Construction Industry Long Service Leave Board & Anor Odco Pty Ltd
[1988] FCA 322
•24 JUNE 1988
Re: CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD and EDWIN HOWDEN
And: ODCO PTY.LTD; BRIAN PAUL GROVES and PAUL JOSEPH BOSA
No. VG 202 of 1988
Trade Practices
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson(1) J.
CATCHWORDS
Trade Practices - Enforcement and remedies - Injunctions - Interim injunction - Conduct alleged as contravention of Act and as defamation - Principles applicable.
Trade Practices Act 1974 - s.52
Construction Industry Long Service Leave Act 1983 (Vic.) - s.4
Public Service Act 1974 (Vic.)
Church of Scientology of California Inc. v. Reader's Digest
Services Pty. Ltd. (1980) 1 NSWLR 344
Commercial Bank of Australia Ltd. v. Insurance Brokers Association of Australia (1977) 16 ALR 161
Global Sportsman Pty. Ltd. v. Mirror Newspapers Ltd. (1984) 55 ALR 25
Hornsby Building Information Centre Pty. Ltd. v. Sydney Buildin g
Information Centre Ltd. (1978) 140 CLR 216
Insurance Commissioner v. Australian Associated Motor Insurers Ltd. (1982) 45 ALR 39
HEARING
MELBOURNE
#DATE 24:6:1988 Counsel for the Applicants: Dr. J. McL. Emmerson, QC and Mr. P.M. Bornstein
Solicitors for the Applicants: Freehill Hollingdale & Page
Counsel for the Respondents: Mr. E.D. Lloyd, QC and Mr. L. Kaufman
Solicitors for the Respondents: Roth Warren & Co.
JUDGE1
Motion for interlocutory restraint of publication of
statements the publication of which is alleged to constitute contraventions of s.52 of the Trade Practices Act 1974.
The respondent Odco Pty. Ltd. ("Odco") has for some years carried on business in Victoria and, more recently, in Queensland in the building industry. One of Odco's principal activities has been providing to builders, for reward, the services of building workers. Odco has at relevant times maintained that those services are provided in performance of contracts between itself and the building workers which are not contracts of employment. But it appears that at times some of the building workers and the builders on whose sites they were working represented that the building workers were working in performance of contracts of employment by the builders. It is suggested in a brochure which Odco published this year in advertisement of its business, and in respect of statements in which this proceeding has been brought, that certain trade unions in the building industry have been, and remain, opposed to the existence, at least in Victoria, of labour relationships of the kind which Odco creates between itself and building workers, that the unions' opposition has been expressed by what is commonly called industrial action and by the threat of industrial action, and that Odco has in various ways striven, and continues to strive, to defeat what in the brochure is alleged to be "the unions' resolve to put (Odco) out of business".
The applicant the Construction Industry Long Service Leave Board ("the Board") is a body corporate constituted by the Construction Industry Long Service Leave Act 1983 (Vic.). That Act creates long service leave entitlements in several classes of persons engaged in the "construction industry", an expression which is so defined in the Act as to comprehend the building industry. The Board is required by the Act to administer a fund constituted by the Act, into which are to be paid charges imposed on employers in respect of periods of employment of workers, and from which are to be paid to workers and their personal representatives the long service leave benefits for which the Act makes provision. The Board is empowered to recover the charges payable by employers, and to bring legal proceedings for offences against the Act. The Act provides for the appointment, under and subject to the Public Service Act 1974 (Vic.), of such inspectors and other officers and employees as are required to assist the Board in the administration of the Act. Inspectors are empowered by the Act to enter premises, to require the production of wage and other employment records for their examination, and to "make such examination and enquiry as may be necessary to ascertain whether the provisions of this Act are or have been complied with."
