading and deceptive conduct in contravention of s.52 of the Trade Practices Act.”
I have not set out grounds 1, 2, and 7(a). They attacked the judge’s failure to find that the newsletters conveyed the extended first meaning; and his Honour’s conclusion that the respondents had justified the first meaning as found. Those grounds were abandoned shortly before the appeal was heard. The appeal thus proceeded on the footing that the device had indeed been faulty, and had been the cause of the relevant problems with the vehicle.
Grounds 3, 4, 5 and 7(b)
The gist of these grounds is first, that the learned judge should have held that the newsletters conveyed the second extended meaning, and not the second meaning as found; second, that the judge’s finding that the respondents had justified the second meaning as found was in error, against the evidence and the weight of evidence; and third, that the fair comment defence, contrary to his Honour’s finding, had not been made out.
Concerning the first of those matters, it will be recalled, the learned judge found that the meaning conveyed was that the appellant had refused to offer any or sufficient after sales support. He rejected the appellant’s contention that the meaning extended to an imputation that it was thereby a disreputable and unreliable manufacturer.
According to counsel for the appellant, the thrust of the two newsletters was that Autron had supplied a faulty device, had given no after sales support, and was therefore a disreputable and unreliable manufacturer. The judge’s conclusion that the extended second meaning was not fairly open, because the newsletters related to a single faulty item and the appellant’s response to a particular complaint, was unsound.
Counsel for the respondents, to the contrary, submitted that the learned judge had rightly rejected the extended second meaning as being strained, forced and utterly unreasonable. That test, he noted, had recently been restated in Favell v Queensland Newspapers Pty Ltd[2]. He further submitted that, by analogy, the case was one in which the appellant had proffered a meaning akin to that unsuccessfully advanced by the plaintiff in Mirror Newspapers Ltd v Harrison[3]. All that had been said was that a problem had developed, the cause had been found, the respondents were disappointed with the manufacturer’s response, the respondents were taking action, and that they would keep readers informed. Counsel emphasised that this was complaint only about a single item, and about Autron’s response. He pointed out that the second newsletter, referring to replacement of the faulty actuator by a new module – at least implicitly an Autron component – served to emphasise that the complaint had been restricted to a single item and the manufacturer’s response in that connection.
[2](2005) 79 A.L.J.R. 1716 at 1719 [9].
[3](1982) 149 C.L.R. 293, citing particularly the principle enunciated Mason, J. at 301, where his Honour emphasized the relevance of the response of the ordinary reasonable reader in determining what meaning should attach to a publication. The application in a particular setting of what his Honour said was emphasized by the different circumstances and outcomes in Harrison and Favell. See, as to the latter, particularly 1719-1721 [10]-[12], [14]-[15], [17].
Pertinent general principles, of which I have made a little mention, are not in doubt and need not be elaborated upon. In my opinion the learned judge was correct to conclude that the second extended meaning was not conveyed by the publications. The newsletters relevantly conveyed assertions of fact, both explicit and implicit – that the appellant had maintained the position that a particular device which it had manufactured was not faulty, that it would not recompense the respondents their costs associated with discovery of the fault and replacement of the faulty component, and that the respondents had a sense of grievance that the manufacturer had acted in such a way. Those assertions of fact,[4] specifically directed to the failure to provide after sales support, did not impute that Autron was “thereby disreputable and an unreliable supplier”. The ordinary reasonable reader[5] would think, to the contrary, that according to the respondents the appellant had not acted as it should have done when, as the respondents alleged, a single item had been shown to be faulty. He or she would conclude that the respondents’ complaint really was restricted to that one item and the appellant’s response in relation thereto. He or she would know that, in the everyday world, genuine disputes arise between manufacturers and consumers in respect of particular items supplied; and would not think that (a report of) one such dispute implied that the manufacturer was disreputable and an unreliable supplier. That reader would also think that the restricted nature of the complaint was emphasised by the respondents’ report, in the second newsletter, that a new module had been fitted and was operating “as expected” – which could only mean, in context, satisfactorily. Counsel for the appellant submitted that the reader would not take “the new module” to have been a component of the Autron device. Read in context, I do not agree.
