Brennan v Rijicach Pty Ltd & Hickey - [2014] SADC 153

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
BRENNAN v RIJICACH PTY LTD & HICKEY
[2014] SADC 153
Judgment of Her Honour Judge McIntyre
5 September 2014
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES
DEFAMATION - DAMAGES - GENERAL DAMAGES - ASSESSMENT - IN GENERAL
INTELLECTUAL PROPERTY - CONFIDENTIAL INFORMATION - GENERALLY
The plaintiff operated mobile catering vans servicing business premises in and around the northern suburbs of Adelaide between 2001 and June 2008 under the name Cruizen Café. The second defendant is a director and shareholder of the first defendant which was incorporated on 23rd May 2006 for the purpose of conducting a mobile catering business. In or about June 2006 the plaintiff and the second defendant agreed that the defendants could use the plaintiff’s warehouse at Wingfield for storage of stock and a lunch van, the name Cruizen Café and the plaintiff’s account to purchase soft drinks from Coca-Cola. In late December 2007 the defendants vacated the Wingfield warehouse and ceased using the name Cruizen Café. From January 2008 the defendants began trading as Lunch Line. The plaintiff says that the defendants owe her money under the terms of their agreement or agreements. She further says that Cruizen Café experienced financial difficulties as a result of certain conduct of the defendants and in consequence ceased trading in mid-2008. The Cruizen Café business was sold in or about July 2008.
The main issues to be determined are:
•What, if anything, is owed by the defendants to the plaintiff as a result of any agreement?
•Whether the defendants unlawfully obtained and used confidential information belonging to the plaintiff consisting of “run sheets” bearing the names of the plaintiff’s customers?
•Whether the defendants defamed the plaintiff and/or engaged in misleading and deceptive conduct in order to induce customers of the plaintiff to discontinue purchasing food from the plaintiff and to instead purchase food from the defendants?
•If the plaintiff has established either the misuse of confidential information or the defamation/misleading and deceptive conduct then the issue is one of causation namely whether the conduct has resulted in any loss to the plaintiff.
Held:
1.No amount is owed by the defendants to the plaintiff under the terms of any agreement.
2.The plaintiff has not established that the defendants unlawfully obtained and used any confidential information belonging to the plaintiff.
3.The second defendant did make certain misrepresentations and defamatory statements concerning the plaintiff as alleged but the plaintiff has failed to establish any economic loss flowing from those statements. Plaintiff awarded damages of $4000 inclusive of interest for non-economic loss in respect of defamation as against the second defendant.
Defamation Act (2005) s33(1), s33(2), referred to.
Sullivan v Sclanders (2000) 77 SASR 419 at 51, 54; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37; Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317; Lansing Linde Ltd v Kerr [1991] 1 All ER 418; Del Casale v Artedomus (Aust) P/L (2007) 73 IPR 326; Morgan v Odhams Press Ltd [1971] 1 WLR 1239; Cornes v 10 Group Pty Ltd & Ors (2011) 114 SASR 1; John Fairfax Publications Pty Ltd v Gagic (2007) 230 CLR 291; Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44; Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327; C v L & Others [2005] SASC 315; Coyne v Citizen Finane Ltd (1991) 172 CLR 211 at 216; John Fairfax Publications Pty Ltd v O'Shane (No 2) (2005) NSWCA 291; SA Government Gazette 15 June 2012; Morgan v Odhams Press Ltd. [1971] 1WLR 1239, considered.

BRENNAN v RIJICACH PTY LTD & HICKEY
[2014] SADC 153
Introduction

The plaintiff operated mobile catering vans servicing business premises in and around the northern suburbs of Adelaide between 2001 and June 2008 under the name Cruizen Café. The second defendant is a director and shareholder of the first defendant which was incorporated on 23^rd May 2006 for the purpose of conducting a mobile catering business.
In or about June 2006 the plaintiff and the second defendant agreed that the defendants could use the plaintiff’s warehouse at Wingfield for storage of stock and a lunch van, the name Cruizen Café and the plaintiff’s account to purchase soft drinks from Coca-Cola. The precise terms of the agreement or agreements are contentious.
In late December 2007 the defendants vacated the Wingfield warehouse and ceased using the name Cruizen Café. From January 2008 the defendants began trading as Lunch Line.
The plaintiff says that the defendants owe her money under the terms of their agreement or agreements. She further says that Cruizen Café experienced financial difficulties as a result of certain conduct of the defendants and in consequence ceased trading in mid-2008. The Cruizen Café business was sold in or about July 2008.
The plaintiff’s claim is denied in its entirety by the defendants.
Issues
The parties have agreed that the main issues to be determined are:
·What, if anything, is owed by the defendants to the plaintiff as a result of any agreement?
·Whether the defendants unlawfully obtained and used confidential information belonging to the plaintiff consisting of “run sheets” bearing the names of the plaintiff’s customers?
·Whether the defendants defamed the plaintiff and/or engaged in misleading and deceptive conduct in order to induce customers of the plaintiff to discontinue purchasing food from the plaintiff and to instead purchase food from the defendants?
·If the plaintiff has established either the misuse of confidential information or the defamation/misleading and deceptive conduct then the issue is one of causation namely whether the conduct has resulted in any loss to the plaintiff.
Background
The plaintiff canvassed various commercial and industrial premises in order to secure their agreement that Cruizen Café lunch vans could go onto their premises in order to sell a variety of items including sandwiches, hot food, pies, pasties, cakes, confectionary, soft drinks and cigarettes to the staff of those businesses. The visits were timed to coincide with staff breaks. The plaintiff would set up what were described as “runs” to enable a van to visit a number of businesses in succession. The plaintiff operated Cruizen Café from around 2001 until June 2008.
In about January 2006 a competitor company called Golden Chef went into liquidation. Golden Chef was a very large lunch van operation. The departure of Golden Chef from the market place had two consequences. First there was a large market of businesses now available to other lunch van operators and second the plant and equipment of Golden Chef was to be sold.
An auction of Golden Chef lunch vans and equipment took place in March or April 2006. It is uncontroversial that both the plaintiff and the second defendant attended the auction. Both the plaintiff and the second defendant had worked for Golden Chef in the past. The plaintiff purchased four vans for her business. This took her total number of vans to seven. The second defendant purchased a van to be used in a business she proposed to set up. The precise circumstances of that purchase are somewhat controversial but that is not a controversy I need to resolve. It is not however in dispute that subsequent to the auction the plaintiff and the second defendant discussed the possibility of the second defendant garaging her new vehicle at the plaintiff’s warehouse.
The plaintiff had operated out of a number of premises over the years. She originally started in Salisbury. Prior to this action she was based at Wingfield. Following the purchase of the additional vans at the Golden Chef auction, the plaintiff moved to larger premises in Wingfield. The defendants joined the plaintiff in those larger premises in about May 2006.
It is not in dispute that it was agreed that the defendants would pay rent in the sum of $100 per week to cover outgoings such as electricity. It is further agreed that the defendants would purchase items such as sandwiches, rolls and hot food from the plaintiff’s kitchen operation. The plaintiff agrees that the defendants were up to date with payments for rent and food at the time the defendants vacated the warehouse. What is in dispute is whether there was a further agreement that the defendants pay an amount of $1,000 per month in respect of advice and assistance from the plaintiff and the use of the plaintiff’s Cruizen Café branding. I will refer to this as the “service fee”. The defendants deny that there was such an agreement.
Shortly after the defendants started operating out of the plaintiff’s warehouse in Wingfield an additional agreement was reached whereby the defendants could purchase Coca-Cola products through the plaintiff’s account with Coca-Cola. I will refer to this as the “soft drink agreement”. The precise terms of that agreement are controversial. The defendants say that there was a reciprocal arrangement in respect of the plaintiff purchasing Schweppes products by way of the defendant’s Schweppes account. The plaintiff denies this.
The defendant vacated the plaintiff’s warehouse on 21 December 2007; the last trading day before Christmas 2007. The defendants say that the second defendant handed the plaintiff an envelope on that day and that this contained an amount of cash sufficient to discharge the full amount owing by the defendants to the plaintiff for rent, food and soft drink. The plaintiff agrees that an amount of money was handed over but says that this did not cover either the soft-drink or the service fee debt.
The defendants immediately removed the Cruizen Café signage from their van and the defendants’ business was rebranded as Lunch Line. Lunch Line commenced operation in January 2008 after the Christmas break.
There was considerable acrimony surrounding the departure of the defendants from the plaintiff’s warehouse. The plaintiff asserts that the defendants took confidential information in the form of the plaintiff’s run sheets and commenced servicing many of the plaintiff’s clients. The plaintiff further asserts that the second defendant on at least four occasions made defamatory or misleading comments about the quality of the food supplied by the plaintiff. The plaintiff says that as a consequence of the misuse of confidential information and the defamatory or misleading comments Cruizen Café lost customers, became less profitable and that ultimately she was forced to sell the business for less than its true value.
The proceedings
The plaintiff commenced proceedings in the Magistrates Court on 30 April 2009. The claim was then much less than now asserted. The defendants obtained a default judgment against the plaintiff which was ultimately set aside on appeal to a single Judge of the Supreme Court. As a condition of the default judgment being set aside the plaintiff was ordered to pay an amount of security for costs. Following payment, the plaintiff obtained a forensic accounting report valuing the Cruizen Café business. On the basis of this report the quantum of the plaintiff’s claim increased, the statement of claim was amended and the matter transferred to the District Court.
The matter proceeded for hearing over 5 days. The plaintiff Tarnya Brennan, her mother Melva Crook and her husband Geoffrey Brennan gave evidence about the Cruizen Café business and interactions between the plaintiff and the second defendant. Four witnesses gave evidence about statements alleged to have been made by the second defendant concerning the quality of the plaintiff’s food; specifically Ian Sutton, Lisa Lister, Steven Davis, John Barnes. Harold Buck gave evidence about his observations of the plaintiff and her business, and Mark Jefferson a forensic accountant gave evidence concerning his valuation of the Cruizen Café business. The plaintiff tendered a number of financial documents, affidavits and other material in support of her case.
The defendant called the second defendant Jillian Hickey to give evidence together with a number of former employees of the plaintiff Krystle Peel, Caralyn Williamson and Melissa Davey about various matters to do with the running of the plaintiff’s business. Two former suppliers of the plaintiff’s business Michael Lound and Barry Meyers gave evidence about the plaintiff’s tardy payment of invoices. Finally the defendant called a forensic accountant Paul Jorgenson to give evidence as to his valuation of the plaintiff’s business. The defendant also filed a number of exhibits including affidavits of witnesses who were not required for cross-examination, specifically Kelly Nelson and Peter Perrotta.
