CJZ Pty Ltd v Giant Dwarf Pty Ltd; CJZ Pty Ltd v Morrow

[2023] NSWCA 135

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

CJZ Pty Ltd v Giant Dwarf Pty Ltd; CJZ Pty Ltd v Morrow [2023] NSWCA 135

Hearing dates:

22—24 May 2023

Decision date:

20 June 2023

Before:

Ward P at [1]; Mitchelmore JA at [2]; Adamson JA at [3]

Decision:

Proceedings 2022/214060

(1)   Dismiss the cross-appeal.

(2)   Grant leave to the applicants to appeal in respect of costs.

(3)   Set aside orders (7) and (8) made by Stevenson J on 23 June 2022 in proceedings 2019/343896 and in lieu thereof make the following order:

Order the second and third plaintiffs to pay the first and second defendants’ costs of the proceedings (including the amended summons and amended cross summons) on an indemnity basis.

(4)   Subject to (5), order the respondents to pay the applicants’/appellants’ costs of the appeal.

(5)   If any application is to be made for a different order for the costs of the appeal, direct that the party send by email a notice of motion, together with any evidence and submissions in support, to the Associate to the Presiding Judge within 14 days hereof.

Proceedings 2022/214083

(1)   Grant leave to appeal on grounds 1, 2, 4, 6, 7, 8, 9 and 10 but otherwise refuse leave to appeal.

(2)   Allow the appeal.

(3)   Set aside orders (1), (2), (3) and (4) made by Stevenson J on 23 June 2022 in proceedings 2020/264993 and in lieu thereof make the following orders:

(a)   Judgment for the defendants.

(b)   Subject to (c) below, order the plaintiff to pay the defendants’ costs of the proceedings.

(c)   If any application is to be made for a different order for the costs of the Defamation proceedings, direct that the party send by email a notice of motion, together with any evidence and submissions in support, to the Associate to the Presiding Judge within 14 days hereof.

(4)   Subject to (5), order the respondents to pay the applicants’/appellants’ costs of the appeal.

(5)   If any application is to be made for a different order for the costs of the appeal, direct that the party send by email a notice of motion, together with any evidence and submissions in support, to the Associate to the Presiding Judge within 14 days hereof.

(6)   Release the second defendant from the undertaking given by him on his own behalf and on behalf of the first defendant, the making of which was noted by the primary judge in (3) of the orders and notations made on 23 June 2022.

Catchwords:

MISLEADING AND DECEPTIVE CONDUCT — cross-appeal — whether joint venturer engaged in misleading or deceptive conduct by failing to disclose negotiations for production of further series of television program, The Checkout — whether reasonable expectation of disclosure — whether execution of Share Sale Agreement induced by misleading or deceptive conduct — whether rescission of Share Sale Agreement an appropriate remedy

COSTS — application for leave to appeal — Calderbank offers — whether primary judge erred in not awarding costs on indemnity basis — whether respondents would have been in a better position if they had accepted offer — circumstances in which costs discretion re-exercised on appeal

DEFAMATION — application for leave to appeal — whether primary judge erred in application of test for defence of qualified privilege — whether express malice established

Legislation Cited:

Australian Consumer Law (Sch 2, Competition and Consumer Act 2010 (Cth)) s 237

Civil Procedure Act 2005 (NSW), s 98

Corporations Act 2001 (Cth), s 461(1)(k)

Defamation Act 2005 (NSW)

Evidence Act 1995 (NSW), ss 64(3), 69, 136

Parliamentary Privileges Act 1987 (Cth), s 16

Supreme Court Act 1970 (NSW), s 75A

Cases Cited:

Abalos v Australian Postal Commission (1990) 171 CLR 167; [1990] HCA 47

Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5

Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

Campomar Sociedad, Ltd v Nike International Ltd (2000) 202 CLR 45; [2000] HCA 12

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24

Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Godfrey v Henderson (1944) 44 SR (NSW) 447

Horrocks v Lowe [1975] AC 135

House v The King (1936) 55 CLR 499; [1936] HCA 40

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden (2020) 101 NSWLR 729; [2020] NSWCA 28

Marks v GIO Australia Holdings Limited (1998) 196 CLR 494; [1998] HCA 69

Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468; [2022] NSWCA 150

Onassis v Vergottis [1968] 2 Lloyds Rep 403

Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69

Papaconstuntinos v Holmes a Court (2012) 249 CLR 534; [2012] HCA 53

Ratcliffe v Evans [1892] 2 QB 524

Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57

SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323

TCN Channel Nine Pty Ltd v Anning (2002) 54 NSWLR 333; [2002] NSWCA 82

Telegraph Newspaper Co Ltd v Bedford (1934) 50 CLR 632; [1934] HCA 15

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 13) [2022] NSWSC 444.

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 14) [2022] NSWSC 835

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 14) [2022] NSWSC 835

Universal Cargo Carriers Corp. v Citati [1957] 2 QB 401

Watson v Foxman (1995) 49 NSWLR 315

Wentworth v Rogers (No 3) (1986) 6 NSWLR 642

Wraydeh v Fairfax Media Publication Pty Limited; Wraydeh v Nationwide News Pty Ltd (2021) 105 NSWLR 254; [2021] NSWCA 153

Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65

Category:

Principal judgment

Parties:

Proceedings 2022/214060
CJZ Pty Ltd (First Applicant / First Cross-Respondent)
Nicholas Harvey Murray (Second Applicant / Second Cross-Respondent)
Giant Dwarf Pty Ltd (First Respondent / Second Cross-Appellant)
Julian Francis Xavier Morrow (Second Respondent / Third Cross-Appellant)
The Checkout Pty Ltd (First Cross-Appellant)

Proceedings 2022/214083
CJZ Pty Ltd (First Applicant)
Nicholas Harvey Murray (Second Applicant)
Julian Francis Xavier Morrow (Respondent)

Representation:

Counsel:
Proceedings 2022/214060
B F Katekar SC / S Gaussen (Appellants / Cross-Respondents)
S Chrysanthou SC / C P O’Neill (Respondent / Cross-Appellants)

Proceedings 2022/214083
B F Katekar SC / M Lewis (Appellants)
S Chrysanthou SC / C P O’Neill (Respondent)

Solicitors:
Bird & Bird (Appellants / Cross-Respondents)
Kay & Hughes (Respondents / Cross-Appellants)

File Number(s):

2022/214060; 2022/214083

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity

Citation:

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 13) [2022] NSWSC 444

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 14) [2022] NSWSC 835

Date of Decision:

13 April 2022; 23 June 2022

Before:

Stevenson J

File Number(s):

2019/343896; 2020/264993

HEADNOTE

[This headnote is not to be read as part of the judgment]

This appeal arises out of a dispute relating to the production and broadcast of the ABC television program, The Checkout. CJZ Pty Ltd (CJZ) and its director Nicholas Murray sought leave to appeal, and The Checkout Pty Ltd, Giant Dwarf Pty Ltd (Giant Dwarf) and its director Julian Morrow cross-appealed, against orders made in two proceedings referred to as the commercial proceedings and the defamation proceedings, which were heard together.