[4]The sense of grievance may be so described, as well as the other matters.
[5]He or she remains relevant, notwithstanding the observations made by Kirby, J. in Favell under the heading “The fiction of the ‘ordinary reasonable reader’”, at 1722-1723 [23]-[26].
I turn to the issue of justification concerning the second meaning as found.
It is not in question that Autron in fact refused to offer after sale support to the respondents in respect of the faulty device. Literally, it might be said, the evidence unequivocally made good the second meaning as found. But the gist of that meaning was that Autron did not provide support when it should have done so. In that connection his Honour held that it was “unreasonable” for Autron to continue to deny liability, after Devaney had conducted and reported the field tests, in reliance on the factory testing; and that the respondents had “just cause to be disappointed or annoyed with Autron’s response”.
According to the appellant’s argument, the judge had rightly recognised that the appellant had not failed to offer appropriate support at a time when it had “no way of telling whether the fault was in the actuator or the installation”. Next, it was submitted that, the judge having accepted that the appellant had the right to conduct its own factory testing, and having accepted that the results of such testing were negative “it could not be said that the second imputation was justified”. Then it was submitted that the finding that the appellant’s conduct in continuing to deny liability was “unreasonable” was the language of fair comment, not of justification. Finally it was submitted that, in any event, the respondents had never submitted an actual money claim for consideration by the appellant. There was, counsel contended, no evidence that any towing cost had been incurred.
For the respondents, it was submitted that the learned judge had made a finding of fact which had involved his consideration of competing evidence. His finding of “unreasonableness” meant no more than that, on a resolution of the competing evidence, he had been satisfied that after 23 January 2004 Autron had not provided after sales service when it should have done so. There was no doubt, counsel submitted, that the judge had found the second imputation as found was justified.
In my opinion the respondents’ argument should be accepted. There was a question to be determined upon the evidence: had the respondents shown that the appellant had not supplied after sales service when it should have done? In answering that question in the respondents’ favour the judge had to decide not only that the device was faulty, but that the appellant had, in effect, refused to face up to the fact. That led his Honour to consider the circumstances of the testing in the field, and the testing in the factory. Testing of the two kinds did not take place in a vacuum. It is to be remembered that, sight unseen, the appellant had consistently rejected the idea that its device could be at fault. His Honour was entitled to conclude that factory testing did not replicate testing in the field, nor deny the results of the latter; and that Autron had used the factory test results to maintain a “head in the sand” attitude, the first signs of which had been present within a day or two of 22 November 2003.
Further, contrary to the appellant’s submissions, it did not follow, because there was conflict in the evidence, that the respondents could not establish that the appellant had failed to offer after sales support as it should have done. Nor did his Honour‘s use of the word “unreasonable” mean that he applied some test of justification which was inapposite. Seizing upon the word was to remove it from its context; and to ignore the judge’s positive conclusion that the respondents’ “complaints” – in particular the complaint conveying the second meaning as found – were justified. Nor again was any point of substance available that the respondents had not made a money claim on the appellant; or that at time of trial the respondents had not been rendered a bill for the towing. The respondents had certainly incurred some cost. There had been no point in submitting any bill(s) to the appellant for reimbursement when the latter had unequivocally stated its position.
The third aspect raised by the appeal in respect of the second meaning as found – that is, that the defence of fair comment had been made out – need not be addressed. Rightly, it was not suggested that, if the justification defence was upheld, the fair comment defence required consideration.