Assessment of witnesses
The key witnesses were the plaintiff and the second defendant. I will comment on their evidence in context shortly. In general terms however I was not impressed by the plaintiff’s evidence. Much of it was very vague, particularly when it came to financial and business matters. She contradicted herself and the pleadings filed on her behalf in relation to a number of important matters.
When pressed on matters that she found difficult to explain the plaintiff made serious allegations of misconduct including criminal misconduct against a number of people including Cruizen Café employees and the second defendant. These were entirely unsubstantiated. For example, the plaintiff when asked about the lack of profit in her business prior to any asserted misconduct by the defendants alleged that certain employees, “Krystle” and “Tasma”[1], stole stock from Cruizen Café. Later in her evidence she added “Melissa” to the list.[2] Tasma did not give evidence but both Melissa and Krystle did. Melissa (Davey) gave evidence for the defendants. She denied the plaintiff’s allegations when they were put to her in the course of her examination in chief. She was not asked about them in cross-examination. Krystle Peel denied stealing stock or cash from the plaintiff. It was put to her in cross-examination that she and Tasma made a call to the plaintiff in early 2008 in which they admitted stealing from her. Ms Peel denied that any such call took place. Another former employee of the plaintiff, Caralyn Williamson gave evidence and she said that she had never observed any of these people stealing from the plaintiff.
[1] [T] pp105-6
[2] [T] p114
By way of further example, the plaintiff made derogatory comments about Ms Williamson and said that she would leave inappropriate notes suggesting that she had a romantic interest in the plaintiff. She further suggested that Ms Williamson was prepared to give evidence for the defendants because she was to be paid for that evidence. Ms Williamson denied leaving notes expressing affection for the plaintiff and in particular denied any romantic interest in the plaintiff. Her demeanour when that assertion was put to her was most compelling. The assertion that she was paid for her evidence was not put to Ms Williamson in cross examination.
I reject the plaintiff’s allegations in relation to each of the named employees as entirely unsubstantiated. These matters caused me to scrutinise the plaintiff’s evidence with great care. In general terms I did not find the plaintiff to be either reliable or credible.
The second defendant impressed me as a business-like woman with a good grasp of the lunch van industry. Her evidence was in general cogent and compelling. She appeared to have an excellent recall of events and indeed in some instances, was able to provide more detail about the plaintiff’s business than the plaintiff herself; for example as to the number of employees and vans operated by the plaintiff at particular times. Whilst it was plain to me that she harbours a degree of animosity towards the plaintiff she was considerably more temperate in her expression of it than the plaintiff. I do not however accept her evidence that she did not make certain representations complained of by the plaintiff and because of this I have carefully scrutinised her evidence on other contentious topics.
What, if anything, is owed by the defendants to the plaintiff?
The first agreement
The plaintiff said that some two weeks after the Golden Chef auction the second defendant turned up on the doorstep of her warehouse sobbing and saying that she was not allowed to operate her lunch van from home. The second defendant asked whether there was a spot for her at the plaintiff’s warehouse. The plaintiff said there was; she had a lot of parking room in her new warehouse. The plaintiff was then asked if there was some arrangement for the defendants to pay for that. She said that there was and was asked:[3]
[3] [T] p16, line 24 – p18, line 12
QCan you describe what that arrangement was?
AMs Hickey was to pay a little bit for power and a little bit for renting the warehouse and I supplied shelving where she could put all her drinks and chips. I could draw you a picture, if you like, of the layout of the warehouse, if you like and where she was parked but she was at the far end and she had her own little section and it was really good. She also – my kitchen staff was to supply her hot food and hot packs and sandwiches and double-cut rolls and all the home made good stuff, you could say and yeah, that worked really well and Ms Hickey never ever forfeited on a payment. The payments were fantastic and they were on time and they were up-to-date when she left.
QWas there an agreement that the defendant would pay for the services that you provided to her. Was there an agreement that the defendant would pay for your assistance.
ASorry, what do you mean by ‘assistance’?
QWell, for allowing her to use your warehouse.
AYes, she paid rent and she paid for electricity and she paid for the food that my kitchen staff made.
QIn addition to that sort of assistance, did you provide further assistance to the defendant for the operation of her business.
ADid I what.
QCan you describe that.
AWhen she first came to me, she was in – like I said, she was in quite a state and she wanted me to help her with reps and help her with ordering her food and I don’t know – I really liked Ms Hickey. I got along very well with her and I thought she was great and this is where my downhill began and I helped her organising reps. I gave her names and numbers and I called reps for her and organised and showed her how to do ordering because she had never run a business before and I had been running a business for 14 years and I helped her. I helped her with so much. Then she asked me, because I was buying such big quantities of Coke, I got Coke at a very good price and she said to me could she please go in with my order. Like if I order Coke for her and then she takes it out of my order. I hope I’ve made sense with that. So basically I was buying her Coke like for all the vans and then she would pay me for the Coke because it was such a great price. I did that for her. I did that for her. I also – the hours I spent helping her. It was just surreal. I spent hours and hours and hours helping her and I think that’s what makes this hurt so much because yeah, what I did and I also helped her – this will come out a bit later on – but when she first came to me, she was going to the suburb of Beverley and she was there for quite a few months and she came to me one day and she was just hysterical and she was crying and I felt for her. I felt sorry for her because I’m too pathetically soft and she said ‘I’m going bankrupt. This is not working’, and she was just hysterical and she was shaking and I said to her ‘I’ve got so many calls I’m getting from around the Wingfield area. I’ve got so many people calling me, that I can’t service and I will help you get some calls in Wingfield’. I tell you what, in my life it’s the biggest mistake I’ve ever made. It was like asking the devil to enter your camp. I invited her into Wingfield and it’s the biggest mistake I could have ever made and I got her a lot of calls in Wingfield. So I did so much for her.

The plaintiff’s evidence about the manner in which the rent, payment towards overheads and for food was worked out was somewhat confusing. She appeared to suggest that there was a fixed price agreed for rent and overheads and that food was purchased at cost price. It was not clear from her evidence how these amounts were arrived at. She was not able to describe her pricing policy in any clear way either in relation to charging the defendants or generally. She did not produce any documents in respect of these payments.
The second defendant said that after she purchased her van at the Golden Chef auction she had it serviced and renovated. She said that within a couple of weeks of the auction she spoke to the plaintiff about the possibility of setting up her new business in the plaintiff’s warehouse following up on a discussion that they had had at the auction. The plaintiff was at that time in a small place on Fifth Street in Wingfield which could only fit three vans. The plaintiff had purchased four new vans in the Golden Chef auction and had accordingly arranged to rent a much larger warehouse on South Terrace in Wingfield. The second defendant said that the plaintiff took her to see the new warehouse.
The second defendant said that she moved into the plaintiff’s warehouse in mid-May 2006. She denied that the plaintiff gave her any assistance to set up her run or to make links with various suppliers. She says that she did this herself. She had prior experience working at Golden Chef and had a number of contacts in the industry. She further denied that she had ever been concerned about going bankrupt as asserted by the plaintiff. Her husband was earning good money and was well able to support her as she was building up her business. She started in the Beverley area because that was where she had last worked when she was at Golden Chef and she had some contacts there. There was however a lot of competition in that area and it was some distance from the plaintiff’s warehouse at Wingfield. Whilst she managed to get her sales to about $3,500 per week quite quickly, she was aware from her previous experience that she could earn more money in the same time frame if she could cover more businesses in a smaller distance. She then met a former client who invited her to take her lunch van to his new premises in Wingfield. She saw an opportunity and so did some canvassing to build a new run in the Wingfield area. She moved her run to the Wingfield area in September 2006.
The second defendant gave evidence about her arrangement with the plaintiff as follows:[4]
QAnd what arrangement did you come to with the plaintiff about you occupying that warehouse.
AWhen we spoke about that she said that the rent was about $520 a week. There was going to be seven vans in there. So I divided it up by seven, so I think it was 70-odd dollars so I rounded it up to – said 100 and we agreed that it would cover electricity and everything as well
QWas there anything else that you agreed to about how you would operate in her warehouse.
AYes, with the food. To start with we came up with a figure of $400 each. Each van would get 15 sandwiches, it was either 12 or 15 rolls as well and working on just a couple of dockets, it came – I think the sandwich came to around $1.70, $1.80 at cost and a roll, I think, came around $2.30, $2.50 cost price and then there was some hot food as well. I think it was hot dogs, steak sandwich, wing dings and pork rolls.
QAre they all items that you purchased from the plaintiff.
AYes.
[4] [T] p242, line7-27
She said that the arrangement to purchase food from the plaintiff changed over time as her sales increased. Towards the end of 2007 she said that she was paying around about $900 per week being $800 for food and $100 for rent. This is documented in the defendant’s contemporaneous cash flow records tendered in evidence.[5]
[5] Exhibit D1
The plaintiff agrees that the defendants do not owe any money under the terms of this agreement. Precisely how she is able to agree that in the absence of any financial records is unclear to me. Based on the second defendant’s evidence and financial records, which I accept, I find that there is no amount owing under the terms of this agreement.
The service agreement
The plaintiff contends that the defendants owe an amount under what I have termed the service agreement.
The plaintiff’s statement of claim sets out the claim under the service agreement as follows:
…..
4.     The plaintiff provided advice and assistance to the defendants in establishing their business, customer leads and telephone answering services without charge. The plaintiff further permitted the defendants to use the name Cruizen Cafe on their van (collectively “the services”).
5.     Ms Hickey promised that she would pay a fee for the services in the amount of $1000 per month (“the fee”) commencing at an in determinate time and future when she was in a financial position to do so (“the fee representation”).
……………
6.     Pending payment of the fee the parties agreed that Ms Hickey and/or Rijicach would contribute an amount calculated to represent the actual cost of goods and a fair share of overheads (“the overheads agreement”) as follows.
6.1     Rent and electricity at the plaintiff’s premises; and
6.2     Purchase and preparation of food; and
6.3     Use of the plaintiff’s credit account with beverage suppliers.
7.     Ms Hickey made a series of promises to the plaintiff between July 2006 and January 2007 that when her business was fully established she would pay the fee in consideration of the services. In the meantime the defendants continued to use the services without paying the fee.