In the commercial proceedings, The Checkout Pty Ltd, Giant Dwarf and Mr Morrow claimed damages alleging that CJZ had breached the Share Sale Agreement and that CJZ and Mr Murray had engaged in misleading and deceptive conduct and committed the tort of injurious falsehood against Mr Morrow. These claims were dismissed. CJZ cross-claimed seeking an order that the Share Sale Agreement be rescinded on the basis that it had been induced to execute it as a consequence of Mr Morrow’s misleading or deceptive conduct. On the cross-claim, the primary judge found that Giant Dwarf had breached the joint venture agreement and engaged in misleading or deceptive conduct, that Mr Morrow had breached his duty as a director of the joint venture company and engaged in misleading or deceptive conduct and that the Share Sale Agreement ought be rescinded.

In the defamation proceedings, Mr Morrow claimed damages against CJZ and Mr Murray in respect of statements Mr Murray had made orally and in writing to the ABC about Mr Morrow. CJZ and Mr Murray relied on defences of justification, qualified privilege and honest opinion. Mr Morrow alleged express malice to defeat the defence of qualified privilege. The primary judge found that each of the matters complained of was defamatory and that only the defence of justification was made out in respect of two matters complained of. His Honour entered judgment for Mr Morrow and ordered CJZ and Mr Murray to pay general damages of $30,000 and aggravated damages of $5000 with interest, and Mr Morrow’s costs of the proceedings.

CJZ and Mr Murray sought leave to appeal against the orders made in the defamation proceedings, on the basis that the primary judge erred in determination of the defence of qualified privilege, and the costs orders made against them in the commercial proceedings, submitting that they were entitled to indemnity costs on the basis of three Calderbank offers. Giant Dwarf and Mr Morrow cross-appealed on the grounds that the primary judge erred in ordering recission of the Share Sale Agreement, because it proceeded upon erroneously finding the conduct of Giant Dwarf and Mr Morrow was misleading or deceptive, that Mr Morrow breached his duties as a director of the joint venture company and that there was an implied term of the joint venture agreement. The cross-appellants also filed a notice of motion for leave to adduce further evidence comprising emails sent by Mr Murray in March 2023.

The Court held (Adamson JA, Ward P and Mitchelmore JA agreeing), dismissing the cross-appeal and allowing the applicants’ appeals:

Commercial proceedings

Dismissing the cross-appeal

Misleading or deceptive conduct

1. The primary judge was correct to find that Mr Morrow implicitly represented that his sole representation in wanting the Share Sale Agreement executed was to obtain access to the PDV rebate, and that his failure to disclose his negotiations with the ABC constituted misleading or deceptive conduct: [119], [121], [134].

2. The effect of the order for rescission of the Share Sale Agreement was to deprive Mr Morrow and Giant Dwarf of the fruits of their misleading and deceptive conduct and to put the parties in the same position as if the wrongful conduct had not occurred: [142]. In circumstances where the primary judge had power to make an order for rescission and neither the injured parties nor the wrongdoer has proposed any other viable substantive relief, an order for recission is appropriate: [143].

Marks v GIO Australia Holdings Limited (1998) 196 CLR 494; [1998] HCA 69 at [41] (McHugh, Hayne and Callinan JJ), applied.

1. It is not necessary to decide whether the primary judge erred in finding an implied term as this was not a claim in contract for breach of an implied term and the reasonable expectation of disclosure was otherwise established: [131]-[133].

Damages for injurious falsehood

1. The cross-appellants were required to prove that the alleged injurious falsehoods were a substantial factor in causing them economic loss: [307]. The primary judge correctly found that Mr Morrow was the operative cause of the cross-appellants’ loss. It was therefore not necessary to address the other grounds of the cross-appeal against the dismissal of the claim for injurious falsehood: [310].

Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69, distinguished.

In relation to costs (application for leave to appeal)

1. Leave to appeal against the costs order ought to be granted because the primary judge’s discretion miscarried and his Honour relevantly mistook the facts: [330]-[331].

Wentworth v Rogers (No 3) (1986) 6 NSWLR 642; House v The King (1936) 55 CLR 499; [1936] HCA 40, applied.

1. CJZ and Mr Murray’s letter of 19 June 2019 (via their solicitor) provided a detailed explanation as to why the claims against them would fail, which was vindicated by the primary judge’s findings. Had Giant Dwarf accepted CJZ’s subsequent offer of 1 November 2019, it would have been in a better position. On this basis, Giant Dwarf and Mr Morrow ought pay the applicant’s costs of the commercial proceedings on an indemnity basis: [338]-[340].

Defamation proceedings

1. The primary judge erred in his application of the test for qualified privilege which was whether the communication was published on a privileged occasion and was relevant to the occasion: [250].

Horrocks v Lowe [1975] AC 135 at 149; Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57 at [75] (Gaudron, McHugh and Gummow JJ); Wraydeh v Fairfax Media Publication Pty Limited; Wraydeh v Nationwide News Pty Ltd (2021) 105 NSWLR 254; [2021] NSWCA 153 at [44] (Simpson AJA, Bell P and Gleeson JA agreeing); Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5 at [9]-[10] (Gleeson CJ, Hayne and Heydon JJ).

1. The common law defence of qualified privilege is defeated by “express malice” if the dominant purpose of the communication was an improper purpose foreign to the privileged occasion: [251]. Express malice for the purposes of defeating qualified privilege is a different concept from malice for the purpose of aggravated damages: [259].

2. Mr Murray established the defence of qualified privilege in respect of each of MCOs 3, 4, 5 and 6. Mr Morrow did not discharge his onus of proving express malice: [290].

Cross-appellants’ Notice of Motion (leave to adduce further evidence)

1. As Mr Murray and CJZ have been successful in their appeal against the orders made in the defamation proceedings, there is no basis on which the Court could order injunctive relief instead of the undertaking. The notice of motion therefore ought to be dismissed: [341]-[342]. Mr Murray ought be released from his undertaking.

JUDGMENT

1. WARD P: I have had the advantage of reading in draft the comprehensive reasons of Adamson JA, with which I agree. I also agree with the orders that her Honour proposes.

2. MITCHELMORE JA: I agree with the reasons of and orders proposed by Adamson JA.

3. ADAMSON JA: Before the Court there are two applications for leave to appeal and a cross-appeal. They arise from a dispute relating to the production and broadcast of The Checkout, a television program, between, on the one hand, CJZ Pty Ltd (CJZ), formerly known as Cordell Jigsaw Productions, the first applicant, and its director, Nicholas Murray, the second applicant, and, on the other, The Checkout Pty Ltd (the Joint Venture Company), the first cross appellant, Giant Dwarf Pty Ltd (Giant Dwarf), the second cross appellant, and Julian Morrow, the third cross appellant. Each party challenges orders made by Stevenson J (the primary judge) on 23 June 2022 in two proceedings, the Commercial proceedings and the Defamation proceedings (defined below) which were heard together in the Equity Division of the Supreme Court.

The Commercial proceedings

The claim by The Checkout Pty Ltd, Giant Dwarf Pty Ltd and Mr Morrow

4. On 1 November 2019, the Joint Venture Company, Giant Dwarf and Mr Morrow commenced proceedings in the Commercial List in the Equity Division against CJZ and Mr Murray (the Commercial proceedings). They claimed declarations, injunctions and damages, alleging that:

1. CJZ had breached an agreement made on 8 April 2019 (the Share Sale Agreement), including by repudiatory conduct, thereby entitling them to terminate the agreement;

2. CJZ and Mr Murray had engaged in misleading and deceptive conduct prior to the execution of the Share Sale Agreement; and

3. CJZ and Mr Murray had committed the tort of injurious falsehood by making injurious statements about Mr Morrow to the Australian Broadcasting Corporation (ABC).