The brochure is printed on fourteen foolscap pages, on three of which letters are reproduced. The business activity of Odco to which I have referred is carried on under the name "Troubleshooters Available". Some understanding of the purposes in publishing the brochure of the respondents Brian Paul Groves and Peter Joseph Bosa, who are directors of Odco and whose names are printed below the text of the brochure to suggest authorship, may be derived from the circumstance that it was sent to many parliamentarians as well as to many persons engaged in the building industry, and from the text on the last page of the brochure, which reads:
"9. SUMMARY
For over a decade, Troubleshooters Available has been blackbanned by certain building unions. These bans have sprung from philosophical differences, not from any real industrial disputes. In our entire history no subcontractor working through Troubleshooters Available has ever complained to the union about the way we have treated them, conditions, pay, etc. In short, NO UNION MEMBER HAS EVER MADE A COMPLAINT ABOUT US.
Whilst Troubleshooters Available (the agency), the client and the subcontractor (union member), have enjoyed an harmonious relationship, each getting on with the job, the union leadership has taken a somewhat different view. They now no longer see labour hire and independent contractors as desirable and wish them eradicated from industry. In an industry where highs and lows in production are normal, labour hire is simply the best way to make a business most viable and profitable.
After many years of union harassment, Troubleshooters Available has issued Writs in the Supreme Court to take the B.W.I.U. and the V.O.B.S. to task. The unions are not above the law. This action will mean that any future union problem involving Troubleshooters Available will be decided by the full power of the Supreme Court. Our action will protect the builder/client from direct confrontation.
We are not part of the industrial relations "Club" where deals are made and the builder/client gradually gets shafted. Now is the time for you to help us to help you before the unions turn industry into a larger nightmare that it is now. Protect your rights and the rights of the self-employed by supporting our organisation in whatever way you can.
We are actively involved in all facets of industrial relations, the legalities and the practicalities. If the builder/client has any union trouble or union interference on sites because of Troubleshooters Available, (either direct or disguised), we, as an organisation, give a guarantee that no financial loss, immediate or over time, will be incurred by the builder/client as long as we are given full control of all negotiations involving the unions.
Now that Troubleshooters Available has issued these Writs, every client of this organisation comes under the immediate protective umbrella of the Supreme Court of Victoria. For the first time since we can remember, the builder/client will be back on an equal footing with the unions.
This issue is about the right of the independent operator to remain independent.
Troubleshooters Available is simply a small business defending its right to trade for the benefit of all those who depend on it.
If being pro-productivity makes us anti-union, then that's a cause of great shame for the country."
The title page of the brochure contains, in addition to a logo, the following:
"Troubleshooters
Available
(ODCO PTY.LTD.INCORPORATED IN VICTORIA) 9 King Street,
Oakleigh.3166
Telephone 568-4877
LABOUR CONSULTANTS.LABOUR AGENCY
Profile of Company
INDEX
1. INTRODUCTION
2. BENEFITS OF THE AGENCY
3. ORIGINS AND EARLY HISTORY
4. HISTORY OF NEGOTIATIONS AND LEGAL ACTION
5. STATUS - AUSTRALIAN TAXATION OFFICE AND PAYROLL TAX
6. CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD INVESTIGATION
7. TROUBLESHOOTERS AVAILABLE VERSUS WORKCARE
8. THE QUEENSLAND EXPERIENCE
9. SUMMARY."
The text under the heading "6. Construction Industry Long Service Leave Board Investigation" is as follows:
"Writs were issued on the B.W.I.U., Nick Moore (Trades Hall Council Representative, Chairman Building Industry Group) and on other union officials on Friday 17 July, 1987.
Nick Moore is a member of the Construction Industry Long Service Leave Board (representing the building unions).
On Tuesday 21 July, 1987, Troubleshooters Available received notification from the Long Service Leave Board that a senior inspector (Phillip Crowhurst) would be at the Troubleshooters Available office to examine all the relevant books to determine if the Act (Long Service Leave Act) had been complied with.
The letter of notification was dated 20 July, 1987.
Troubleshooters Available has had ongoing correspondence, various investigations and interviews starting with a letter from the Board dated 6 November, 1981.