…………..
8.     In January 2007, Ms Hickey sought the advice of the plaintiff as to a change in her service area. The plaintiff provided names of potential customers in a proposed new service area to Ms Hickey. There was further discussion about the commencement date for the fee.
9.     The parties agreed that Ms Hickey (or in the alternative, Rijicach) would commence paying the fee within two months being 1^st April 2007.
The quantum of this claim is particularised as $9,000 for the period April 2007 to December 2007.
A letter of demand was sent by the plaintiff’s solicitor to the second defendant on 15 January 2008.[6] This letter sets out the plaintiff’s contentions as follows:
In or about January 2006 you entered into an agreement (the Licence Agreement) for the right to use my client’s business name “Cruizen Café” on your business van.
It was a fundamental term of the Licence Agreement that you pay may client licence fees in the amount of $1,000 per calendar month.
During the two year period between about 1 January 2006 to 31 December 2007 my client trained you in your mobile lunch van business and consented to you servicing her clients in what was called “Run 7”.
[6] Exhibit D4
The letter of demand sought an amount of $24,000 being 24 months at $1,000 per month. On any view of the evidence this cannot be right as the plaintiff agrees that the defendant did not commence in her premises until after the Golden Chef auction which is agreed to have taken place in about April/May 2006. This was the second letter of demand and that it followed a letter seeking payment of an amount for Coca-Cola products in the sum of $5,131.51. It is surprising that the existence of this larger asserted debt was not raised in that letter.
The plaintiff’s evidence on this topic was somewhat different to both the pleadings and the letter of demand. The plaintiff gave the evidence outlined above in relation to the agreement between her and the defendants. She did not volunteer any information about the service agreement in examination in chief. She described her corporate branding and in particular the stylized paintwork on the Cruizen Café vans. She was asked as follows:[7]
[7] [T] p19, line 21 – p20, line13
QBut is it also true to say that at some time you allowed the defendant to use the name ‘Cruizen Café’ and the stylised flowers and a colour on her van.
AYes, Ms Hickey came to me and she said ‘Your business has got such a fantastic name’, and she just loved it, otherwise why else would she have asked to have the name on there? She said ‘You’re known everywhere. You’ve got such a fantastic reputation and known for great food. Can I please have your name on my van?’, and otherwise, if she didn’t think that about my company, why in the world would you put your name on the side of it? And I said ‘Well, of course. I want money for it’ and she agreed and I said ‘How does $1,000 a month sound?’, and she agreed and we were having – she said to me she was getting her lawyer to make up a document on that and she did and I have the document and I will go into that a bit later but the document was stolen out of my office but I will go into that in more detail when it comes up. My office was absolutely ransacked on the last day.
QWas there an agreement –
AAbsolutely.
QWas there an agreement as to when the defendant would commence paying the $1,000 a month.
AAt the beginning of every month.
QWas that to be paid from that point or was payment of that amount to be deferred.
AFrom the point.
QFrom that point.
ADefinitely, absolutely and I wasn’t allowing the name to go on there unless I had that and she said ‘Yes’.
The plaintiff was not however able to say precisely when the payments were due to start. She said it was about 4 – 5 weeks after the defendants entered her business premises but could not say what date that was. The second defendant says that she started operating out of the plaintiff’s warehouse in mid-May 2006.[8] I accept that evidence. If I accept the plaintiff’s evidence about the service fee agreement this would make the start date of the arrangement around July 2006.
[8] [T] p242
The plaintiff said that despite this agreement the defendants never paid for the use of the Cruizen Cafe name, branding and stylised painting. She did not mention in chief that there was any other service provided to the defendants under the service agreement. She did maintain that she had provided extensive assistance to the defendants in setting up a client run but did not give evidence of any agreement that the defendants would pay for this assistance.
In cross examination the plaintiff was asked about the service agreement as follows:
QWhat do you say Jill Hickey got in return for supposedly paying this $1000? What did she get for her money?
ARight. It’s just that before we were asked what – if she used my phone and I said yes, but it was the landline and the fax. Sorry.
QLandline and fax.
AYes.
QSo she got to use that. What else?
AShe had my name on the van, my flowers and everything and the cards. But it was mainly the name. She was going around with the name, yeah, and my design, yeah.[9]
[9] [T] p87-88
The plaintiff was asked about the discrepancies as to the dates on which she says the service agreement payment was to start; that is whether it was January 2006 as indicated in the letter of demand, July 2007 as set out in her statement of claim or around July 2006 as indicated in her evidence. In short she appeared to suggest that there was a “legal reason” for the selection of the July 2007 date following advice from her then barrister. She did not understand the reason and could not articulate it in her evidence.
The plaintiff denied in her evidence in chief that there was to be any delay in payment of the $1000 per month as outlined in paragraph 5 of her statement of claim nor did she refer to any promises made by the second defendant as outlined in paragraph 7 of her statement of claim. When the topic of delay was raised in cross-examination she responded somewhat vaguely that she might have in order to assist the defendants.[10]
[10] [T] p89-90
The plaintiff was also asked about paragraph 6 of her statement of claim. This suggested the payment for rent, electricity, food and use of her credit account with beverage suppliers was a temporary arrangement until the defendants started paying $1000 per month under the service agreement. She denied that this was the case and said that those matters were always separate and in addition to the service agreement.[11]
[11] [T] p90
The plaintiff gave evidence in chief and in cross examination that the service agreement was documented by the second defendant arranging for her solicitor to draw it up. She no longer has a copy of the agreement. The plaintiff alleges that it was stolen from her office and that it was stolen by, or at the behest of, the second defendant. This is a serious allegation of criminal behaviour. It also forms the basis of the plaintiff’s claim in respect of confidential information that she alleges the second defendant stole from her office. I will deal with this issue in more detail in that context. For present purposes I indicate that I found the plaintiff’s evidence on this topic to be unsatisfactory and I do not accept it.
The plaintiff did not give any evidence in chief about invoices for the service fee but when cross examined she asserted that she did deliver invoices to the second defendant. She did not give any evidence about the timing, format or delivery of these invoices. The defendants’ counsel called for production of those invoices but they were not produced. The plaintiff was then asked:
QAnd the invoices you say that you issued do you know where they are now?
AJill would have them.
QWell Jill says she doesn’t have them. Jill says that there were never invoices and that there wasn’t any contract. What do you say about that?
AOne of us is lying, and that’s for your honour to work out.[12]
[12] [T] p86
It appears from this passage of evidence that the plaintiff is asserting that she rendered invoices to the defendants but did not keep copies of them. This is an unusual business practice to say the least.
The plaintiff’s mother, Mrs Crook gave evidence that she was aware of an arrangement for her daughter to charge the defendants $1,000 per month to use the branding and “all the runs that Tarnya provided for her”.[13] The basis of her knowledge of this agreement is not clear, nor is her evidence consistent with that of the plaintiff. Further Mrs Crook did not say that she was aware of a written agreement to this effect nor did she give evidence of any invoices rendered by the plaintiff. She deposed to a conversation where she says the plaintiff requested the second defendant to pay the $1,000 a month and the second defendant became hostile.[14] The plaintiff did not refer to this conversation in her evidence nor was this put to the second defendant.
[13] [T] p227
[14] [T] p228
The defendants deny that there was a service agreement or requirement for payment of $1000 per month. As outlined above the second defendant denies that she required any assistance from the plaintiff to set up her lunch van business beyond the assistance that was the subject of the first agreement; namely renting a space at the warehouse and purchasing food from the plaintiff’s kitchen. The second defendant had previously run a lunch van for Golden Chef and so was not inexperienced. The second defendant said that she had not previously canvassed for business or put together runs but she arranged for a friend who had undertaken that role at Golden Chef to assist her in the initial stages of setting up her business. She denied getting any such assistance from the plaintiff.
The second defendant said that she initially wanted to call her business “Lunch on the Run” and gave evidence as to the circumstances in which she came to have “Cruizen Café” on the side of her van as follows:[15]
[15] [T] p249, line 14 – p250, line 10
AWhen I applied for the name ‘Lunch on the Run’ and I couldn’t get it, I just set up the company name instead and that’s Rijicach is Rick, Jill, Carly and Christie, the family names together. I didn’t really think about another business name or anything from there and I was talking with the plaintiff. I’m not sure exactly whose idea it was but it was an agreement that Cruizen Café be put on the side of my van. It benefitted both of us. She was, you know, letting me come into her warehouse to start a business and she was getting free advertising out of it. So it didn’t make any difference to me here nor there whether I had signs on the van or not.
QWhose phone number was on the side of the van.
ATarnya’s.
QLooking at Exhibit D5 produced, can you just confirm that that’s a photo of your van.
AYep.
QDid it look like that for the whole time that you were sharing the plaintiff’s warehouse.
AYes.
QWho paid for the sign-writing on the stickers.
AMe.
QDid you come to any arrangement about paying for the privilege of having the name on the van.
ANo.
QWhat about for using the mobile phone number of the plaintiff.
ANo.
QWhat about for the use of the landline and the fax in the warehouse.
ANo, I did all of that from home. All my daily orders I actually faxed from home.
QObviously you heard Ms Brennan’s evidence there was an agreement you pay $1,000 per month for those things.
ANo.
The second defendant denied that she had a contract for the service fee drawn up by her lawyer. She said that the first lawyer that she had ever spoken to was her present lawyer who she first consulted in January 2008. She denies being invoiced for $1,000 per month. She denied ransacking the plaintiff’s office and being responsible in any way for stealing documents from that location.
There was some dispute between the plaintiff and second defendant as to the value associated with the second defendant having the Cruizen Café signage on her lunch van. The plaintiff says that as Cruizen Café was an established player in the lunch van trade there was considerable benefit to the defendants to use that branding. The second defendant said she did not think that there was much benefit to her because she did her own canvassing, established her own runs and did not rely on the plaintiff’s reputation. The second defendant said there was an advertising benefit to the plaintiff because it was the plaintiff’s telephone number on the side of the van. Accordingly, the plaintiff would receive any calls attracted by the number displayed on the side of the van. The second defendant used her own mobile number on her business cards when she canvassing potential clients for her business.