The cross claim by CJZ

5. CJZ cross-claimed against the Joint Venture Company, Giant Dwarf and Mr Morrow seeking an order that the Share Sale Agreement be rescinded on the basis of misleading or deceptive conduct, as well as damages and equitable compensation.

The Defamation proceedings

6. On 11 September 2020, Mr Morrow commenced proceedings in the Common Law Division against CJZ and Mr Murray, seeking damages for defamation (the Defamation proceedings). The amended statement of claim filed on 12 February 2021 alleged the publication of six matters complained of (MCOs), which were alleged to be defamatory. CJZ and Mr Murray relied on defences of justification, qualified privilege (statutory and common law) and honest opinion. In his reply, Mr Morrow alleged express malice (including improper motive and knowledge of falsity) to defeat the defence of qualified privilege.

The procedural background and the orders made

7. On 4 February 2021, the primary judge ordered that the Commercial proceedings and the Defamation proceedings be heard together. On 29 November 2021, the primary judge ordered that evidence in one proceedings be evidence in the other proceedings. The hearing commenced on 30 November 2021 and continued on 1, 2, 3, 7, 8, 20, 21 and 22 December 2021. Judgment was reserved.

8. Ms Chrysanthou SC appeared with Mr O’Neill at first instance and on appeal for Mr Morrow, Giant Dwarf and the Joint Venture Company (together, the cross-appellants). Mr Katekar SC appeared at first instance with Ms Jeliba and on appeal with Mr Lewis (on the application for leave to appeal against the orders in the Defamation proceedings) and Ms Gaussen (on all other matters).

9. On 13 April 2022, the primary judge published his reasons for decision and directed the parties to confer on the orders necessary to give effect to the reasons: The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 13) [2022] NSWSC 444.

10. On 16 June 2022, the primary judge heard argument on costs. CJZ and Mr Murray sought costs in the Commercial proceedings on an indemnity basis on the basis that the claims made by the Joint Venture Company, Giant Dwarf and Mr Morrow were “hopeless”. They also sought costs of their cross-claim on the basis of Calderbank offers made on 18 October 2019 and 1 November 2019.

11. In the Defamation proceedings, Mr Murray submitted that there ought be no order as to costs.

12. On 23 June 2022, the primary judge made orders in each of the two proceedings, including as to costs: The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 14) [2022] NSWSC 835 (the Costs Judgment).

13. In the Commercial proceedings, Giant Dwarf made the following claims, each of which was rejected:

1. damages for breach of an implied term which required CJZ to sign the Quit Claim (to be explained below);

2. termination of the Share Sale Agreement based on CJZ’s alleged repudiatory conduct in refusing to sign the Quit Claim;

3. misleading and deceptive conduct premised on CJZ’s refusal to sign the Quit Claim;

4. damages for injurious falsehood (the primary judge found no loss); and

5. damages for breach of the mediation agreement (the primary judge found that Giant Dwarf suffered no harm).

14. Further, on Mr Murray and CJZ’s cross-claim, the primary judge found that:

1. Giant Dwarf had breached the joint venture agreement and engaged in misleading or deceptive conduct;

2. Mr Morrow had breached his duty as a director of the Joint Venture Company and to CJZ (as shareholder of the Joint Venture Company) and engaged in misleading or deceptive conduct; and

1. the Share Sale Agreement ought be rescinded.

15. In the Commercial proceedings, the primary judge dismissed the amended summons and, on the cross-claim, ordered that the Share Sale Agreement be rescinded and that Giant Dwarf transfer to CJZ with effect from 8 April 2019 the shares in the Joint Venture Company that CJZ transferred to Giant Dwarf pursuant to the Share Sale Agreement and cause Mr Murray to be reinstated as a director of the Joint Venture Company. The primary judge also made orders requiring Giant Dwarf to pay to CJZ 40% of the Postal, Digital and Visual Offset tax rebate (the PDV rebate) for the first four series of The Checkout, together with interest.

16. In the Defamation proceedings, the primary judge found that, of the six MCOs made respectively on 21 May 2019 (MCO 1), 11 June 2019 (MCO 2), 12 June 2019 (MCO 3), 20 June 2019 (MCO 4), 5 July 2019 (MCO 5) and 12 August 2019 (MCO 6), each was defamatory; the defences of qualified privilege (common law or statutory) or honest opinion were not made out in respect of any of them; and the defence of justification was made out in respect of MCO 1 and 2, but not in respect of the other MCOs. His Honour entered judgment for Mr Morrow and ordered CJZ and Mr Murray to pay general damages of $30,000 and aggravated damages of $5,000, together with interest. His Honour also ordered CJZ and Mr Murray to pay Mr Morrow’s costs of the proceedings.

The proceedings in this Court

17. The matters before this Court comprise:

1. the cross-appeal brought by the cross-appellants against the substantive orders made by the primary judge in the Commercial proceedings on the claim and the cross-claim. (There is no cross-appeal against the orders made in the Defamation proceedings.);

2. CJZ’s and Mr Murray’s application for leave to appeal against the orders made in the Defamation proceedings;

3. CJZ’s and Mr Murray’s application for leave to appeal against the costs orders made against them by the primary judge in the Commercial proceedings; and

4. the cross-appellants’ notice of motion filed on 11 May 2023 for leave to adduce further evidence comprising emails from Mr Murray sent between 9 March 2023 and 24 March 2023.

18. The applications in (2) and (3) above are relatively self-contained. However, the cross-appeal (1) is significantly broader. Grounds 1-6 and 7A of the cross-appeal concern the claim for damages for injurious falsehood and will be addressed separately in connection with that claim. In ground 7 the cross-appellants challenge 42 findings of fact made by the primary judge (some of which are addressed in the course of the summary of his Honour’s findings while others are addressed in a table at the conclusion of these reasons). None of these challenges has been made out, for the reasons given below. The remaining grounds of the cross-appeal, 8 and 9, challenge the orders made on Mr Murray and CJZ’s cross-claim and will be addressed first following the narrative of facts relating to the entry into the Share Sale Agreement on 8 April 2019.

19. Neither party sought, in the event that error was established, that this Court order a retrial or that any matter be remitted to the primary judge for determination. While the primary judge made some credit findings, the parties accepted that the primary judge’s advantage in this respect ought not inhibit this Court from making all necessary findings pursuant to s 75A of the Supreme Court Act 1970 (NSW). In these circumstances, this Court is obliged to determine for itself whether there is an error in any of the factual findings challenged and, if so, what facts ought to have been found. Similarly, if the error alleged is failure to address an argument, a claim or a defence, it is this Court’s task to address such argument, claim or defence for itself.

The facts

20. Before turning to the various matters for this Court’s determination, it is useful to summarise the facts as found by the primary judge. Because of the overlap between the facts and issues in the Commercial proceedings and the Defamation proceedings, the summary will contain facts which are germane to either or both. The references in square brackets are to paragraphs of the primary judge’s reasons.

21. In order to avoid repetition, it is convenient, in some instances, to address a number of the challenges made by Mr Morrow to the factual findings as part of the chronology of facts.

22. There is a clear division between the period up to and including the Share Sale Agreement and what occurred thereafter. The claim by Mr Murray and CJZ for rescission of that agreement arises from those facts from the earlier period. The events subsequent to the entry into the Share Sale Agreement form the basis of the claims against Mr Murray in the Defamation proceedings and for damages for injurious falsehood in the Commercial Proceedings; and the claim that Giant Dwarf and the Joint Venture Company were entitled to terminate the Share Sale Agreement on the basis of Mr Murray’s alleged repudiation of it.

