Cheng v Lok - [2020] SASC 14

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CHENG v LOK
[2020] SASC 14
Judgment of Judge Bochner a Master of the Supreme Court
6 February 2020
DEFAMATION - DAMAGES - GENERAL DAMAGES - ASSESSMENT
Default judgment entered against defendant - assessment of damages.
Defamation Act 2005 (SA) s 38, referred to.
Duffy v Google Inc (No 2) [2015] SASC 206; Duffy v Google Inc (No 3) [2016] SASC 1, considered.

CHENG v LOK
[2020] SASC 14

The plaintiff has issued proceedings against the defendant alleging that she defamed him on a website by the name Google My Business on about 18 October 2018. This judgment deals with the assessment of damages following the entry of default judgment against the defendant.
Background
The plaintiff is a lawyer practising in Adelaide. He is Chinese by birth, and most of his clients come from the Chinese community in South Australia and overseas, in particular from Hong Kong and mainland China. He receives most of his referrals by word of mouth.
The plaintiff was originally admitted to legal practice in Hong Kong in 1982. He was first admitted to practice in Australia in the Australian Capital Territory in 1988, and in South Australia in 1992. He has also been admitted to practice in a number of other jurisdictions.
The plaintiff is a fellow of the Australian and New Zealand College of Notaries, a member of the Law Society of South Australia, a member of the Notaries Society of South Australia and a member of the Chartered Institute of Arbitrators. He has been the legal advisor of the Australian Chinese Medical Association since its inception in 1994. He has provided pro bono legal advice to members of the Chinese speaking community through the website, since 2012.
The plaintiff is a well respected member of the legal profession.
In late 2018 and early 2019, the plaintiff became aware that a large number of his clients had left his practice to instruct other lawyers. On 28 February 2019, he received a telephone call from a former client, Mr Fung, who advised him that the following review had been posted on Google My Business:
Re Gordon Cheng Barristers & Solicitors
of level 1/186 Pultney Street, Adelaide SA
Isabel Lok
Stay clear of this place! Gordon brings shame to all lawyers and is infamous for his lack of professionalism amongst the law society in Adelaide. He is only concerned about how to get most of your money by giving you false and misleading advices, and convincing you to go to court when it is clear that he doesn’t have a case to win.[1]
[1] FDN2 at [4].
The review was also published in Chinese.
Mr Fung had come across the review while surfing the internet.
The plaintiff says that, by February 2019, about 80% of his clients had left his practice.
After investigating the review, the plaintiff ascertained that it had been published by the defendant. I am satisfied that this is the case.
On 12 March…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Cheng v Lok

Details

AGLC: Cheng v Lok [2020] SASC 14
Case: [2020] SASC 14
Decision Date: 6 February 2020

CaseChat Overview and Summary

The case of Cheng v Lok involves a claim for defamation against the defendant, Isabel Lok, who posted a defamatory review about the plaintiff, Gordon Cheng, on Google My Business. Following the entry of default judgment against the defendant, the court was tasked with assessing the damages to be awarded to the plaintiff. The plaintiff, a lawyer, alleged that the defamatory review led to a significant loss of clients and income, impacting his professional reputation and financial standing. The court considered the evidence provided by the plaintiff's accountant, who conducted a detailed financial analysis to quantify the economic loss and loss of goodwill resulting from the defamatory publication.

The primary legal issues before the court were determining the appropriate amount of general damages, including aggravated damages, and assessing the economic loss to the plaintiff's legal practice due to the defamatory review. The court had to evaluate the impact of the review on the plaintiff's client base and income, and whether the damages claimed were reasonable and supported by the evidence. The court also needed to consider the credibility of the evidence provided by the plaintiff's expert witness regarding the financial analysis of the practice.

The court found that the evidence provided by the plaintiff's accountant was credible and reliable, and accepted that the defamatory review had a significant detrimental effect on the plaintiff's legal practice. The court determined that the average gross monthly income of the plaintiff's practice dropped substantially following the publication of the review, resulting in a net trading loss for the first four months after publication. Based on the financial analysis, the court concluded that the plaintiff had suffered an economic loss of approximately $190,000 for the six-month period following the review. In addition to the economic loss, the court awarded damages for aggravated damages, bringing the total damages to $750,000. The court also ordered the defendant to pay the plaintiff's costs of the action on an indemnity basis.

In summary, the court found that the plaintiff was entitled to damages of $750,000, including $500,000 for economic loss and $200,000 for aggravated damages. The defendant was ordered to pay the plaintiff's costs of the action on an indemnity basis, to be agreed or taxed.