I do not consider that the plaintiff has established that there was an agreement that the defendants pay a service fee. I infer that the letters sent by her solicitor and the statements of claim were prepared on the basis of her instructions. These documents were not consistent either with each other or with the plaintiff’s evidence in court. The plaintiff was given the opportunity to explain why these discrepancies existed but her explanations were neither cogent nor credible. I do not accept her evidence that there was a written agreement documenting the service agreement drawn up by the defendants’ solicitors that was subsequently stolen from her office. Likewise I do not accept that the plaintiff rendered invoices to the defendants for the service fee. She did not render invoices to the defendants for any other matters such as the food or the rent payment. If she did render invoices for a service fee it is surprising that she did not have copies of them or some record of the invoices in her account books. No such documents were tendered and she did not explain their absence. Further I accept the second defendant’s evidence that she did not need assistance from the plaintiff to set up her business; that she did her own marketing and set up her own run. In those circumstances, use of the Cruizen Café name and phone number on the side of the van was of limited assistance to the defendants. It seems unlikely that the second defendant would have agreed to such a substantial payment for such limited benefit to the defendants.
The soft drink agreement

It is uncontroversial that there was a further arrangement between the parties for the purchasing of soft drinks. The terms are however contentious.
The plaintiff said that she bought Coca-Cola products in bulk and got a better price than was available for smaller orders. The second defendant asked if she could purchase Coca-Cola products through the plaintiff’s account so that the defendants could take advantage of the lower prices. The plaintiff agreed. The second defendant would tell her what she wanted and it would be added to the plaintiff’s order. The defendant would reimburse the plaintiff for the cost of the Coca-Cola ordered on her behalf after it was delivered and the plaintiff received the invoices from Coca-Cola. The plaintiff referred to exhibit P3 and identified a bundle of Coca-Cola invoices at pages 5-21. She said that the second defendant would write the amount that she owed the plaintiff on each invoice. The plaintiff identified handwriting on those invoices as the second defendant’s. I interpolate at this point that this process is illustration of the difference in the approach of the plaintiff and second defendant to business matters. The plaintiff did not apparently calculate or document the amounts owed by the defendants but rather left this to the second defendant. The plaintiff says that the second defendant paid some of those amounts but not all of them. She believed that amount owed by the defendants came to around $5,000.[16] The plaintiff denied there was any reciprocal agreement whereby the defendant purchased Schweppes products for her.
[16] [T] p22
The plaintiff was asked in chief about Schweppes:[17]
[17] [T] p23, lines 11-29
QWhat do you say to the suggestion that you had to rely on the defendant to purchase Schweppes drinks for you because your credit facilities with Schweppes had been withdrawn.
AShe is going to try and get out of this the best way she can.
QCan you just answer that question. There is a suggestion that you weren’t able to purchase –
AWell, it here in black and white.
QThere is a suggestion that you weren’t able to purchase Schweppes drinks because your credit facilities with Schweppes had been withdrawn because you had failed to pay your accounts.
AWell, here they are.
QSo that is not true.
AAbsolutely not. I was buying Schweppes.
QAnd then is it not true that the defendant was buying Schweppes drinks for you.
AAbsolutely not, not a drink.
The plaintiff referred, in that passage of evidence, to a bundle of Schweppes invoices rendered to her.[18] The difficulty with the proposition that those invoices demonstrate that the plaintiff was able to purchase Schweppes products is that the last invoice is dated 27 March 2007. The plaintiff also said that she could purchase Schweppes products from Campbell’s Cash and Carry. Invoices were produced to demonstrate that proposition.[19] Despite the difficulty that the plaintiff had in identifying all of the Schweppes products on those invoices I accept that she did from time to time purchase such products in that manner. These invoices however do not negate the possibility that the plaintiff also purchased Schweppes products on the defendants’ account. It is apparent that she purchased a number of items including Coca-Cola products from Campbell’s Cash & Carry from time to time despite having an account with Coca-Cola. The quantities of Schweppes products purchased was limited and in line with the quantities of Coca Cola products purchased from the same source.
[18] Exhibit P3 p 22-52
[19] Exhibit P3 p 53-73
The quantum of the Coca-Cola debt is not clear on the plaintiff’s case. It was the subject of a letter of demand to the defendants dated 14 January 2008.[20] The claim was set out in that letter and amounted to $5,131.51. The pleadings filed by the plaintiff quantify the Coca-Cola debt as $5,726.43. In evidence the plaintiff added up the invoices in exhibit P3 and stated that the amount owing was just over $6,000. The plaintiff was asked to explain these discrepancies. She was not able to offer a cogent explanation.
[20] Exhibit D3
There is a problem with the invoices upon which the plaintiff relies. There is an invoice dated 20 September 2007. The total of that invoice is $4,118.71. There appear to be two copies of that invoice at pages 10 and 11 of exhibit P3. The invoice on page 10 appears in a different format to the invoice on page 11 and the date on each is in a different format[21] but in every other respect the information contained within these documents is the same. The invoice at page 10 has notations in handwriting as follows: “Jill owes $512.20” and “Paid”. The second defendant has identified these notations as her writing. The invoice on page 11 has a notation “Jill owes $810.70”. Mrs Hickey denies that this is her writing and says that the manner in which her name “Jill” is written with a line at the top of the “J” is not how she writes her name. She says that she always writes it without a line. This document also contains writing that the plaintiff identified as hers. The first says “Payed T.C. J.H. payed 0”(sic) and the second says “Paid Jill paid 0”.
[21] Page 10 has the date as 20/9/07 and page 11 has the date as 9/20/07
The defendant tendered three additional Coca-Cola invoices dated 20 September 2007.[22] The first is a copy of the invoice at page 11 of exhibit P3 with the same notations. The second is in identical format and content as page 11 of exhibit P3 but does not contain the same handwritten notations. At the top of this document there is a fax header dated 11 January 2008 apparently from the Coca-Cola credit department for the attention of “Tania (sic) - Cruizen Café”. The date in the body of the document is in a different format namely 20/9/2007 as opposed to 9/20/2007. There is some additional printed material and a signature on this document. The signature was not identified. The third is the same as the second except that the date is in the format 9/20/2007 as opposed to 20/9/2007. This document has two fax headers. One from Coca Cola Amatil which is partly obscured by the second from the plaintiff’s husband’s business Progressive Landscaping apparently dated 14 January 2008. It has a handwritten note “this has been payed (sic), no money received from Jill”. This was identified as the plaintiff’s handwriting.
[22] Exhibit D2
The plaintiff was cross-examined at some length about these invoices. She maintained that the “Jill owes” notation on each was in the second defendant’s handwriting. She said that the second defendant had paid the amount of $512.20 set out on the page 10 invoice but that she still owed the amount of $810.70 set out on the page 11 invoice even though they are the same date and the same total amount. When asked to explain why that might be she said that perhaps Coca-Cola made a mistake.[23]
[23] [T] p76
Mrs Crook gave evidence on this topic confirming that the defendants purchased Coca-Cola from the plaintiff. Her evidence about Schweppes indicated that the defendants had their own account with Schweppes. She was less clear about the plaintiff’s position with Schweppes. I found this evidence unhelpful.
The second defendant described the soft drink arrangement as follows:[24]
QCan you tell her Honour about the arrangement you had for the purchase of Coca-Cola branded soft drinks.
AOkay. That started early 2007. I was getting Schweppes deliveries, the plaintiff was getting coke deliveries. Coke don’t like to deliver if you are only ordering a small amount so I was getting my coke previously from Campbells. I would go there a couple of times a week for different purchases of things. We came to an agreement – I know that she ended up being on stop supply from Schweppes where they refused to deliver to her –
QHow do you know that.
AThe rep told me. Then we came to an agreement that if she ordered Schweppes from me I would order coke from her. We’d get better pricing on both Schweppes and coke.
QHow did you work out how much money was owing to each other.
AWell, she’d write out, or let me know, what she would want to order and then I would add to the order and then when the delivery came in I’d mark it on the invoice, on the coke invoice. I would write ‘Jill owes’ blah blah on it and on the Schweppes invoice I would write it on there as well.
[24] [T] p243, line 18 – p244, line 3
The second defendant tendered a journal that she maintained of her expenditure[25] which she said shows, amongst other items of expenditure, the payments that she made to the plaintiff for rent and food and in respect of Coca-Cola. She also tendered a schedule that she had prepared which set out the adjustment she made for the Schweppes and Coca-Cola invoices covering the period August 2007 to December 2007.[26] That schedule shows orders of Schweppes said to be made on behalf of the plaintiff by the defendants and orders of Coca-Cola said to be made on behalf of the defendants by the plaintiff. The latter figures are consistent with the invoices tendered by the plaintiff. In relation to the invoice for 20 September 2007 the amount due and paid by the defendants is said to be $512 which is consistent with the notations on the invoice at page 10 of exhibit P3. There is no amount said to be owing for the same date in the sum of $810.70 as contended by the plaintiff. The defendants also tendered a bundle of Schweppes invoices which are consistent with the dates of the Schweppes invoices contained in the summary prepared by the second defendant.[27] These contain notations which the second defendant says are in her handwriting detailing the breakdown of the invoice between the plaintiff and the defendants. These notations are consistent with the second defendant’s summary.
[25] Exhibit D1, tab 7
[26] Exhibit D1. tab 4
[27] Exhibit D1, tab 2
The second defendant says that she paid all money owed to the plaintiff on 21 December 2007 the last day that she was at the plaintiff’s warehouse. The money was paid in cash in an envelope. She said that the total amount paid was $2350 and that this comprised $800 for food, $100 for rent and $1450 for soft drinks in accordance with her schedule of the Schweppes and Coca-Cola invoices.[28] When this was put to the plaintiff in cross examination she agreed that the second defendant gave her an envelope which contained money but denied that it contained any payment for soft drinks. The plaintiff said that she opened the envelope then and there and that the cash for rent, electricity and food was “perfectly balanced” but there was no payment for Coca-Cola. Again, it is not plain to me how the plaintiff could reach that conclusion given her lack of record keeping. She said that she thought there was “either $600 or $700” for the rent electricity and food in the envelope.[29]
[28] [T] p248-9
[29] [T] p83-84
The plaintiff’s version of events is supported by Lisa Lister who swore an affidavit[30] and gave evidence about a conversation that she heard at the time the second defendant handed the plaintiff an envelope of cash. This appears to be the last day that the second defendant was at the plaintiff’s premises. I did not find Ms Lister to be a helpful witness. She appeared to be somewhat partisan. In one aspect her evidence was plainly wrong. I will refer to this in the context of the allegations of defamation. In any event I reject her evidence on the topic of the payment by the second defendant.