23. In these circumstances, it is convenient to address the cross-appeal in so far as it challenges the order for rescission of the Share Sale Agreement before turning to the other challenges to the primary judge’s orders, which turn on what occurred afterwards.

The facts up to and including the Share Sale Agreement

The genesis of the joint venture

24. In about December 2010, Mr Morrow and Mr Murray met at Surry Hills to discuss the idea of their respective companies (Giant Dwarf and CJZ) working together on a consumer affairs television program ([47]). They envisaged that the revenue would be split 50/50, that Mr Morrow would host the program and that they would each be involved in executive production ([59]-[61]). It was common ground that the only broadcaster contemplated by the parties was the ABC.

25. In 2011, Mr Morrow and Mr Murray communicated about how this could best be achieved ([63]-[68]). Ultimately, on 23 January 2012, the Joint Venture Company was incorporated. Its directors were Mr Morrow and Mr Murray and Giant Dwarf and CJZ were its shareholders ([69]). It was common ground that all decisions relating to the joint venture were to be made by agreement ([96]). Thus, each shareholder had a power of veto ([101]).

The Checkout

26. In June 2012, the Joint Venture Company agreed with the ABC to make a series program, which became the first series of The Checkout ([70]). After the first series, Mr Morrow and Mr Murray agreed that the revenue would be split between them 60/40 (rather than 50/50 split as had originally been agreed) ([71]). Although Mr Morrow and Mr Murray discussed a shareholders’ agreement, no such agreement was ever executed ([73]-[87]).

27. It was common ground that the Joint Venture Company owned certain intellectual property rights to The Checkout.

28. The Joint Venture Company produced six series of The Checkout for the ABC. It was common ground that after the third series, Mr Morrow took control of all creative, legal, editorial and production issues which caused Mr Murray to withdraw from active involvement. Although Mr Murray had other projects with the ABC, Mr Morrow was the prime contact with the ABC for the Joint Venture Company with respect to The Checkout ([90)].

29. Production of series six of The Checkout was completed in April 2018 ([155]). Under the terms of the joint venture agreement referred to above, of the sum paid by the ABC to the Joint Venture Company, CJZ was paid a little over $1 million for the first six series of The Checkout ([94]). It was not disputed that Mr Morrow was disgruntled by the size of the payments which the joint venture agreement obliged the Joint Venture Company to make to CJZ. His attempt to buy out Mr Murray in 2015 was unsuccessful.

30. Because of the arrangement referred to above (and, in particular, the power of veto), the Joint Venture Company could only continue to produce The Checkout if both Mr Morrow (on behalf of Giant Dwarf) and Mr Murray (on behalf of CJZ) agreed to do so ([101]-[102]).

31. It was common ground that CJZ and Giant Dwarf were, other than in relation to the joint venture and the Joint Venture Company, competitors. As such, each would independently pitch ideas for programs to the ABC, without recourse to the other ([145]-[154]).

The ABC’s decision to put The Checkout “on hiatus” and Mr Morrow’s attempts to reinstate The Checkout

32. On 4 July 2018, Josie Mason-Campbell, then Head of Non-Scripted Production at the ABC, told Mr Morrow that the ABC was unlikely to be able to fund The Checkout in the 2018/2019 financial year ([158]). She separately informed Mr Murray of this on the same day ([159]). Mr Morrow communicated with David Anderson, the then Director of Entertainment & Specialist at the ABC with a view to saving The Checkout ([162]).

33. On 6 July 2018, the ABC announced that it was putting The Checkout “on hiatus”. In a tweet posted on that day, Mr Morrow was critical of the ABC. Mr Murray contacted him to chastise him about publicly criticising the ABC. This was the last occasion on which Mr Morrow and Mr Murray contacted each other until 13 February 2019 ([255]-[259]).

34. Mr Morrow continued to lobby the ABC with a view to persuading it to change its mind about putting The Checkout on hiatus ([166]-[201]).

35. On 25 September 2018, Mr Anderson (then the Acting Managing Director of the ABC) said in an ABC radio interview that the ABC would either reinstate The Checkout or produce another consumer affairs and advocacy program in the future ([205]). As the Joint Venture Company was the only entity which had the intellectual property rights to The Checkout, any further series of The Checkout would have to be produced by the Joint Venture Company (or an assignee or licensee of those rights) ([206]).

The Postal, Digital and Visual Effects Offset Determination

36. On 19 December 2018, the Australian Taxation Office issued a certificate confirming that the Joint Venture Company was entitled to a Postal, Digital and Visual Offset, which entitled it to a PDV rebate of 30%. This amounted to approximately $585,000, which was payable (and was paid) on 25 January 2019 ([209], [225]).

37. In an email to Jacqui Crouch (the accountant for the Joint Venture Company and Giant Dwarf), Mr Morrow suggested that this sum be divided between the shareholders of the Joint Venture Company (Giant Dwarf and CJZ) 60/40 ([229]-[231]).

Further discussions between Mr Morrow and the ABC regarding a consumer affairs program

38. There were further communications between Mr Morrow and the ABC about a consumer affairs program in late 2018 and early 2019. Because the ABC’s budget had been cut, there was a question about how much the ABC could afford to pay for such a program.

39. In his findings about what had occurred in particular discussions with the ABC, the primary judge referred to internal records of the ABC which had been produced on subpoena and which purported to record (sometimes by persons not present for such meetings) what had transpired in discussions between Mr Morrow and the ABC. No witness from the ABC was called by either party. The primary judge rejected an application that these records be admitted as business records and admitted them pursuant to s 136 of the Evidence Act 1995 (NSW) for non-hearsay purposes.

40. However, the primary judge had regard to such records in making findings about what was said in the exchanges between Mr Morrow and the ABC on the basis of Mr Morrow’s answers to questions in cross-examination regarding such records.

41. The primary judge found that Mr Morrow was communicating with the ABC about a “possible consumer show” on 19 and 20 December 2018 ([214]). His Honour did not accept Mr Morrow’s (tentative) recollection that The Checkout was not mentioned in his conversation with Michael Carrington (then Acting Head of Content Distribution at the ABC) on 20 December 2018 ([218]-[219]), given that Mr Morrow had told Mr Anderson on 19 September 2018 that “the ABC should want The Checkout” ([219]). The primary judge noted that the inference that The Checkout was mentioned in Mr Morrow’s conversation with Mr Carrington on 20 December 2018 was consistent with the email sent by Mr Carrington to Ms Mason-Campbell on that day, which referred to the call from Mr Morrow and referred to him and Mr Morrow having agreed to “pick up on the discussion to recommission [The Checkout] or potentially develop a new consumer show asap” (set out at [216]). The primary judge found that the reference in the email to “recommission” was “obviously a reference to recommissioning The Checkout.”