In nearly six years of investigation, Troubleshooters Available has never received, either in writing or verbally, any indication that the Agency is caught by the Long Service Leave Act.
After such an extended and lengthy investigation, Troubleshooters Available has asked Phillip Crowhurst to give us in writing a guarantee that within six weeks of this latest interview, the Long Service Leave Board will give Troubleshooters Available agreement with Troubleshooters Available's stand on this matter, or a letter of intent of further action to be taken to resolve the matter.
The Board refused to be held to any time frame and said that a written answer will be given when a decision is made.
The writer asks 'Could that be another five years or more'?
There is definitely a connection between building unions and the Construction Industry Long Service Leave Board. One might even be so bold as to suggest perhaps influence is being exerted considering the date of the Writ and the date of this latest investigation.
The writer therefore concludes that any @soft pedalling' in this matter will show weakness as it appears from the length of the investigation that they have some vested interest in seeing Troubleshooters Available no longer in the market place.
Ed Howden, the manager of the scheme, privately advised Troubleshooters Available's directors to change companies as they would be looking for seven years of back payments.
He gave the writer the impression that the actions of the Board were being controlled from above his authority and his hands were tied.
The most recent update is that on 17 February, 1988 Ed Howden informed Troubleshooters Available that legal advice on the case had come back in the negative and so the Board had decided to drop the investigation and a letter to that effect would be delivered to the Troubleshooters Available office directly."
The first three sub-sections of section 4 of the Construction Industry Long Service Leave Act 1983 provide:
"4.(1) There shall be a Board to be known as the Construction Industry Long Service Leave Board.
(2) The Board shall be a body corporate having perpetual succession and a common seal and shall be capable in law of suing and being sued and subject to this Act of acquiring, holding and disposing of real and personal property.
(3) The Board shall consist of eleven members appointed by the Governor in Council of whom -
(a) one shall be appointed Chairperson;
(b) four shall be nominated by the Victorian Trades Hall Council of whom-
(i) two shall be representatives of workers who perform building trades work; and
(ii) two shall be representatives of workers who perform electrical trades work or metal trades work;
(c) four shall be persons nominated by the Minister, being persons whose names were submitted to him at his invitation by organisations which in his opinion represent employers in the construction industry, of whom -
(i) two shall be representatives of employers employing workers to perform building trades work; and
(ii) two shall be representatives of employers employing workers to perform electrical trades work or metal trades work;
(d) one shall be a person having knowledge of or experience in the investment of money; and
(e) one shall be an actuary."
The statement of claim, which was filed with the originating application, alleges the corporate personality of the Board (paragraph 1), that the other applicant is and at material times was "the Operations Manager of the Board" (paragraph 2), that Odco is and at material times was a trading corporation within the meaning of the Trade Practices Act 1974 (paragraph 3), that the other respondents are and at material times were directors and either servants or agents of Odco and managers of its business (paragraph 4), that each of the respondents "published or caused to be published and distributed or caused to be distributed throughout Victoria and Australia" the brochure which I have already identified (paragraph 8), and that the brochure contains the words which constitute the section of the brochure numbered 6 which I have quoted (paragraph 9). The statement of claim concludes with the following paragraphs:
"10. The said words in their natural and ordinary meaning meant and were understood to mean that:-
(a) building unions have a connection with the Board which confers on them an ability to exert improper influence over the conduct of the Board;
(b) building unions have exerted an improper influence over the conduct of the Board;
(c) the Board has a 'vested interest' in closing down the operations and business of the firstnamed Respondent;
(d) Howden was the manager of a scheme or conspiracy to put the firstnamed Respondent out of business;
(e) Howden -
(i) had given to the firstnamed Respondent advice on how to defraud the Board by evading long service leave charges;
(ii) had encouraged the firstnamed Respondent to defraud the Board by evading long service leave charges;
(iii) had inferred that his investigations concerning the firstnamed Respondent were being conducted at the insistence of persons with higher authority;
(f) the investigation conducted on behalf of the Board concerning the firstnamed Respondent was an improper exercise of the Board's powers;
(g) the Board had informed the firstnamed Respondent that the Board had received legal advice that the firstnamed Respondent's workers were sub-contractors and not employees;
(the meanings conveyed by the said words being hereinafter referred to as the statements').