[30] Exhibit P6
Melissa Dickson (now Davey) was the plaintiff’s second in charge at the relevant time. She swore an affidavit[31] and she gave evidence. She was able to depose to receiving cash payments from the second defendant for rent. She also deposed to the terms of the soft drink agreement which were consistent with the evidence given by the second defendant. She was cross-examined about her evidence that the reason the plaintiff purchased Schweppes through the defendant was the plaintiff’s poor credit rating with Schweppes.
[31] Exhibit D17
The effect of Ms Davey’s evidence was that the plaintiff’s credit problems with Schweppes occurred in about December 2006 to January 2007. She was plainly mistaken about this given the invoices I have referred to above went to 27 March 2007. Whilst she was mistaken about the timing the invoices are not otherwise inconsistent with her evidence that Schweppes stopped supplying the plaintiff directly at some point and that she then purchased her Schweppes soft drinks through the defendants account. The plaintiff’s mother gave evidence of assisting the plaintiff with cash injections from mid-2007 onwards due to financial difficulties and this is also consistent with the limited financial documents disclosed by the plaintiff. Furthermore there is evidence, such as that from Mr Lound, Mr Perotta and Mr Meyer, that the plaintiff was having difficulties making payments to other suppliers. This all tends to support Ms Davey’s evidence on this topic. Finally Ms Davey gave evidence that the plaintiff never mentioned to her that the defendants owed her money for Coca-Cola.
I prefer the second defendant’s evidence about the soft drink arrangement to that of the plaintiff. The plaintiff’s evidence about her Schweppes account is not supported by the invoices that she tendered as outlined above. The second defendant’s evidence is more consistent with the contemporaneous documents. The plaintiff’s evidence was unclear and inconsistent with the letter of demand written by her solicitor and her pleadings. The various Coca-Cola invoices dated 20 September 2007 are also troubling. The plaintiff’s evidence about the final cash payment made by the second defendant also lacked cogency. She asserted that she was paid in full for rent, electricity and food and yet did not recall how much that amounted to. She produced no records to establish the amount due or paid. I reject her evidence that she raised the topic of a shortfall in the payment notwithstanding the supporting evidence of Ms Lister. In summary I find that the plaintiff has failed to establish that the defendants owe anything in respect of the soft drink agreement. On the contrary I accept the defendant’s evidence that any amounts owed were paid in full on 21 December 2007.
The Closure of Cruizen Cafe
The remaining aspects of the plaintiff’s claim relate to the closure of the Cruizen Café business. It is an agreed fact that the plaintiff entered into a contract for the sale of Cruizen Café in July 2008 for the sum of $200,001. In summary the plaintiff says that actions of the defendants caused the necessity for that sale of business. Specifically it is contended that as a result of certain representations made by the defendants[32] and the defendants’ use of the plaintiff’s run sheets and/or customer lists[33]….
…between the period January 2008 until May 2008 certain of the plaintiff’s customers being those set out in the attached schedule marked “B” have become customers of Rijicach and/or have ceased contracting with the plaintiff.[34]
[32] Third Statement of Claim para 13, 14, 16 and 17
[33] Third Statement of Claim para 11.5 and 11.6
[34] Third Statement of Claim para 15
The plaintiff contends that she has suffered loss and damage in the sum of $1,307,482 as a result of the defendants’ actions. This claim is particularised by reference to two forensic accounting reports obtained by the plaintiff.[35]
[35] Third Statement of Claim para 18
The parties filed a statement of agreed issues that sets out the issues relating to this aspect of the plaintiff’s claim as follows:
·Whether the defendants unlawfully obtained and used confidential
information belonging to the plaintiff consisting of “run sheets” bearing the names of the plaintiff’s customers
·Whether the defendants defamed the plaintiff and/or engaged in misleading
and deceptive conduct in order to induce customers of the plaintiff to discontinue purchasing food from the plaintiff and to instead purchase food from the defendants
·If the plaintiff has established that either of these matters occurred then the
issue is one of causation namely whether the defendants’ conduct resulted in any loss to the plaintiff.
I will deal with these issues in turn.
Confidential Information
The basis of the plaintiff’s claim against the defendants in relation to the run sheets appears to be a claim in equity. Equity will protect information that has been obtained by reprehensible means as is alleged in this matter.[36] To be protected in this manner the information must be confidential.[37]
[36] Sullivan v Sclanders, (2000) 7 SASR 419 at para 51, 54.
[37] Sullivan see; note 29 above at para 52
In order to be confidential, information must not be in the public domain or common knowledge. In a commercial context the courts have identified a number of factors to determine whether information is confidential or a “trade secret” namely[38]:
[38] Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37; Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317; Lansing Linde Ltd v Kerr [1991] 1 All ER 418; Del Casale v Artedomus (Aust) P/L (2007) 73 IPR 326.
·The extent to which the information is known outside of the plaintiff’s
business;
·The extent to which the information was known by employees and others
involved in the business;
·The extent of measures taken by the plaintiff to guard the secrecy of the
information;
·The value of the information to the plaintiff and to competitors;
·The amount of effort or money expended by the plaintiff in developing the
information; and
·The ease or difficulty with which the information could be properly
acquired or duplicated by others.
The plaintiff gave evidence about run sheets that she used in the conduct of the Cruizen Café business. A number were tendered in evidence.[39] She explained that the run sheets are given to the driver of a lunch van so that the driver knows where to go and when. They indicate when the lunch van was to visit particular work sites together with a list of the contact people and telephone numbers for each business visited by the van. The run sheets may also have some notes as to particular issues associated with particular work sites. The plaintiff said that she considered the run sheets to be an asset of her business and that the information was not made publicly available. She was asked in chief about the value of such material to a competitor.
QIs this information that you would particularly not want to fall into the hands of a competitor.
AGolden Chef used to lock all their run sheets up at night in a safe. There is no way I would want a competitor have this; and again, it’s mainly the times because I’ve done all the hard work for them. They could grab this piece of paper and just go boom, boom, boom, boom, I’ve done it all for them; they know the times, they know where to go, they know the parking. And again, it’s mainly the times that would – if a competitor didn’t know the times they would be quite messed up, you Honour. But because they would know the times, it would make it very, very easy for them.
QYou told the court that you provided the defendant with some assistance to establish her business. After you told the court she tried to establish a run in the Beverley area and, according to your evidence, failed, did you provide the defendant with a run sheet.
AWhen you said ‘provided some assistance’, I would disagree. It would be a lot of assistance. And there is no way I would give her one of these run sheets. Why would she want one? These are my own run sheets. I was organising calls for her in Wingfield and then she would have her own run sheet.
QSo when you say that this is information that you would not like to fall into the hands of a competitor, that would include the defendant.
AAbsolutely. Absolutely.[40]
[39] Exhibit P3, p74-88
[40] [T] p26, line 29 – p27, line 18

The plaintiff gave evidence that she saw the second defendant with copies of Cruizen Café run sheets.[41] The plaintiff says in her statement of claim that the second defendant removed copies of run sheets and customer lists from the plaintiff’s premises.[42] In her affidavit which was tendered in evidence,[43] the plaintiff said that on the last day of trading before Christmas she arrived at work to find her office ransacked. She says that she thought she had been burgled and was about to call the police but “one of my van drivers Melissa Dixon (sic) told me something which caused me to hang up the phone. I will give evidence about that conversation at trial”. [44] The plaintiff gave evidence in chief about this topic as follows:
A. It was the last day of 2007 It was the last day of 2007 and I had no idea what was going on, and I came to work and my office was ransacked, and all of Jill’s drinks were gone and I had no idea what was going on. I thought I had been burgled. You should have seen my office, your Honour. It was – and I know what – sorry, I’ll start – anyway it was just mess everywhere. All my filing cabinets pulled out. There was, someone had gone through it and I’m like ‘Oh, your joking’ and I got on the phone to ring the police and one of the girls said ‘Put the phone down Tarnya, it was Jill’ and I said ‘What do you mean ‘Jill’?’ And they said ‘She’s gone’ and I said ‘What do you mean ‘gone’?’ and she said ‘She’s out of here, she’s packed up and she’s gone’. And I had no idea. She never – she never breathed a word to me. And I wondered why – I said ‘Who what’s happened to my office?’ and they said – well, they didn’t know for sure but they said “It must have been Jill”………………[45]
[41] [T] p37
[42] Paragraph 11.5
[43] Exhibit P2
[44] Exhibit P2 para 57
[45] [T] p28-29
She did not identify the person she spoke to but I infer that it must have been “Melissa”. In cross-examination she was asked about this incident as follows:
QI want to ask you about the incident you gave evidence about, your office being I think ransacked or you thought it had been burgled. Is it right that you were not present when that happened.
AWell, absolutely.
QIs it right that when you spoke about this incident to Melissa, Melissa didn’t tell you she was present either.
AShe told me not to call the police.
QMy question is: were you led to believe –
AI have no idea
Q– that Melissa was present.
AI have no idea. She just said ‘Don’t call the police. It was Jill’ and they were her exact words and then she said Jill had left.
Q Did you end up calling the police.
AI was on the phone at the time. I did call the police afterwards but there was nothing that they could do. They came around but like you’ve just said, I didn’t have proof. I didn’t catch the person.[46]
[46] [T] p104-105
Melissa Dickson (now Davey) gave evidence for the second defendant. She did not mention this incident nor was she asked about it. This is surprising in view of the plaintiff’s evidence. I infer that her evidence would not have supported the plaintiff’s contention that the second defendant removed papers from her office.
In cross-examination the plaintiff was asked about the commencement of her business. She purchased a business operating as Julie’s Choice; specifically a lunch van, its equipment and an established run with customers. She said it was a small run and she built it up.[47] She was then asked about an employee who came to work for her from Golden Chef.
[47] [T] p54-55
QWhen Kim came to work for you and you bought the second van, she had previously been working at Golden Chef.
AThe purple one, yes.
QIs it right that she brought with her some of the customers that she used –
AAbsolutely not. I wouldn’t have it. I went and established that run myself.
QSo in para.27 of your affidavit you say ‘I employed Kim to drive the second van. Kim developed her own run for me. I think she took some customers from Golden Chef.
AI was just about to clarify, she did end up taking a few over and I remember I was quite upset about it but the customers were really upset with Golden Chef. I actually, I told her that when we get the run, I don’t want any calls from Golden Chef but she did.