42. Ms Chrysanthou criticised the primary judge for having regard to the email from Mr Carrington to Ms Mason-Campbell on 20 December 2018 in which he, in effect, said that he and Mr Morrow had discussed recommissioning The Checkout. She contended that the primary judge had used the evidence for an (impermissible) hearsay purpose, contrary to his Honour’s ruling. I reject this submission: the fact that Mr Carrington raised the topic of recommissioning The Checkout with Ms Mason-Campbell on 20 December 2018 (a non-hearsay purpose) made it more likely that it had been the subject of discussion between Mr Carrington and Mr Morrow in their conversation earlier that day. Further, the primary judge did not make a finding that it had been raised because of what was said in the email. Rather, his Honour inferred from the objective probabilities (including Mr Morrow’s view expressed in September 2018) that it was in fact raised and considered that the terms of the communication in the email of 20 December 2018 were consistent with that inference. This process of reasoning did not breach his Honour’s ruling as to the limited use to which such communications could be put.

43. It is also noteworthy that the primary judge was careful, as the findings set out below indicate, to make clear that the finding of the misleading or deceptive conduct was based on the “genuine prospect”, which arose from 8 March 2019, of The Checkout being recommissioned and Mr Morrow’s failure to disclose that matter to Mr Murray ([470]). Thus, the findings about what happened in December 2018, while relevant to the background, were not ultimately dispositive.

44. Also of significance, the primary judge relied on Mr Morrow’s acceptance (in the passage of cross-examination extracted at [250]) that “it was pretty well known that [he thought] the ABC should be broadcasting The Checkout [and that he had] made this point to the ABC several times”, including on 13 February 2019 (when Mr Morrow had met with Mr Carrington and Richard Huddleston (then Supervising Executive Producer, Entertainment and Development at the ABC)) as his position “has been quite consistent”. The primary judge drew the inference that Mr Morrow had told them that he “still wanted to do The Checkout” ([251]). After this meeting, Mr Morrow was confused about the ABC’s intentions and considered that it had not yet decided what course would be taken ([253]).

45. Ms Chrysanthou was critical of the primary judge’s findings concerning the ABC, including those at [233], [244], [247] and [404], for the separate reason that the primary judge did not have regard to the significance of s 16 of the Parliamentary Privileges Act 1987 (Cth) (the PP Act). This matter will be addressed towards the conclusion of these reasons.

Exchanges between Mr Morrow and Mr Murray about the PDV rebate

46. Within minutes of the conclusion of this meeting on 13 February 2019, Mr Morrow sent Mr Murray a message to suggest talking about the PDV rebate ([255]). He made no mention of the discussions he had had with the ABC between 6 July 2018 and that day about reinstating The Checkout ([256]).

The meeting at the Duck Inn on 19 February 2019

47. As a result of this message, Mr Murray and Mr Morrow agreed to meet at the Duck Inn in Chippendale (the Duck Inn meeting).

Undisputed facts about the Duck Inn meeting

48. It was either common ground or not disputed that, at this meeting:

1. Mr Morrow told Mr Murray that he needed access to Giant Dwarf’s share of the PDV rebate to help repay Giant Dwarf’s loan regarding a Netflix show ([266]);

2. Mr Morrow raised the question of how the PDV rebate should be split ([266]);

3. Mr Murray suggested that Mr Morrow should speak to Simon Fraser, CJZ’s Chief Financial Officer (who will be referred to throughout by his full name to avoid confusion with Hamish Fraser, who became CJZ’s solicitor) about the best means to distribute the PDV rebate to Giant Dwarf and CJZ ([266]);

4. Mr Morrow suggested that it was time to “draw a line under” the joint venture, given the unlikely event of The Checkout ever returning ([267]);

5. Mr Morrow told Mr Murray that if it transpired that the ABC did want to broadcast a consumer affairs show, “it would make more sense” for Giant Dwarf to produce that show ([288]);

6. Mr Morrow told Mr Murray that “it would be better for everyone if we could find some way that The Checkout could be made again” ([289]); and

7. Mr Morrow made no mention of his discussions with the ABC about The Checkout or a further consumer affairs show, including the discussion which had occurred on 13 February 2019 referred to above ([268]).

49. The primary judge also found that it was likely that Mr Morrow had told Mr Murray on 19 February 2019 that he was not prepared to do another series of The Checkout under the current arrangements of the joint venture agreement between them (because Mr Murray was receiving 40% of the net revenue without having to perform work on the series) ([275]).

50. The basis for the primary judge’s finding, which Mr Morrow accepted to be correct, was that, on 22 February 2019, Mr Morrow, Simon Fraser, Ms Crouch and her assistant, Ms Chen, met to discuss the best means to distribute the PDV rebate, and that, at that meeting, Ms Chen noted that the “current agreement does not incentivise” Mr Morrow “to continue doing more” series of The Checkout ([275]).

51. The primary judge inferred that the “way” Mr Morrow was suggesting for The Checkout to be made again was for CJZ to sell its shares in the Joint Venture Company to Giant Dwarf ([291]). His Honour considered that this finding was corroborated by the eventual terms of the Share Sale Agreement (referred to below) ([292]).

Disputed facts and inferences about the Duck Inn meeting

52. The primary judge did not accept the reason Mr Morrow gave for not disclosing the discussions in (7) above to Mr Murray. Instead, his Honour found that it was more probable that Mr Morrow did not raise them because it would have been inconsistent with “drawing a line” under the joint venture to indicate that he was currently discussing the prospect of reinstating The Checkout with the ABC ([270]). It is significant that, while Mr Morrow’s motive for not raising his communications with the ABC was relevant to the primary judge’s assessment of his credit, it was not necessary to prove his intent in order to establish that his conduct was misleading or deceptive since the test is objective (although it can more easily be inferred that it was misleading or deceptive, if it was intended to mislead or deceive: Yorke v Lucas (1985) 158 CLR 661 at 666 (Mason ACJ, Wilson, Deane and Dawson JJ); [1985] HCA 65; Campomar Sociedad, Ltd v Nike International Ltd (2000) 202 CLR 45; [2000] HCA 12 at 63 (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ)).

53. Mr Murray said, in paragraph 149 of his affidavit of 4 June 2020, that at the Duck Inn meeting Mr Morrow had told him that he was finding “making TV so unpleasant … that [he] never want[ed] to work in TV again” and that he could “get by doing corporate speaking gigs”. Mr Murray’s evidence was that he regarded this comment as incompatible with Mr Morrow having discussions with the ABC about The Checkout or another consumer affairs show.

54. In response Mr Morrow deposed (in paragraph 216 of his affidavit of 14 December 2020):

“In reply to paragraph 149 of the Murray Affidavit, as at 19 February 2019 the ABC had not told me ‘that the ABC wanted a consumer affairs show’ or that it ‘wanted The Checkout again’. I did not say that I ‘did not want to work in television any more’.”

[Bold emphasis added.]

55. At first instance, Mr Morrow admitted that the statement in bold was not true. The primary judge found that the discussions between the ABC and Mr Morrow on 19 and 20 December 2018 and 13 February 2019 showed that the ABC was “open to the possibility of there being a further series of The Checkout, although no decision had yet been made about that” ([279]). The primary judge found that Mr Morrow’s evidence as to this matter was untrue to his knowledge ([281]).

56. The primary judge accepted Mr Murray’s evidence that Mr Morrow had said, at the Duck Inn meeting, that he never wanted to work in TV again. His Honour did so on the basis of Mr Murray’s evidence (including his demeanour in the witness box), finding that he was “very confident that his recollection was correct” ([283]). His Honour also took into account the contents of an email sent by Mr Murray to Michael Easton (Mr Morrow and Giant Dwarf’s then solicitor) on 13 June 2019, in which Mr Murray said, in part:

“At the initial meeting Julian said that making TV was so unpleasant that he never wanted to work in TV again and would be happy to get by doing corporate speaking.”