11. Each of the statements is false and is misleading and deceptive in that:-
(a) building unions do not have a connection with the Board which confers on them an ability to exert improper influence over the conduct of the Board;
(b) building unions have never exerted an improper influence over the conduct of the Board;
(c) the Board does not have a 'vested' or any interest in closing down the operations and business of the firstnamed Respondent;
(d) Howden was not the manager of a scheme or conspiracy to put the firstnamed Respondent out of business;
(e) Howden had not -
(i) advised the firstnamed Respondent on how to evade long service leave charges;
(ii) encouraged the firstnamed Respondent to defraud the Board by evading long service leave charges;
(iii) inferred that his investigations concerning the firstnamed Respondent were being conducted at the insistence of persons with higher authority;
(f) the investigation conducted on behalf of the Board concerning the firstnamed Respondent was not an improper exercise of the Board's powers;
(g) Howden had never informed the firstnamed Respondent that the Board had received legal advice that the firstnamed Respondent's workers were sub-contractors and not employees.
12. The statements were made by the Respondents and each of them in the course of trade and commerce.
13. The conduct of the firstnamed Respondent referred to in paragraphs 8 to 12
(inclusive) constitutes conduct that is or was misleading or deceptive and/or was likely to mislead or deceive contrary to the provisions of Section 52 of the Act.
14. Further each of the secondnamed and thirdnamed Respondents has aided, abetted, counselled, procured and conspired to effect the aforesaid conduct of the firstnamed Respondent and has been directly or indirectly knowingly concerned in and a party to all such conduct of the firstnamed Respondent.
15. The aforesaid conduct of the Respondents was and is calculated to injure and has injured and is continuing to injure the reputation and standing of the Board and Howden and each of them.
16. Further, and, or in the alternative, to paragraphs 13, 14 and 15 hereof, each of the statements was and is defamatory of the Board.
17. Further, each of the statements set forth in paragraphs 10(d), (e) and (g) was and is defamatory of Howden.
18. By reason of the publication and distribution of the said brochure by the Respondents the Board has been greatly injured in its reputation and is thereby impeded in carrying out and administering its functions pursuant to the Construction Industry Long Service Leave Act 1983 (Victoria) and has suffered and continues to suffer loss and damage.
19. Further, by reason of the publication and distribution of the said brochure by the Respondents, Howden:-
(a) has been injured in his character, credit and reputation and has been brought into public scandal, odium and contempt;
(b) has been injured in his position as the Operations Manager of the Board
and has suffered and continues to suffer loss and damage.
20. Further, the Respondents and each of them published or caused to be published and distributed or caused to be distributed the said brochure knowing the statements set forth in paragraph 10 hereof to be false or alternatively did so recklessly not knowing whether the same were true or false and such conduct was carried out maliciously and with the intention of damaging the Applicants and each of them.
21. The Applicants have requested the Respondents to discontinue the conduct referred to in paragraphs 8 to 12
(inclusive) hereof but the Respondents have, and each of them has, refused and neglected so to do and they threaten and intend, and each of them threatens and intends unless restrained by this Honourable Court, to continue to engage in such conduct.
22. By reason of the foregoing each of the Board and Howden has suffered and will suffer loss and damage."
The remaining paragraphs of the statement of claim read:
"5. In or about July 1987, inspectors of the Board charged with administering the Board's functions commenced an investigation into the activities of the firstnamed Respondent with a view to determining whether that company or any other person carrying out work in the construction industry on the instructions of the firstnamed Respondent had any liability for long service leave charges pursuant to the provisions of the Construction Industry Long Service Leave Act 1983 (Victoria).