QBut you ended up allowing it.
AShe did, yeah. I wasn’t happy about it but she did. But then, Ms Clark, if those calls didn’t come to me, they would have gone to someone else. They were leaving Golden Chef.[48]
[48] [T] p55
She was then asked about the third van that she purchased as follows:
QSo the next one, the third van you purchased, it was Tasma who drove that one and likewise, had she been working at Golden Chef in the past.
AYes and unfortunately she bought all the run with her.
QThe last van, jumping ahead a few but the seventh van, that was the one driven by Caroline.
ANo, van 7 was Jill’s. sorry, it was my seventh van, that’s correct and that was a run from Lunch to You – Lunch on the Run, or Lunch to You.
QIt doesn’t really matter which of those it was called but do you agree that when Caroline came, she also brought customers with her.
AShe had a complete run, her complete run. I didn’t have anything to do with building up her run or getting her run. She brought it with her, yeah.
QSo when you said in your evidence earlier today that you were solely responsible for building up all of the runs that you used –
AYeah, sorry, that was incorrect.[49]
[49] [T] p55-56
The second defendant identified a run sheet dated 6 January 2008 for Wingfield[50] as a document that she prepared herself for customers that she canvassed. There is no obvious cross over between these customers and the list of customers identified in Schedule “B” of the Plaintiff’s statement of claim. The second defendant said that run sheets change on a regular basis; some businesses change lunch van operators, some close down and some change their times.
[50] Exhibit D1, tab 5
The second defendant identified another run sheet as Tasma Gibson’s running sheet. Tasma came to work for the defendants following her departure from the plaintiff’s warehouse. The second defendant explained the circumstances as follows:
QHow did you come to have a copy of Tasma’s running sheet.
ATasma had originally worked at Golden Chef, she then was not – Golden Chef were having that financial difficulty where they weren’t have the stock and things on the van. I don’t know who approached who when it came to Tasma ended up working at Cruizen Café with her running sheet from Golden Chef, I don’t know how that came about. But these were actually calls, I would say the majority of them, the calls that Tasma did from Golden Chef, then went to Cruizen Café and then in April 2008 I was approached by Tasma to see if she could gain employment with me. If I could get another van she would bring her run over to me.
QIs that what happened.
AI denied – I didn’t want her to come over at first because the last few months with Tarnya had been a nightmare, but I did feel sorry for Tasma, I did end up purchasing another van and she did come over and work with me.[51]
[51] [T]p257-258
The second defendant denied taking any Cruizen Café run sheets in the manner asserted by the plaintiff and disagreed with the evidence that the plaintiff gave about seeing them in her hands.[52]
[52] [T] p258
The second defendant was cross-examined about the run sheet entitled ‘Tasma’s run sheet’. It was dated February 2008 but she agreed that Tasma did not start operating a Lunch Line van until May 2008. She was then asked as follows:
QThat’s three months before Tasma started.
AThere was probably no changes so there was no need to update the run sheet.
QWho was operating that run.
ATasma from Cruizen Café. She was still working at Cruizen Café up until May 2008.
QYou are saying this is in fact Cruizen Café’s run sheet.
AThis is Tasma’s run sheet when she was running at Cruizen Café.
QHow did you get it.
ALater when Tasma worked for me, or it could have come through with all the emails with Tarnya’s order. I don’t know which one it was. We had a few.
QLet me suggest to you that this is one of the run sheets which you took from the plaintiff’s office probably on the evening of 20 December.
ANo.[53]
[53] [T]p288-289
The second defendant then gave evidence that run sheets were not essential to drivers. She said that some people learn runs in a very short space of time and that the run sheet was only required if a relief driver had to take over a van. She said lunch van operators go to the same places day after day such that it becomes routine and that drivers would not refer to their run sheet on a daily or regular basis unless there was a change.[54]
[54] [T] p291
The second defendant was cross-examined about the manner in which the defendants’ business was built up following her departure from the plaintiff’s warehouse. She gave evidence about purchasing new vans and setting up runs for those vans. She denied using run sheets obtained from the plaintiff. She agreed it could be a time consuming exercise to develop new runs but says that she stopped driving around the middle of 2009 in order to develop new runs and she also had her daughter come into the business to do canvassing for her.[55]
[55] [T] p294-295
In re-examination the second defendant was asked about her belief as to who owned Tasma’s running sheet when she came to work for Lunch Line in May 2008. The second defendant said she believed Tasma owned that running sheet.
The defendants therefore admit that Tasma Gibson brought a run sheet with her when she left Cruizen Café to work for the Lunch Line business in about May 2008. This is the only run sheet that the plaintiff has established the defendants received from her business. I do not accept that there were any other run sheets taken by the defendants as asserted by the plaintiff. I reject the plaintiff’s assertion that the second defendant stole run sheets from that office. Likewise I reject the plaintiff’s evidence that she saw her run sheets in the second defendant’s hand.
It is my view that the plaintiff has not established that Ms Gibson’s run sheet was confidential information. Even if it was I do not accept that the plaintiff is entitled to equitable relief in respect of the run sheet having regard to the manner in which it came to the defendants. She in effect, obtained the run sheet in precisely the same way that the defendants did namely by employing Ms Gibson who brought the document with her. Finally, I note that no evidence was given as to the value of the clients set out in Ms Gibson’s list or the effect of the loss of that run to the profitability of the plaintiff’s business.
I dismiss the plaintiff’s claim relating to confidential information.
Defamation/Misrepresentation
The basis of the plaintiff’s claim for defamation and/or misleading and deceptive conduct is based on a number of representations set out in the plaintiff’s statement of claim. It is alleged that the second defendant, between December 2007 and May 2008 falsely represented to employees of certain of the plaintiff’s customers that:
14.1 The ingredients used by the plaintiff were often stale (sic) and that there were occasionally maggots in food offered for sale to customers; and
14.2 That the plaintiff’s staff were unhygienic as to be disgusting in the preparation of food (“the representations”). (sic)[56]
[56] Third Statement of Claim
The representations were said to have been made to Lisa Lister at JG Schulz Body Builders, Stephen Richard Davies at Bradken and John Charles Barnes at Motorwell. Each of these people gave evidence. In addition Ian Sutton – who was not named in the pleadings swore an affidavit and gave evidence about representations. It is contended that the defendants made these representations in order to induce customers of the plaintiff to discontinue purchasing food from the plaintiff and to instead purchase food from the defendants. The second defendant denies making the representations alleged.
Did Ms Hickey make the statements alleged?
The plaintiff gave evidence that there were a number of occasions following December 2007 when she and the second defendant attended the same business premises with lunch vans and a dispute ensued. She described an incident at Bradken. They were both there with their food vans and the plaintiff says that second defendant made comments to the effect that the plaintiff’s food contained maggots and was mouldy.[57] An altercation ensued. Following this altercation the plaintiff says she was not able to take her van to Bradken.
[57] [T] p34-36.
The plaintiff said that there were similar incidents at Catcom and Shultz Body Builders. The plaintiff asserted that she saw the defendant attending many of her customers and telling them that they would get sick if they bought from the plaintiff’s vans. The plaintiff named a number of companies where she was told not to come back because if there was even a slight chance that what the second defendant was saying was true they could not afford to take the risk.[58]
[58] [T] p37-38.
Ms Lister swore an affidavit which was tendered in evidence[59] and also gave evidence at the trial. In her affidavit Ms Lister deposes as follows:
2.     I recall an incident in March or April 2008 at a place called Shultze’s     Body                Builders on Cormack Road at Wingfield. I had gone there to inquire about                buying a trailer.
3.     I arrived there at about 11 am. I went with my partner Sam Jondal.
4.     When we arrived, Tarnya was there with her lunch van. About a minute                later, the defendant Jill Hickey arrived with her lunch van. She parked her         van about 5        metres from Tarnya’s van around the back of the premises near         the workshop.
5.     There were about 12 to 13 men around Tarnya’s van when Jill arrived.
6.     Jill started abusing Tarnya and told the men that they should not buy food              from Tarnya’s van because her food was old, stale and mouldy. She said          that Tarnya’s food was poisonous and would make them sick. Jill was very                angry and wasyelling.[60]
[59] Exhibit P6
[60] Exhibit P6.
During cross examination Ms Lister said that she went to look at car trailers. It was put to her that this business does not sell car trailers. She asserted that they did. When shown a number of documents demonstrating that they only sell large truck trailers Ms Lister asserted that at the time she went there they did have car trailers and that they must have sold them at that time.
Mr Stephen Davies is an employee of Bradken. He swore an affidavit which was tendered in evidence.[61] He was cross examined on that affidavit. He referred to an incident that he observed between the plaintiff and the second defendant some 6 years ago. He did not hear what was being said but there was a verbal confrontation between the two women. As a result of this the HR manager of Bradken banned both the plaintiff and the second defendant from coming onsite. The reason for that was the confrontation; it had nothing to do with the quality of the plaintiff’s food.[62] Another company attended but did not measure up and eventually the plaintiff’s van was allowed to return provided that the plaintiff herself was not driving.
[61] Exhibit P9.
[62] [T] p152.
Mr Davies then went on to depose to receiving a telephone call from the second defendant to ascertain how she could get her van to return to Bradken. He said that during that call the second defendant made derogatory comments about the plaintiff’s food. He could not remember the precise terms of the conversation but two of the things he could remember were that she said the food was stale and had maggots in it.[63]
[63] [T] p53-154.
Mr Barnes swore an affidavit that was tendered in evidence.[64] He was employed as a Sales Consultant at a second hand car dealer in Gepps Cross. He said that the plaintiff used to visit that business twice a day, Monday to Friday, in her lunch van. There were about 12 – 14 people who would buy their food from the plaintiff. He said that over Christmas and New Year the plaintiff had a break and usually when she did this she arranged for another lunch van to visit. The second defendant started coming during the 2007 – 2008 break and he thought that the plaintiff had arranged this. He overheard the second defendant saying that someone got food poisoning from the plaintiff’s food and that it did not surprise her because the plaintiff’s food preparation area was in a disgusting state. Mr Barnes said that his manager told him that he needed to get rid of the plaintiff. Mr Barnes told the plaintiff that he could not use her van any more and he arranged for another lunch van to come. He did not arrange the second defendant to attend because he did not like her.
[64] Exhibit P10.