57. The primary judge found this email to be “a reasonably contemporaneous confirmation of the correctness of Mr Murray’s recollection about what Mr Morrow said about this” ([285]). The primary judge also took into account Mr Morrow’s false evidence in the paragraph of his affidavit extracted above and found that, for Mr Morrow to say that he never wanted to work in television again, “cannot have reflected his true state of mind” ([287]).

58. Ms Chrysanthou contended that the primary judge’s finding that Mr Morrow had said at that meeting that he would not work in television again was erroneous. She argued that the email sent on 13 June 2019 could not be regarded as “reasonably contemporaneous” and that it was, in effect, glaringly improbable that Mr Morrow would have said any such thing.

59. I consider that it was open to the primary judge to make the finding at [287] that Mr Morrow had said that he never wanted to work in TV again. The assessment of credibility at first instance involves a number of factors, which include consistency of the statement with other statements and with the surrounding circumstances, motive and any corroboration which may be available: see generally Onassis v Vergottis [1968] 2 Lloyds Rep 403 at 431 (Pearce LJ); Watson v Foxman (1995) 49 NSWLR 315 at 318-319 (McLelland CJ in Eq). His Honour’s careful reasons on this question indicated that he took into account the motive of Mr Morrow (which the primary judge found was to make Mr Murray believe that the purpose of the joint venture had come to an end so that he, Mr Morrow, could gain control of the Joint Venture Company); the fact that Mr Morrow had been prepared to make one knowingly false statement (that the ABC had not told him that it wanted a consumer affairs program or that it wanted to broadcast The Checkout again) and Mr Murray’s apparently firm recollection of what Mr Morrow had said, which was confirmed by his email in June 2019. I have no reason to doubt the correctness of the primary judge’s finding, which also reflected his Honour’s advantage in seeing and hearing the witnesses: Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 (McHugh J); [1990] HCA 47; Devries v Australian National Railways Commission (1993) 177 CLR 472 at 478-479 (Brennan, Gaudron and McHugh JJ); at 479-481 (Deane and Dawson JJ); [1993] HCA 78; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [41] (Gleeson CJ, Gummow and Kirby JJ); at [93] (McHugh J).

The aftermath of the Duck Inn meeting

60. On 20 February 2019, Mr Morrow emailed Simon Fraser (copied to Mr Murray) suggesting a meeting to discuss how to distribute the PDV rebate. He also referred to his proposal to “draw a line under the joint venture”, “given the hiatus-ing of The Checkout by the ABC” ([294]). His Honour found ([297]):

“I think it likely that Mr Morrow composed the email with the object of suggesting to [Simon] Fraser, and through him Mr Murray, that his motivation in ‘drawing a line under the Joint Venture’ was concerned only with the PDV rebate. This email was the first in a series in which Mr Morrow in this way ‘managed the message’ [a term extracted from Mr Katekar’s submissions] he was conveying to Mr Murray.”

61. On 21 February 2019, Mr Morrow sent a follow-up message to Mr Murray ([298]) and their respective accountants (Simon Fraser and Ms Crouch) setting out how best to distribute the dividend, on two scenarios: first, the status quo (with Giant Dwarf and CJZ each continuing to own a share in the Joint Venture Company), and, second, if Giant Dwarf was the sole shareholder of the Joint Venture Company ([299]-[300]). Following his discussions with Ms Crouch, Simon Fraser sent an email to Mr Murray setting out the various options for distribution (non-franked dividend, loan or fee) ([301]) and said, in part, as follows:

“If we have no position in future series, then we are probably ok to sell our share in [the Joint Venture Company] and contract to maintain our 40% entitlement to royalties. Potentially there is a format fee paid to us on ongoing series that we are not involved in the production of, say 2% (40% of a standard 5% Format fee.) This would be easier then novating the IP [intellectual property], and both parties keeping shares in a JV business. And do we want the name of the company to change as part of any possible sale by us?”

[Emphasis in the primary judge’s reasons for judgment.]

62. The primary judge inferred from the highlighted passage that the parties, at that time, contemplated that there was still a “possibility” that, if CJZ sold its shares in the Joint Venture Company to Giant Dwarf, there might be a further series of The Checkout ([302]).

63. On 22 February 2019, Simon Fraser spoke briefly with Mr Murray, Matthew Campbell (the CEO of CJZ) and Katie Shortland (Head of Business Affairs, CJZ). Mr Campbell and Ms Mason-Campbell were married, a matter on which Ms Chrysanthou placed some significance. In this conversation, Simon Fraser told them that he was about to meet with Mr Morrow and Ms Crouch about distributing the PDV rebate and, potentially, CJZ exiting the Joint Venture Company. Mr Campbell commented that The Checkout was not coming back, to which Mr Murray said, “Yeah, I think that’s probably right but let’s see what they have to say” ([304]).

64. After this discussion, Simon Fraser met with Mr Morrow, Ms Crouch and Ms Chen (who took notes). The only part of Ms Chen’s notes which was not related to the PDV rebate was as follows (extracted at [307]):

“Subsequent series, any format fee or some sort of fee? Need agreement with Nick [Murray].

• Current agreement does not incentivise Jules to continue doing more TCO [The Checkout]

• Format fee can be gross or net".

65. The primary judge found that Ms Chen’s note was reliable ([312]). His Honour also found that Mr Morrow had said (it not having been disputed by Simon Fraser) that Giant Dwarf would not be prepared to make The Checkout again under the present arrangement, that it would be better if The Checkout could be made again and that the value of past episodes of The Checkout would be greater if it were made again ([308]-[313]). Simon Fraser then raised the issue of a format fee for any future episodes of The Checkout, a possibility which he then considered to be low ([314]-[316]).

66. The primary judge noted that it was common ground that Mr Morrow made no mention of his ongoing discussions with the ABC at the meeting ([317]).

67. Following the meeting on 22 February 2019, Simon Fraser reported to Mr Murray by email ([319]) and Ms Chen reported to Mr Morrow about what had transpired.

68. The primary judge rejected Mr Morrow’s evidence that an “agreement in principle”, subject to Mr Murray’s approval, had been reached at the meeting. His Honour referred to contemporaneous emails in support of this finding ([322]-[331]). His Honour found, at [331]:

“These communications make clear to me that it was Mr Morrow's state of mind, and the fact, that no agreement, whether in principle or otherwise, had been reached between the two parties at this time.”

Subsequent discussions between Mr Morrow and the ABC

69. On 28 February 2019, Mr Morrow wrote to Mr Anderson to complain about the lack of progress in arranging a consumer affairs program ([335]). He said in part:

“Overall the pattern looks and feels a lot more like being strung along in private and misrepresented in public than actually moving towards a new project that will fill the gap of quality public broadcast content left by dumping The Checkout.”

70. This email elicited a response from Mr Carrington on 1 March 2019. There were further email exchanges between them between 1 and 4 March 2019 concerning the budget available to the ABC for such a program ([337]-[339]).

Further communications between Mr Murray and Mr Morrow prior to the Share Sale Agreement

71. On 5 March 2019, Mr Morrow wrote to Mr Murray proposing a meeting. When Mr Murray phoned Mr Morrow that day or the next, Mr Morrow emphasised the urgency of resolving the issues between them so that Giant Dwarf could pay off the loan it had taken out for a Netflix show with the PDV rebate ([341]). The primary judge found that this was another example of Mr Morrow “manag[ing] the message” as to the reason why the “deal” ought be progressed ([342]). Mr Murray emailed Simon Fraser suggesting a proposed deal and seeking his advice ([343]). Reference was made to what would occur if future episodes of The Checkout were made, which led his Honour to infer that Mr Murray contemplated the possibility that Giant Dwarf would produce The Checkout again in the event that the share sale proceeded ([344]).