Grounds 6 and 7(c)
The thrust of ground 7(c) is that the learned judge should have held that the newsletters conveyed the third imputation in its extended meaning and not in the meaning as found. The gist of ground 6 is that the judge erred in concluding that the third meaning as found was not defamatory. The third meaning as found, it will be recalled, was that the appellant was the object of a valid and subsisting claim for damages or costs initiated by some or all of the respondents; whilst the extended third meaning, for which the appellant had contended, proposed a further imputation – in short, that the appellant was thereby a disreputable trader that could not be relied upon to stand behind its products.
Counsel for the appellant submitted, concerning ground 7(c), that the learned judge did not give particular reasons for rejecting the extended third meaning; but that probably it was because there had been but one transaction the subject of complaint. The statements in respect of the third meaning needed to be considered in context. Reference to the fair trading regime conjured up the idea of a wronged little man taking on a recalcitrant large manufacturer.
Counsel for the respondents, in respect of the issue now under consideration, submitted that the extended third meaning was rightly rejected, as being, in the case of the extended second meaning, strained, forced and utterly unreasonable. It was not a meaning which the ordinary reasonable reader would draw from the various statements made in the newsletters. The judge had settled upon the third meaning as found by considering the pertinent imputation in context; for in rejecting the extended third meaning he had specifically referred to that meaning considered both independently of and also in conjunction with the first and second meanings. Again, on the footing that the judge did consider it pertinent that the newsletters had addressed but one alleged instance of a defective product having been provided, and of the manufacturer not standing behind the product such that the consumer had sought redress in the fair trading jurisdiction, that circumstance told in favour of his Honour’s finding as to the third meaning. Further again, his Honour’s conclusion that the third meaning was that the appellant was the object of a “valid” claim for damages or costs did not tell in favour of the extended third meaning. Each of the parties in their pleading had used the phrase “valid and subsisting”. His Honour had simply adopted the phrase. The adjective “valid” meant no more than “properly instituted”. The judge’s reasons upon the question whether the newsletters in the third meaning as found were defamatory showed that this was the case.
In my opinion, the arguments advanced for the respondents were convincing. Simply to state them makes the point. I consider that the third meaning as found was not only open, it was compelled by application of traditional methodology.
That takes me to his Honour’s finding that, whilst pertinently untrue, the newsletters in the third meaning as found were not defamatory of the appellant. The respondents sought to contend on this appeal that the newsletters in that meaning were in fact true. Were that so, then a finding that the newsletters in that meaning were defamatory of the appellant would not be decisive. I consider, however, that the issue can be resolved on the basis that his Honour dealt with it. I have already set out the text of the pertinent conclusion at [18]
Counsel for the appellant submitted that the newsletters in their third meaning as found had the tendency to damage it in the way of its business. Viewed in context, the sting of the meaning was that it conveyed a message: “Avoid trading with this company because we have a justified claim for damages and costs which we are bringing against it in the New South Wales Department of Fair Trading. The claim has a good foundation, and is brought in the fair trading jurisdiction.” The last-mentioned circumstance, counsel submitted, gave colour to how wrongly, as the respondents said, the appellant had treated them, and what steps they had to take to right the wrong.
Counsel initially submitted that every publication which reported that a consumer had instituted a fair trading claim against a manufacturer, standing alone, would be defamatory of the manufacturer. Later he submitted that this would not be so. It would all depend upon the context.
Counsel for the respondents submitted that each of the judge’s reasoning and conclusion, accepting for purposes of argument the finding of falsity which was made, were correct. The appellant’s case turned upon a construction of the adjective “valid” which was not his Honour’s meaning. The words “and subsisting” carried the matter no further. All that the respondents had said was that they had properly initiated, and were pursuing, a complaint arising out of the transaction in the New South Wales fair trading “department.”
I agree with the submissions made for the respondents. First, his Honour’s reasons do show that he used “valid” in the sense of “properly instituted”. Otherwise he would not have said that “(t)he fact that a person is sued or the subject of complaint before any … tribunal … cannot per se amount to a disparagement … “.