Ian Sutton is the Managing Director of a business that imports and retails garden pots. The business is based in Wingfield. The plaintiff visited his business twice a day every day with her lunch van. He and his 2 or 3 employees would buy food and drinks from the plaintiff’s van. He said that in early 2008 the second defendant came to his business and asked if he was interested in having her lunch van visit. In his affidavit he deposed as follows,
8. She told me that Tarnya’s food second rate and that her kitchen was not up to scratch. She told me that people had been sick from eating from Tarnya’s vans. She said that Tarnya had been supplying businesses in the area with spoilt food.[65]
[65] Exhibit P5.
He said he had never had a problem with the plaintiff’s food but decided not to have her visit any more because he could not take the risk of employees getting sick and they started using a van from Churchill Road Snack Bar. He did not use the second defendant because he knew she was having a dispute with the plaintiff. It was put to Mr Sutton in cross examination that he did not have a particularly good memory of the conversation. He agreed that he could not remember it word for word but the basics were still there.
The second defendant Ms Hickey denied making derogatory comments about the plaintiff’s kitchen hygiene and food quality as alleged.[66] She said she did not know any of the people who gave evidence on this topic although she believes she may have seen Mr Davies from Bradken.
[66] [T] p260-262 & 279-281.
It is plain from the tenor and content of the evidence of the plaintiff and the second defendant that there was a significant degree of antagonism between them following the second defendant’s departure from the plaintiff’s warehouse. There was the altercation at Bradken. Although each ascribed the blame to the other and stated a different cause for the argument it is plan that it was a significant argument. Evidence was also given concerning a text message sent from the plaintiff’s husband’s mobile telephone to the defendant which reads:
Enjoy everything that you have. Coz I have made it my new ambition to take every possession that you have. You are the lowest scum that has walked the earth.[67]
[67] Exhibit D6.
Both the plaintiff and her husband deny sending that text message. The plaintiff claimed that Caralyn Williamson told the plaintiff that she had written the text message.[68] The plaintiff did not ascribe any motive to Ms Williamson other than asserting that she hated the second defendant and was always arguing with her.
[68] [T] p125.
Ms Williamson gave evidence. It was put to her that she borrowed Mr Brennan’s phone on 20 January 2008 and sent the text message. Ms Williamson denied that she did this and further denied the evidence of the plaintiff and her mother that she frequently argued with the second defendant. Ms Williamson said that she did not have much to do with the second defendant as she worked for the plaintiff. Ms Williamson left the plaintiff’s employment in September 2007 some four months before the text message was sent. I accept Ms Williamson’s evidence. I infer that the plaintiff sent the message on her husband’s telephone. The text message together with the altercation at Bradken, demonstrates the state of the relationship between the parties at the relevant time.

The question is whether the plaintiff has proved on balance that the second defendant made the statements complained of. Generally I have not accepted the plaintiff’s evidence on controversial matters. However, there is other evidence concerning these statements that is supportive of the plaintiff’s evidence. I was not satisfied with the evidence of Ms Lister. Her evidence appeared partisan and tailored to assist her friend. Further I found her evidence about the reasons for being at G J Shultz Body Builders unconvincing particularly in view of the evidence that G J Shultz Body Builders did not, at any stage, sell car trailers.[69]
[69] Exhibit D13
The other three witnesses on this topic, however, gave credible and cogent evidence of the statements made to them or in their presence. There was no apparent link between any of these three men. Nor did they appear to have a close association with the plaintiff beyond being her customers. In those circumstances I find, on balance, that the second defendant did make the statements complained of.
Were the statements untrue and/or defamatory?
The plaintiff contends that these representations were misleading and deceptive and further that they were defamatory of her in that they inferred that she:
16.1 was unfit for her trade and profession; and
16.2 permitted her staff to provide stale and unhygienic food to customers.[70]
[70] Third Statement of Claim para.16
It is said that the words were clearly heard, directly referred to the plaintiff and had a plain meaning that the plaintiff’s food was unhygienic and likely to cause illness to those who ate it. The plaintiff does not have to prove that the statements are untrue for the purposes of defamation. If a defendant wishes to maintain that a statement is true it is for the defendant to prove that is the case. In this matter the defendants do not maintain truth as their defence rather the defendants deny that the statements were made. I have found that they were made. I am further satisfied that they were untrue. They were also misleading and deceptive. I find that the statements were defamatory as they are not only capable of conveying the meaning complained of but actually convey that meaning to the ordinary reasonable person hearing such statements. The plaintiff does not have to explore the question as to whether people to whom defamatory material is published do or do not believe it.[71] The statements convey defamatory imputations that could injure the plaintiff’s business.[72]
[71] Morgan v Odhams Press Ltd [1971] 1 WLR 1239 & Cornes v 10 Group Pty Ltd & Ors (2011) 114 SASR 1
[72] John Fairfax Publications Pty Ltd v Gagic (2007) 230 CLR 291
Consequences of the misrepresentation and/or defamation
The plaintiff has claimed damages both in respect of misrepresentation and defamation and has quantified her loss as the loss arising from the sale of her business. The plaintiff names a number of other businesses said to have been her clients and who subsequently ceased being her clients in Schedule B in the Statement of Claim. No evidence was produced establishing that these entities were customers beyond the fact that some are named in some of the run sheets produced. No evidence was given as to the timing of the departure of those customers. No evidence was given as to the value of those customers to the plaintiff’s business or the effect of the loss of those customers other than in very general terms. No link has been established between the businesses named on that list and any representations by the defendant. It is possible that the businesses left for other reasons. There was evidence which I accept that this was a highly competitive market. There was no evidence that the customers went to the defendants. It is possible that the plaintiff could have lost customers to other lunch van operators besides the defendants for reasons unconnected with the statements made by the second defendant. At about the same time it appears from the evidence that the plaintiff lost other employees to other employers. There is no evidence as to what happened to their runs but given the evidence it is at least possible that one or more of these staff members could have taken their runs with them.
Surprisingly the plaintiff has not named Bradken, Motorwell or Mr Sutton’s business “Cheap Pots” in Schedule B in the Statement of Claim. The evidence of Mr Barnes and Mr Sutton clearly indicates that the plaintiff lost business from Motorwell and Cheap Pots in consequence of the misrepresentations. No evidence was given as to the value of that custom to Cruizen Café.
Mr Davies’ evidence was that the plaintiff was prevented from attending at Bradken due to the altercation rather than the second defendant’s statements. Indeed it appears that subsequently the plaintiff was able to send her food vans to Bradken as long as she did not drive the van herself.
Economic loss
The plaintiff has not chosen to particularise her loss in relation to specific customers rather she says that the defendants’ actions caused the sale of her business. She calculates the loss associated with this to be $1,307,482. The defendant says that at most the plaintiff’s loss is $1999.00. The basis for the difference is a difference of approach to the valuation of the plaintiff’s business by the two forensic accountants who were called in this matter.
In factual terms the issues are:
·Did the second defendant’s misrepresentations or defamatory
statements cause a decline in profitability of the plaintiffs business?
·Whether the plaintiff’s business had any maintainable earnings
and any value above the value of its net tangible assets; and
·Whether the plaintiff is entitled to any loss of future profits or loss of
opportunity.
I reject plaintiff’s assertion that her business was profitable prior to the defendant’s departure from her warehouse. It is clear from the evidence that she was experiencing financial issues prior to that date.
The second defendant says that the reason she left the warehouse was that she was concerned that the plaintiff’s business was in financial difficulties. She said that they shared many of the same suppliers and delivery drivers. Those people were coming to her with concerns about late payments by the plaintiff. She decided that she had to find her own warehouse because she knew she could not run her business from home if something happened to the plaintiff’s business.
The second defendant’s evidence about the plaintiff’s financial difficulties is supported by three suppliers. Mr Perrotta sold Nippy’s products to the plaintiff and described difficulties being paid in 2007. He is still owed money by the plaintiff. Mr Lound sold Kronpuss bakery products to the plaintiff from about 2004. He said initially the plaintiff paid regularly but that progressively the payments were more drawn out. Ultimately he was obliged to commence proceedings in the Magistrates’ court. He obtained judgment but has not been paid. Mr Myers supplied Farmers Union products to the plaintiff for over 8 years. He said that it was not long after the Golden Chef auction that he started to experience difficulties being paid by the plaintiff. He is still owed money by the plaintiff. Both Ms Williamson and Ms Davey who used to work for the plaintiff have given evidence about these financial difficulties. Ms Williamson indicated that they were apparent to her when she started working for the plaintiff in August 2006. She left in September 2007 because of these issues and went to work in hardware store. Ms Davey referred to difficulties with the Schweppes accounts as outlined above.
The plaintiff has only provided very limited financial records for the Cruizen Café business. These do not establish that it was a profitable business. Indeed it seems likely that the financial position may have been somewhat worse than demonstrated in the financial documents produced given that the financial documents for the financial year ended 30 June 2007 appear to understate the wages bill quite considerably. [73] The profit and loss summary tendered by the plaintiff[74] summarises what financial material there is. It demonstrates very limited net profits in the financial years ended 30 June 2003, 2004 and 2005 of $12,368, $24,256 and $6,060 respectively. Large losses were recorded for the following two financial years of $74,144 for the year ended 30 June 2006 and $108,024 of the year ended 30 June 2007. There was no allowance for proprietor’s wages in the accounts. The gross profit in each financial year is low and substantially below industry norms as demonstrated by the evidence of the accountants. It is also lower than that calculated by the second defendant. Given a low gross profit it was necessary for the plaintiff to exercise rigid control over expenses. The increased expenditure following the plaintiff’s purchase of extra vans at the Golden Chef auction and the move to the new warehouse appears likely to account for the substantial losses thereafter.
[73] Transcript p59-62
[74] Exhibit P11
The plaintiff attempted to explain the decline of her business by asserting that certain employees stole stock from her at the behest of the second defendant. I have rejected that assertion as baseless. In any event it does not explain the poor profitability of the business prior to mid-2007 the time nominated by the plaintiff as the start of the thefts.
The plaintiff denied that the lunch van business was competitive. The other evidence suggests the contrary. For example, Kelly Nelson who worked for competitor companies during the relevant periods swore an affidavit attesting to the competition following the Golden Chef auction and subsequently when news of the plaintiff’s difficulties with suppliers became known in the industry.[75]
[75] Exhibit D11
The plaintiff’s approach to the decline in her profits was to overstock her vans. It is clear from her evidence and that of her mother that this resulted in considerable wastage of stock. The results of this were to cause an even sharper decline in profitability as indicated by both accountants.