The meeting between Mr Morrow and the ABC on 8 March 2019 and subsequent communications between CJZ and Giant Dwarf

72. On 8 March 2019, Mr Morrow and Rebecca Annetts, then an employee of Giant Dwarf who worked as a producer of The Checkout between 2017 and 2019, met with Mr Anderson and Mr Carrington at the ABC to discuss a consumer affairs program for the second half of 2019 ([347]-[351]). At the meeting Mr Anderson said that the ABC could make $3.2m available for such a program for two seasons and the previous creative control provisions would apply. Mr Morrow told the ABC ([349]) “if Nick and I can work something out which means it's possible to make The Checkout again, then I think it makes sense to do that” and “the ABC should want The Checkout”.

73. Mr Morrow also told the ABC that Giant Dwarf and CJZ had reached agreement on, and were in the process of formalising, the terms for CJZ to exit “The Checkout’s Production company” [the Joint Venture Company] ([351]). The primary judge found that this statement was not correct as no such agreement in principle was reached until later that day (8 March 2019) when Simon Fraser sent an email to Mr Morrow and Ms Crouch ([352]-[353]).

74. His Honour also found Mr Morrow’s statement (made in an email to Mr Murray dated 13 June 2019) that he did not believe that there was a genuine prospect of The Checkout being recommissioned until “well after” CJZ and Giant Dwarf had agreed on the terms of CJZ’s exit from the Joint Venture Company ([353]-[355]) to be knowingly untrue.

75. Later on 8 March 2019, as referred to above, Simon Fraser sent an email to Mr Morrow and Ms Crouch setting out the terms which CJZ proposed for the sale of CJZ’s share in the Joint Venture Company to Giant Dwarf ([361]). Simon Fraser agreed that, at this point, there was an agreement in principle ([363]), which Mr Murray confirmed on 14 March 2019 in an email to Mr Morrow ([364]).

76. Later that day, Mr Morrow sent to the ABC a draft outline and term sheet for a consumer affairs program, which was to be called Are you being served? ([366]). The primary judge asked Mr Morrow to explain the differences between The Checkout and Are you being served?. Mr Morrow accepted the primary judge’s observation that they sounded “quite different” and said that he believed that to be the case ([371]).

77. The primary judge said, at [372]:

“Nonetheless, Mr Morrow plainly believed that a further series of The Checkout was substitutable for any series of Are You Being Served.”

78. This finding was challenged by Ms Chrysanthou on the basis that it had neither been pleaded nor put to Mr Morrow. I do not consider this challenge to have been made out. It was plain, as the primary judge found, that Mr Morrow was proposing another consumer affairs program, Are you being served?, to the ABC pending Giant Dwarf’s acquisition of CJZ’s shares in the Joint Venture Company, following which he intended to propose further series of The Checkout ([351]). In that sense, they were substitutable since the ABC wanted one consumer affairs program and either met that description. These matters were not in dispute. There was no reason for this finding to be either pleaded or put to Mr Morrow.

79. The ABC considered Mr Morrow’s proposal ([373]-[386]). In an email dated 15 March 2019, Georgina Waite (Head of Business Affairs at the ABC) asked Julia Pincus (the Senior Business Affairs Lead at the ABC) to compare the documents provided by Mr Morrow regarding Are you being served? with the corresponding documents for the sixth series of The Checkout to see if it was a “true comparison” ([378]). Ms Pincus responded later that day by email which said in part (as set out at [382]):

“We have looked at the format proposal for 'Are you being Served' and in our view it is sufficiently similar to [T]he Checkout to constitute a 'spin off' from the format, whether we use the title 'Checkout' or not. The format was originally brought to us by [CJZ] who later brought on Giant Dwarf.

As the format for [The Checkout] S 6 was owned 100% by the [the Joint Venture Company] as a first step, we need to ensure [CJZ] don't have a claim against Julian / Giant Dwarf in relation to this new consumer show. This could be achieved by Julian either providing us with the relevant documents to show that he now owns the 100% of the rights in the format or a 'quit claim' from [CJZ]. Ideally we would need information about any commercial arrangement reached between Giant Dwarf and [CJZ] in relation to any transfer of the format as this may impact the budget.”

[Emphasis in the primary judge’s reasons.]

80. The primary judge was cognisant of the limited basis on which the ABC documents had been admitted ([385]). His Honour was entitled to infer that the ABC was sufficiently apprehensive about the similarity between Are you being served? and The Checkout to be concerned about a potential claim by CJZ against Mr Morrow or Giant Dwarf about Are you being served? and that the ABC had an interest in ensuring that such a claim would not be made. These inferences do not involve the hearsay use. The evidence was plainly relevant, including because it provided context to the ABC’s subsequent request for a Quit Claim.

81. Later on 15 March 2019, Mr Carrington wrote to Ms Pincus as follows ([386]):

"I've just spoken to Julian. The format discussions are ongoing between Giant Dwarf and [CJZ], but they seem to be headed in a positive direction.

The proposal is for Giant Dwarf to own [the Joint Venture Company] to produce the series. Giant Dwarf are likely to pay a licence fee to allow the use of the title, 'Checkout'.”

82. The email established that the ABC was aware of the discussions between Giant Dwarf and CJZ and understood (from previous communications) what Mr Morrow’s objective was: that Giant Dwarf would own the Joint Venture Company so that The Checkout could be made again.

83. In the meantime, Mr Morrow continued to communicate with Simon Fraser with a view to finalising the share sale as soon as possible. He continued to refer to the PDV rebate as the reason for the urgency ([392]-[394]).

84. The primary judge found at [412]:

“Mr Morrow's confidence that the new show, then being pitched as Are You Being Served, would ‘become The Checkout’ evidently reflected his confidence that he would successfully negotiate the purchase by Giant Dwarf of [CJZ’s] shares in the Joint Venture Company.”

85. His Honour also found, at [413], that Mr Morrow did not want Mr Murray to know of his negotiations with the ABC because he was concerned that, if Mr Murray did know, he would not sell CJZ’s share in the Joint Venture Company to Giant Dwarf. To this end, Mr Morrow asked the ABC not to reveal to Mr Murray either that the ABC was in negotiations with Giant Dwarf about a new consumer affairs show or that, once CJZ had sold its share in the Joint Venture Company to Giant Dwarf, it was proposed that The Checkout be produced for broadcast ([431]).

86. Within the ABC, there were concerns about a potential conflict of interest (concerning Ms Mason-Campbell because of her husband’s position in CJZ) but also the potential need for a Quit Claim. These concerns were the subject of an email between Simon Melkman (an Editorial Policy Advisor at the ABC) and Mr Carrington and Ms Waite, in which he said in part:

“Georgina and I have discussed the conflict of interest issue in relation to Josie and the potential commissioning of a new consumer affairs show from Julian Morrow. She suggested it would be useful to put a few points in writing for you.

We already have standard processes in place to manage conflicts arising from the fact that Josie's husband is the CEO of CJZ. She always needs to be removed from commissioning decisions relating to CJZ programs, and she needs to maintain strict confidentiality in relation to any information she gains via her ABC role that could have an impact on CJZ's business.