That conclusion is not subverted by his Honour’s observation, when considering other conduct of the respondents, that they – or at least Lewis – had “a strong feeling of antagonism towards” the appellant, “feelings which … were clearly honestly held, even if unreasonable in all the circumstances.”
Second, I agree with the submission for the respondents that the words “and subsisting” added nothing.
Third, I consider that the simple intimation that the respondents were seeking redress from the appellant in connection with a dispute which had arisen between them concerning a single faulty component was not relevantly disparaging. The complaint, as with any complaint, might or might not have proven to be well-founded – assuming that it was persisted in. Who could say until the complaint had been investigated? That is how publication of a complaint of the kind here under consideration would be understood. It may be added that the only witnesses called for the appellant upon the question of damage did not assist the appellant in the present connection. That is, they said nothing about the impact of it being reported that a claim was on foot.
Grounds 8 and 9
These grounds, the text of which I have earlier set out, concern the appellant’s claim under s.52 Trade Practices Act. This is what the learned judge said about that claim, so far as it is presently relevant:
“The contents of paragraph (a) of the particulars in paragraph 14 of the Statement of Claim, alleging a false representation that the actuator was defective, have not been made out upon my findings. Likewise, the allegations in paragraph (b) of the particulars alleging false representations as to the inadequacy of the plaintiff’s after sales service pursuant to its warranty, are not established certainly insofar as they assert that the problem in the Land Rover was not caused by a defective actuator and that by implication the plaintiff’s obligations under the warranty were honoured. My findings of fact in respect of these aspects are to the contrary.”
His Honour did not address, in that passage in his reasons, a representation to the effect of the extended third meaning; or to the effect of the third meaning as found. But the appellant did not complain to this Court, under cover of ground 9, that the judge had so failed to give reasons as should vitiate the outcome of the trial. The complaint was rather that in fact the appellant had a good claim under s.52 in reliance upon a representation bearing the extended third meaning; and that his Court should not so conclude.
There are three obvious reasons by the learned judge did not address, in the context of the s.52 claim, a representation in the terms of the extended third meaning, or in the terms of the third meaning as found. First, paragraph 14 of the statement of claim particularised the representations upon which the appellant relied in support of that claim. The particulars did not refer to the third meaning - extended or otherwise. Second, there was some debate in counsel’s final addresses whether the appellant in fact relied upon such a representation. Passages from the transcript were read to the judge. In my view they left the situation uncertain. Third, any uncertainty could have been cured by an application to amend at trial. There was no such application.
Before this Court, counsel for the respondents did not submit that the appellant was proscribed, in the circumstances described, from seeking to rely upon a representation in the terms of the third meaning as found in support of the s.52 claim; or, if the Court should conclude that the extended third meaning had been made out, from seeking to rely upon that meaning in the s.52 context. I will approach the matter on that footing, but it is not without its difficulties.
In pursuing the defamation claim founded on either version of the third meaning, it was not necessary that the appellant demonstrate the falsity of the statement that, at the time of publication of the newsletters, it was the object of a valid and subsisting claim initiated against it by some or all of the respondents. It was only necessary that what had been said was defamatory. In the s. 52 claim, however, I should have thought that it was necessary for the appellant to prove the falsity of some representation made; and then that damage had been caused by such representation, necessarily applying the language of causation found in s. 82, Trade Practices Act. Counsel for the appellant may have submitted, however, that proof that the statement in either of its third meanings had been defamatory was enough to make out the s. 52 claim. Certainly he submitted that what would be sufficient to prove the appellant’s entitlement to damages in its defamation claim would establish an entitlement to damages arising out of its s. 52 claim.
If, upon the issue of breach, counsel did advance the appellant’s claim, founded on the third meaning, in the way that I have mentioned – which was not the way in which the claim was particularised in respect of either the first or second meaning – it tended to make the falsity of either version of the third meaning (if falsity there was, for the respondents filed a Notice of Contention challenging certain findings made by the learned trial judge) an irrelevance. But whether or not the issue of breach was so approached, certainly counsel approached the matter on the footing that the first step in proof of damage was proof of the defamatory character of (either version of) the third meaning.