A valuation was prepared by Mason Gray Strange dated 15 January 2008 which valued the assets of Cruizen Café as $202,000[76]. The valuation report is stated to be prepared “Under instructions from Westpac for the account of Mr Con Mihailopoulos”. In cross-examination the plaintiff suggested that she arranged this valuation because she needed to know what the vans were worth as part of her marriage break up. She was perplexed at the reference to Westpac. She made no comment about the reference to Mr Mihailopoulos.[77] In re-examination she was asked about Mr Mihailopoulos and whether he was one of the people who bought her business. She said that he was not but that he had the report prepared when he was interested in purchasing Cruizen Café.[78]
[76] Exhibit P1- p114-117
[77] [T] p92-93
[78] [T] p127-128
The plaintiff’s mother Mrs Crook gave evidence about the subject of the financial issues in the plaintiff’s business. She said that after the defendants left the warehouse her daughter did all she could to keep her business going but eventually reached breaking point both physically and mentally. She then gave evidence as follows:[79]
[79] [T[ p232 line 11-18
QIn terms of the business what did your daughter then do. You say she realised there was no point in carrying on, was there then some plan in relation to the future of the business.
AThere was a man, a Greek man and his partner, called Con and they had what she called the red vans and he had made her an offer in ’07 to buy her vans. He sent out a Valuer and valued all the vans and everything that was to do with the business and he offered her 200,000 for the value of all her equipment and vans and 100,000 for goodwill. My husband was there and myself with the negotiation. She was very much prepared to sell to Con.
QDo you recall whether the negotiations got to the point of talking about a sale price for the business.
AYes, I asked – Pitcher Partners was recommended to me that we negotiate with Con, 200,000 for equipment and vans and 100,000 for goodwill. 300,000 he offered her and we were about to sell to him at the end of ’07.
QThat did not occur.
ANo, when Pitcher Partners made arrangements to see him, his wife told them he wasn’t very well. I don’t know whether he was diagnosed with cancer or a heart attack, I think it was heart attack. Tarnya went to the hospital to see him because he was a friend.
QYou said he was in the lunch van business.
AYes, she had what you call the red vans. I never saw them, I don’t know anything about them.
QThe sale didn’t proceed.
Mrs Crook’s evidence suggests that the offer from Mr Mihailopoulos was made in late 2007. Given the date of the valuation and the fact that the business was sold to others in mid-2008 it seems unlikely that Mrs Crook is mistaken about that timing. I further note that the affidavit of Mr Myers[80] deposes to a conversation with the plaintiff in late 2007 in which he was informed that she had a buyer for the business. This timing, and that of the valuation, does not sit very comfortably with the contention that the difficulties in the plaintiff’s business and the need to sell the business were the consequence of the second defendants’ statements. It seems likely on this evidence that the plaintiff was contemplating selling the business before the defendants’ departure from her warehouse.
[80] Exhibit D15
In any event, it seems clear from the evidence of both accountants that they concur that Cruizen café was not profitable prior to any misrepresentation by the second defendant. Mr Jeffreson who was called by the plaintiff conceded in cross examination that the business was not profitable prior to November 2007 and that the portion of his report that suggested that it was is incorrectly worded. In effect he agreed that the better way of expressing the position was to say that it was potentially profitable.[81] I infer from the balance of his evidence that the business was potentially profitable in the hands of a person who was better able to manage it than the plaintiff.
[81] [T] p179 - 182
The key difference between the accountants was the basis on which the Cruizen Café business ought to be valued in these circumstances. Mr Jeffreson considered that the future maintainable earnings method was the appropriate model to use in this matter. This method capitalises expected future earnings. Mr Jorgenson considered that the more appropriate method to value Cruizen Café was to value its net tangible assets because the records of the business did not demonstrate any maintainable earnings.
I prefer the evidence of Mr Jorgenson that the future maintainable earnings method is not the appropriate manner in which to value a business which is suffering losses. In my view, no rational buyer would pay a premium on the basis of the future earnings of a business when the past earnings of the business were so poor. It seems from Mr Jeffreson’s report that this method is most commonly used to value successful businesses with an assumed indefinite longevity. Cruizen Café did not fit that description.
As things ultimately transpired the plaintiff sold Cruizen Café in mid-2008 for a figure which effectively represented the net tangible assets of the business. The purchase price was $200,001 on a “walk in – walk out basis” and the settlement date was 22 August 2008. This purchase price is $1999 short of the January valuation of the net tangible assets. The business was sold on the open market and the contract was entered into at arm’s length following negotiations. The contract included vendor finance for the full purchase price and the plaintiff says that she never received any payment because the purchaser went into liquidation. Given the method of valuation indicated by Mr Jorgenson, the January 2008 valuation of the net tangible assets and the ultimate sale price in mid- 2008 I do not consider that the plaintiff has established any loss arising from the sale of her business.
I consider it more likely than not that the financial issues within the plaintiff’s business predated the statements by the second defendant and were the result of a number of factors including:
·the plaintiff’s inadequate financial management of the business as
evidenced by matters such as her lack of proper records, inability to explain her pricing structures, profit margins and business plan and her approach to combating the competition from the defendant in 2008 which lead to increased losses,
·competition within the lunch van industry; and
·the substantial increase in the plaintiff’s business overheads following
the Golden Chef Auction.
I find that the plaintiff has not established any economic loss flowing from the misrepresentations and defamatory statements by the second defendant.
Non-Economic Loss
Generally speaking the purpose of awarding damages for defamation is to console for personal distress and hurt, reparation for harm done to a business reputation and vindication of that reputation.[82] The three people whose evidence I have accepted in relation to the publication of defamatory statements have indicated that they did not believe the defamatory statements. This does not however dispose of the matter.
The hurt and anxiety caused to a person in such circumstances will obviously not be eliminated by such statements of disbelief: the person may still suffer very considerable anger and upset. Further, it is usually impossible to ever know just what was really thought, consciously or subconsciously, about the defamatory statement, irrespective of disclaimers of belief being made. And, of course, it is also impossible to ever be sure that the statement will not leak and spread beyond the original group.[83]
[82] Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44.
[83] Cornes v Ten Group Pty Ltd op cit at para 10
I am prepared to draw the inference that the defamatory statements I have found that the second defendant made spread beyond the three people who have given evidence. In the case of Mr Barnes and Mr Sutton I infer that the statement was made to a group of people and not just to them. This is not however a case of widespread publication such as when defamatory comments are published in the media or on social media. Likewise the statements were verbal and, to that extent, ephemeral. Where publication is limited to a few people, the award of damages will be modest.[84]
[84] Morgan v Odhams Press Ltd. [1971] 1WLR 1239
I accept that the statements had the tendency to “bring the plaintiff into odium and contempt with her customers” as asserted in paragraph 17 of the amended statement of claim. It is a serious matter to allege that a person responsible for the production of food does so in an unhygienic manner. The law places a high value upon reputation particularly as it relates to a person’s work.[85]
[85] John Fairfax Publications Pty Ltd v. O’Shane (No 2) [2005] NSWCA 291
Section 32 of the Defamation Act (2005) provides that the amount of damages to be awarded requires an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded. Non economic loss is capped at a maximum amount of $339,000[86] in accordance with s 33(1) of the Defamation Act, subject to the operation of s 33(2) of the Act.
[86] SA Govt Gazette 15 June 2012.
The case law suggests that some guidance is to be obtained from awards of damages in personal injury cases although there are difficulties with this as observed by the High Court in Rogers v Nationwide News Pty Ltd[87].
The injury done by defamation, even if serious, is often evanescent. By contrast some personal injuries are permanent and devastatingly disabling. One of the principal purposes of an award of damages for defamation is to vindicate the wrong that was done. By contrast, damages for personal injury can compensate but cannot right the wrong that was done. Yet, in neither defamation nor in personal injuries is there any measure by which the compensation for the non-pecuniary loss which the particular plaintiff has suffered can be assessed except what is”reasonable”.[88]
[87] (2003) 216 CLR 327
[88] Hayne J at para 75

The principal harm nominated by the plaintiff in the pleadings, the evidence and submissions was the loss of her business. As indicated above I am not satisfied on the evidence that the statements caused the loss of the business. The plaintiff, her mother and her husband have given evidence about the emotional distress she suffered following the defendants’ departure from her warehouse. Again this appears principally related to the decline and loss of the Cruizen Café business rather than the second defendant’s defamatory statements per se. The onus is on the plaintiff to prove that the alleged distress has been caused by the defamatory comments.[89] In view of the seriousness of the defamatory comments I am prepared to accept that there was some distress caused to the plaintiff.
[89] C v L & Others [2005] SASC 315
The evidence on the topic of the plaintiff’s reputation is limited. The legal principle is that some damage to reputation is presumed to flow from defamatory material. The extent of the damage presumed to flow will depend on the circumstances of the case.[90] In addition to this presumption, the plaintiff may lead evidence of loss of reputation to increase the sum awarded. No such evidence was led.
[90] Coyne v Citizen Finance Ltd (1991) 172 CLR 211 per Mason CJ and Deane J at 216.
I do not find the facts of the matter sufficient to justify an award of aggravated damages.[91] The Act prohibits the awarding of exemplary or punitive damages.[92]
[91] Ibid s 33(1) and (2).
[92] Ibid s.35.
The malice shown by the second defendant at the time of publishing is relevant to the quantum of damages to be awarded.[93] The intent with which the statements were published is relevant only in so far as it affects the central consideration of the amount of harm suffered by the plaintiff. I have taken these matters into account in my assessment of the plaintiff’s claim for damages. In this context I take into account that the plaintiff’s behaviour has not been all it should. She has made, as I have found, serious and unfounded allegations against a number of people including the second defendant. She sent, as I have found, a threatening SMS message to the second defendant on 20 January 2008.
[93] Ibid s.34.
Doing the best I can I assess the plaintiff’s damages for defamation in the sum of $4000 inclusive of interest. The statements were made by the second defendant. I see no basis upon which the first defendant is vicariously liable for the statements of the second defendant.
Conclusion
For the reasons set out above there will be judgment for the plaintiff the sum of $4000 inclusive of interest against the second defendant for defamation but I otherwise dismiss her claim against the first and second defendants. I will hear the parties as to the question of costs.