This particular case has a few complications: (1) it's not a CJZ show per se, but it's directly related to a previous [Joint Venture Company] show - and the question of whether CJZ will be involved (I understand the intention is for them not to be involved) is a live issue with big consequences for CJZ; (2) there's apparently some tricky wrangling going on with Julian in relation to obtaining a [Quit Claim] from CJZ and licensing the Checkout title - he wants us to proceed with negotiations and commissioning decisions without informing CJZ, which would be both contentious and detrimental to CJZ; (3) Josie has a legitimate stake in the commissioning decision, since if the show is commissioned it will have a big impact on the rest of her slate (in terms of budgeting etc.), but also a clear conflict.”

87. This email was not referred to by the primary judge but it was relied on by Mr Katekar in this Court and in the Court below in support of his submission, which I accept, that the ABC was alive to the potential need for a Quit Claim from CJZ over a month before Mr Murray sent his email of 21 May 2019, following which the ABC required a Quit Claim as a precondition of its further commissioning The Checkout (see below).

88. The ABC’s concerns about the change in ownership led Ms Pincus to write to Mr Morrow on 2 April 2019 saying in part ([433]):

“… I thought it would be useful to set out a brief summary of what we would require in that scenario as it may be relevant to your negotiations. Our preliminary thoughts are that we would need:

•    A quit claim from [CJZ] (and any relevant related company) releasing the [Joint Venture Company] and [Giant Dwarf] from all possible claims (including infringements of IP, breach of contract or breach of confidentiality). A transfer of rights will not in itself release the [Joint Venture Company] or [Giant Dwarf] of any claims and such claims could impact production of the program;

•    In order to confirm chain of title in relation to ownership of the Checkout format by [the Joint Venture Company], a solicitor's opinion in relation to the documentation which would need to trace the history of the ownership of the format.

…”

89. In the meantime, on 1 April 2019, Mr Morrow sent a draft of the Share Sale Agreement to Mr Murray, referring again to the PDV rebate ([438]-[439]). On 2, 3 and 4 April 2019, Mr Morrow communicated with Mr Murray with a view to getting him to sign the Share Sale Agreement ([441], [447], [448]). The primary judge found ([449]-[450]):

32.	540	I see nothing in any of the evidence to suggest that Mr Murray should have, himself, made enquiries of Mr Morrow or the ABC between 19 February 2019 and 8 April 2019.	Mr Murray did not make enquiries of Mr Morrow and/or the ABC between 19 February 2019 and 8 April 2019 about the possibility of making another series The Checkout.	It was common ground that Mr Murray did not make such enquiries during that period. The primary judge was correct to regard this matter as confirming Mr Murray’s expectation that if there was a genuine prospect of The Checkout being made again, Mr Morrow would tell him about it.
33.	670	CJZ did not repudiate its obligations under the Share Sale Agreement.	On 14 June 2019 (ExA12.5348), Giant Dwarf proposed a resolution of the impasse in relation to the execution of the Quit Claim which reserved CJZ's rights to pursue claims not related to the "Checkout IP", a proposal CJZ rejected. The Breach Notice dated 19 June 2019 (ExA 12.5363) issued by Giant Dwarf to CJZ stated (in para 20) that CJZ's "communications with the ABC and dealing with our client evidence a clear intention to rescind or not be bound by the terms of the SSA" and identified the conduct evidencing that intention. By letter dated 19 June 2019 (ExA12.5373), CJZ expressly refused to stand by the validity of the SSA.	Unnecessary to decide in light of Adamson JA’s reasons to dismissing the cross-appeal from the order for rescission. However, it is addressed in reasons of Adamson JA at [184]-[185].
34.	676	Mr Murray, it appears correctly, took that to be a dishonest answer and the settlement “fell over” as a result.	Mr Murray was incorrect in his belief that Mr Morrow gave a dishonest answer on 17 June 2019 to a question about how many series of The Checkout the ABC was proposing to commission.	See reasons of Adamson JA at [169].
35.	820	Mr Reucassel expressed some support for Mr Murray’s “current position” of not executing a Quit Claim.	Mr Reucassel did not express support for Mr Murray’s position of not executing a Quit Claim. The statement in Mr Murray’s email to Mr Carrington on 20 June 2019 that his position of not executing a Quit Claim was supported by a director of Giant Dwarf was false. ExA14.6278-81.	See reasons of Adamson JA at [190]-[192].
36.	940	Mr Murray did not allege fraud against Mr Morrow in these proceedings and has not been able to justify the allegations of fraud made in these two emails.	Mr Murray alleged fraud against Mr Morrow repeatedly in the proceedings without justification.	See reasons of Adamson JA at [234].
37.	963, 968	There is no evidence to suggest that anything Mr Murray said led Mr Morrow to reach any such conclusion or a change in the ABC’s position.	After Mr Murray's communications to the ABC, the ABC offered Giant Dwarf substantially less favourable terms for a new consumer affairs program.	See reasons of Adamson JA at [239].
38.	998	Mr Morrow did not call Mr Reucassel to contradict that evidence, notwithstanding the fact that, as I have said, Mr Reucassel is a director and shareholder of Giant Dwarf.	Mr Reucassel was not a director of Giant Dwarf at any time from 2019 onwards. In Mr Reucassel’s communications with Mr Ben Kay (ExA14.6278-81), Mr Reucassel did not agree with Mr Murray’s claims about Mr Reucassel’s conduct.	This finding is related to fact 35 above: see the reasons of Adamson JA at [190]-[192]. Mr Reucassel was a director of Giant Dwarf at the relevant time (2019); therefore although there is a slight error in the primary judge’s use of the present tense, it is immaterial.
39.	1002	I see no basis to conclude that Mr Murray was actuated by malice in making this statement. Indeed, Mr Murray’s evidence as to what Mr Reucassel said to him provides some basis for it.	Mr Murray was actuated by malice towards Mr Morrow at all times on and after 21 May 2019.	Not necessary to decide as causation not established.
40.	1006	I see no reason to doubt that Mr Reucassel did make this statement to Mr Murray.	Craig Reucassel did not recently before 21 May 2019 ask CJZ or Mr Murray to take over management and production of The Checkout.	Not necessary to decide as causation not established.
41.	1007	[A]lthough it was untrue to the extent it referred to “the recent past”, [the primary judge did] not find it was made maliciously.	Mr Murray was actuated by malice towards Mr Morrow at all times on and after 21 May 2019.	Not necessary to decide as causation not established.
42.	1044-45	…when read in the context of the whole email, it is clear that Mr Murray is referring to the possibility of subpoenas being served on the ABC were he to commence proceedings against Mr Morrow, Giant Dwarf and the Joint Venture Company, and of the ABC thereby incurring expense. Mr Murray’s statement was thus not only true, but it was prescient.	Mr Murray made a false representation that if the ABC commissioned The Checkout or any other consumer affairs programs involving Mr Morrow or Giant Dwarf without the involvement or consent of CJZ, CJZ would cause the ABC to suffer commercial damage.	Not necessary to decide as causation not established.

Amendments

18 July 2023 - "23 June 2023" replaced by "23 June 2022": Coversheet - Decision; [3], [342]

"Defamation Act 1974" replaced by "Defamation Act 2005": Coversheet - Legislation; [248(1)]

Decision last updated: 18 July 2023