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

In the proceedings before the Court of Appeal of New South Wales, CJZ Pty Ltd (the applicant/appellant) appealed against decisions of Stevenson J concerning claims of misleading and deceptive conduct and defamation. The primary dispute involved allegations by CJZ Pty Ltd that Giant Dwarf Pty Ltd and Mr Morrow (the respondents/defendants) engaged in misleading and deceptive conduct by failing to disclose negotiations for the production of further series of the television program "The Checkout" during the execution of a Share Sale Agreement. Separately, the proceedings also concerned defamation claims.

The Court of Appeal was required to determine whether the primary judge erred in finding that there was no misleading or deceptive conduct by Giant Dwarf Pty Ltd and Mr Morrow. This involved considering whether there was a reasonable expectation of disclosure regarding the future production of the television program and whether the Share Sale Agreement was induced by misleading or deceptive conduct. The court also had to consider the appropriateness of rescission as a remedy. Furthermore, the appeal involved a determination of whether the primary judge erred in their application of the test for the defence of qualified privilege in the defamation proceedings and whether express malice was established. Finally, the court was asked to consider applications for leave to appeal and the exercise of discretion regarding costs, including whether offers to settle made on a *Calderbank* basis should have led to costs being awarded on an indemnity basis.

Regarding the misleading and deceptive conduct claims, the Court of Appeal dismissed the cross-appeal, finding no error in the primary judge's conclusions. However, the court granted leave to appeal in respect of costs. In the defamation proceedings, the court granted leave to appeal on several grounds and allowed the appeal, setting aside the primary judge's orders and entering judgment for the defendants. The court also made specific orders regarding the costs of both the misleading and deceptive conduct proceedings and the defamation proceedings, including ordering the second and third plaintiffs to pay the first and second defendants’ costs on an indemnity basis in the former, and ordering the plaintiff to pay the defendants’ costs in the latter. The court also released the second defendant from an undertaking.