For myself, I doubt the validity of the first limb of counsel’s argument, if I have understood it correctly. But that does not mean that the tasks which the appellant set itself, of proving that the third meaning was defamatory, and was causative of loss and damage, are not in point.
In my opinion grounds 8, and 9, the latter of which really falls to be considered as a particular of ground 8, should be rejected for a number of reasons. Some of them are independent, some have significance when considered conjointly with others.
First, it is now conceded that the statements, as to the first meaning upon which the appellant relied, were justified.
Second, for reasons previously described, I consider that –
· The impugned statements conveyed the second meaning as found, and not the extended second meaning.
· The judge was correct in concluding that the respondents had made out a justification defence in respect of that meaning.
Third, for reasons previously described, I consider that –
· The impugned statements conveyed the third meaning as found, and not the extended third meaning.
· The third meaning as found, set in context, was not defamatory of the appellant.
The consequence of the second of the matters last mentioned is that the statement imputing the third meaning should be considered harmless; that being fatal, as appellant’s counsel specifically conceded, not only to the appellant’s defamation claim, but to its s.52 claim also.
Fourth, if it was necessary for s.52 purposes that the statement in its third meaning be not simply defamatory of the appellant, but also false, then it was not in doubt that the appellant must have proved that the false statement had been damaging to it. Under s.82 of the Trade Practices Act, recovery of “the amount of loss or damage” is in respect of loss or damage “by conduct of” another person in breach, relevantly, of s.52. There could be no entitlement to damages unless some conduct engaged in by the respondents had been a cause of loss or damage to the appellant. A false but non-harmful representation could not yield such damage. If it is assumed, as his Honour found, that the statements in their third meaning were false, it would lead nowhere. From the appellant’s standpoint, the problem would remain that his Honour made a finding, which I endorse, that the statements were not defamatory of – translatable, in the present context, as harmful to – the appellant.
Fifth, and I now go particularly to the issue of loss and damage, counsel for the appellant submitted that his client had suffered damage to its reputation or goodwill. It was not necessary to prove quantifiable damage. That was the basis upon which a company may recover damages for being defamed. Damages under s.82 Trade Practices Act may be awarded in like circumstances. Counsel referred to Nixon v. Slater & Gordon[6] in support of the last three aspects of that submission.
[6](2000) 175 A.L.R. 15 at 33, [81] – [84].
There is no doubt that Merkel, J. held in Nixon that injury to reputation is a form of loss and damage recoverable under s.82 Trade Practices Act for a contravention of s.52; and that he treated such injury to reputation as being equivalent to the injury to reputation for which a person who is defamed is to be compensated. In the case of a natural person, of course, proof of actual loss or damage is unnecessary in order that damages be recoverable for a libel. There is, perhaps, a question whether, regardless what is necessary to found a company’s entitlement to damages if it is defamed,[7] a company as distinct from a natural person may recover damages under s.82 absent a conclusion that the company has probably suffered some financial damage by conduct in breach of s.52. But that question, and the larger question which perhaps could arise – that is, whether Nixon otherwise should be taken to accurately state the law[8] - need not be considered. This matter can be resolved, I consider, on an assumption that the appellant could succeed in its s.52 claim if it was able to establish that it had suffered loss and damage of any kind that would support an award of damages to a company for a defamation.
[7]For defamation, a company may recover damages for injury to its trading reputation or goodwill, and for established monetary loss. It will often be readily concluded that a defamation is likely to bring about some, though unquantifiable, damage. The circumstances of the particular defamation, however, must be considered in every case in determining whether any and what entitlement to damages had been established. See, generally South Hetton Coal Co. Ltd. v. North-Eastern News Association Ltd. [1894] 1 Q.B. 133, Barnes & Co. Ltd. v. Sharpe (1910) 11 C.L.R. 462 at 473 – 4 per Griffith, C.J., per Higgins, J. at 485, Lewis v. Daily Telegraph [1964] A.C. 234 at 262 per Lord Reid, Australian Broadcasting Commission v. Comalco Ltd. (1986) 12 F.C.R. 510 particularly at 604 per Pincus, J.