Orders

Orders of the court

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Background

Background to the litigation

The plaintiff has issued proceedings against the defendant alleging that she defamed him on a website by the name Google My Business on about 18 October 2018. This judgment deals with the assessment of damages following the entry of default judgment against the defendant.Background The plaintiff is a lawyer practising in Adelaide. He is Chinese by birth, and most of his clients come from the Chinese community in South Australia and overseas, in particular from Hong Kong and mainland China. He receives most of his referrals by word of mouth. The plaintiff was originally admitted to legal practice in Hong Kong in 1982. He was first admitted to practice in Australia in the Australian Capital Territory in 1988, and in South Australia in 1992. He has also been admitted to practice in a number of other jurisdictions. The plaintiff is a fellow of the Australian and New Zealand College of Notaries, a member of the Law Society of South Australia, a member of the Notaries Society of South Australia and a member of the Chartered Institute of Arbitrators. He has been the legal advisor of the Australian Chinese Medical Association since its inception in 1994. He has provided pro bono legal advice to members of the Chinese speaking community through the website, since 2012. The plaintiff is a well respected member of the legal profession. In late 2018 and early 2019, the plaintiff became aware that a large number of his clients had left his practice to instruct other lawyers. On 28 February 2019, he received a telephone call from a former client, Mr Fung, who advised him that the following review had been posted on Google My Business:Re Gordon Cheng Barristers & Solicitorsof level 1/186 Pultney Street, Adelaide SAIsabel LokStay clear of this place! Gordon brings shame to all lawyers and is infamous for his lack of professionalism amongst the law society in Adelaide. He is only concerned about how to get most of your money by giving you false and misleading advices, and convincing you to go to court when it is clear that he doesn’t have a case to win.[1][1] FDN2 at [4]. The review was also published in Chinese. Mr Fung had come across the review while surfing the internet. The plaintiff says that, by February 2019, about 80% of his clients had left his practice. After investigating the review, the plaintiff ascertained that it had been published by the defendant. I am satisfied that this is the case. On 12 March 2019, the plaintiff issued a concerns notice, and lodged a complaint with Google. The defendant’s response, on 14 March 2019, was to change her name on the review from “Isabel Lok” to “Bel”. The plaintiff then served the summons and statement of claim in this matter on the defendant on 24 April 2019, following which she changed her name on the review from “Bel” to “Cindy”. The review remained posted on Google My Business. To control the damage to his practice, the plaintiff posted the concerns notice and the summons and statement of claim on the website. He also lodged a further complaint with Google on 24 April 2019. The review was finally deleted on 30 April 2019.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The plaintiff is entitled to costs on an indemnity basis.Conclusion1The plaintiff is entitled to damages in the sum of $750,000.2The defendant is to pay the plaintiff’s costs of the action on an indemnity basis, such costs to be agreed or taxed.

Ratio Decidendi

Legal Principle Established

The defendant seeks the sum of $200,000 for general damages, including aggravated damages.ConsiderationEconomic Loss The evidence of Ms Phu was unchallenged. Ms Phu graduated from the University of South Australia in 1990 with a Bachelor of Accounting. She worked as an employed accountant for a number of years and started her own practice on 1 July 1995. She has been the accountant for the plaintiff’s legal practice since 1999. For the purpose of her report, Ms Phu reviewed the financial records of the business for the financial years 1 July 2016 to 30 June 2017, 1 July 2017 to 30 June 2018 and 1 July 2018 to 30 June 2019. I note that the business has no overdraft banking facilities, does not keep a trust account and at the time of the report was debt free. For analysing the effect of the publication on the business, Ms Phu used 1 November 2018 as the demarcation date, on the basis that it would have taken about two weeks after the publication for it to affect the business. Ms Phu adopted the Australian Tax Office guidelines for tax audit, by taking the immediate past two financial years as representative figures for comparison. She based her assessment on cashflow valuation rather than asset valuation. In taking this approach, she references a number of reputable sources as evidence of its appropriateness. I accept that Ms Phu has used an appropriate method of valuation for determining both the economic loss to the business and the loss of good will. Using this method, Ms Phu determined that the average gross monthly income for the business, for the eight month period immediately before the publication of the review was $57,684.02. She used the figure of $57,000 as the benchmark for comparison. For the first four months immediately after the publication, the gross average monthly income of the practice fell to $7,286.50. For the second period of four months after publication, the gross average monthly income was $9.388.31. During this period, the practice suffered a net trading loss of ‑$71,687.96. In the four month period immediately preceding publication, the business made a net pre-tax profit of $193,801. In the four month period immediately after publication, the business made a net trading loss of -$60,618. This equates to a loss of average monthly gross income of -$51,000 as a result of the publication. Ms Phu noted that after the plaintiff posted the concerns notice, and the summons and statement of claim on Google My Business, the monthly turnover of the business improved. For the period 1 November 2018 to 31 July 2019, the business made a net trading loss of -$136,000, the first time in Ms Phu’s experience that the business has made a loss. Ms Phu has calculated the loss to the practice for the next six month period to be $190,000. This is based on the assumption that the income of the practice would improve as the period of time since the publication increased. She used the actual revenue generated in July 2019 to project the increased profitability of the business over the next six months. On this basis, she has determined that the loss for the six month period to January 2020 would be $190,000.