[8]The cases cited by Merkel, J. in Nixon – Prichard v Racecage Pty Ltd (1997) 72 F.C.R. 203 at 217, and Brabazon v Western Mail Ltd [1985] 59 A.L.R. 712 at 719 – 720 - were not squarely in point.
Plainly, the evidence adduced for the appellant did not prove actual financial loss. It did not even attempt to prove the same. That apart, the appellant’s manager, Fogl, gave evidence as to the extent to which sales of the device contributed to Autron’s annual income; and the appellant called to witnesses to speak about the impact upon them of reading one or both of the newsletters. There was also some evidence, given by Lewis in cross-examination, that the total number of “hits” on the newsletter index page of Boiling Billy’s website over a period of several years had been 1550; although this, it seems, was likely to have understated the actual number of “hits” – because not all readers would have entered via the index page.
The first of the two witnesses to whom I referred a moment ago was Warwick Grimwade, manager of a business in Mt Isa which sold parts and accessories for 4 wheel drive vehicles. The business, said Mr Grimwade, stocked and sold Autron cruise control devices. It had been doing so for 18-24 months. He had found the device to be “very good.” It had “given [his business] very few problems whatsoever”. He had always found “their service good to very good”.
In March 2004, the first Boiling Billy newsletter had been mailed to his business; and, he thought or presumed, to “most of the [TJM] Megastores”. He had read the newsletter. It was “pretty sketchy now in [his] memory”. His reaction was “ a bit of disbelief that the Autron was giving that much problems”. He had spoken to someone at Autron about the newsletter. He had promoted the Autron product with the managers of the other stores in the group. That was because of his favourable experience with it.
The second witness was Karl Harbek. As it turned out, he was the next door neighbour of Keith Anderson, a director of the appellant and a witness called by the appellant.
The witness gave evidence of having had an Autron device fitted to his vehicle. He had installed it himself. Initially there had been some difficulties with installation. Mr Anderson had resolved the difficulties straight away.
In March 2004 the witness had seen an adverse reference to Autron in an article. In the course of an internet search, he had ended up on the Boiling Billy website. That is where he had seen the reference. He said –
“It certainly didn’t reflect the experience that I’d had with Autron or their cruise control.”
and
“I thought it was fairly stern, fairly harsh, really to the point, saying don’t use the product at all”.
He had printed out copies of the newsletter or newsletters and given the same to Mr Anderson.
To my mind, the viva voce evidence which was adduced positively contra-indicated any suggestion that any part of the newsletters pertaining to Autron had impacted adversely upon the readers. The evidence was not even neutral upon the question. Further than that, there was no attempt to relate any reaction to any particular part of what had been written. Certainly neither version of the third meaning was referred to in the evidence.
Having regard not only to the fact that the appellant did not prove (or even attempt to prove) actual financial loss, but also to such viva voce evidence as was called, and to the likely limited readership of the newsletters, I consider that the appellant failed to establish that it suffered any reputational harm sounding in damages in consequences of publication of the newsletter; a fortiori any entitlement to damages arising out of the third meaning as found, even accepting that the meaning conveyed a falsity.
The conclusion which I have just expressed accords, I think, with commonsense. Despite the underlying facts being vigorously contested, despite the length of the trial, it should not be forgotten that all that the respondents were saying was that the appellant, as they perceived it, had responded in poor fashion to their quite specific, and limited, complaint. It accords with commonsense that publication of such a complaint would not impact upon the trading reputation of a company which had conducted its business for years without, so far as the evidence revealed the situation, other instances of complaint about equipment malfunction.
Orders
In my opinion the appeal should be dismissed.
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