6. The said investigation continued for several months but was inconclusive.
7. In or about February 1988, the Director of the Board wrote to the firstnamed Respondent informing it that the results of the said investigation were inconclusive and that the Board did not intend to conduct any further investigation at that time."
The relief claimed by each applicant in the originating application included damages "pursuant to Section 82 of the Trade Practices Act 1974", and "for malicious falsehood", and "for defamation". The interlocutory restraint claimed in that application, and specified in the notice of the motion now under consideration (which motion was made before the date for the hearing of that claim which was endorsed, pursuant to Order 4 Rule 9(2), on that application), was "from publishing or causing to be published or distributing or causing to be distributed any brochure or other printed material containing the words set forth in paragraph 9 of the Statement of Claim or any other statements or words to the same or similar substance or effect or any other statement or words defamatory of the Applicants or either of them". Dr. Emmerson Q.C., who appeared with Mr. Bornstein for the applicants on the hearing of the motion, submitted that the contraventions of s.52 of the Trade Practices Act 1974 which were alleged provided the justification of interlocutory relief. Mr. Lloyd Q.C., who appeared with Mr. L. Kaufman for the respondents, submitted that, if repetition of the conduct of the respondents alleged in the statement of claim would not, considered as the subject of a proceeding for damages for defamation, be restrained pending the trial of such a proceeding, repetition of that conduct could not, or alternatively should not in the proper exercise of discretion, be so restrained as conduct the subject of a proceeding for remedies afforded by Part VI of the Trade Practices Act 1974 in respect of a contravention of s.52 of that Act.
It is important to determine what the mistaken beliefs are which the respondents' statements have a tendency to induce in the classes of persons likely to read them. It is plain, I think, that paragraphs 10, 11 and 13 of the statement of claim amount to assertions that statements in section 6 of the brochure have a tendency to induce beliefs in the terms or to the effect of what is expressed in sub-paragraphs (a) to (g) (inclusive) of paragraph 10.
The statement in the third last paragraph of section 6, an assertion as to the occurrence of a past event, does in my opinion have a tendency to induce beliefs in the terms or to the effect stated in sub-paragraphs 10(e)(i) and 10(e)(ii) of the statement of claim. Mr. Howden has on oath denied the occurrence of any such an event. Each of Messieurs Groves and Bosa has sworn that the event did occur. Here is a serious question to be tried.
No separate submissions were directed by counsel to sub-paragraph 10(g) of the statement of claim. If any belief in the terms or to the effect of the contents of that sub-paragraph were likely to be induced, it would be induced by the statements in the last paragraph of section 6. A person familiar with the building industry who had read certain other parts of the brochure as well as section 6 and who had some understanding of the scheme of the Construction Industry Long Service Leave Act 1983 might have understood the phrase "in the negative" as signifying the legal conclusion "that the firstnamed respondent's workers were sub-contractors and not employees". Mr. Howden did not explicitly swear that the past event alleged in the last paragraph of section 6 to have occurred did not occur. If some such an event did occur, no prima facie case of misleading conduct by publication of that last paragraph is shown, in my opinion. It was sworn on behalf of the Board that the advice sought by the Board from its solicitors in fact was "whether or not the workers contracted out by the firstnamed Respondent were employees of the firstnamed Respondent in respect of whom the firstnamed respondent has a liability to pay long service leave charges to the Board", and that the advice received was "that the matter was not clear". It was sworn by each of Messieurs Grove and Bosa that the brochure now being published no longer contains section 6, but does contain a copy of a letter dated 26 February 1988 from the Board to Mr. Groves which reads:
"I refer to your letter dated 10 April 1987 and previous meetings and discussions with Board staff relating to the work and involvement of your business in the Building and Construction Industry.
As you are aware the Board has been investigating the relationship between your business and the persons engaged to perform construction work in order to finalise an opinion in relation to coverage by the provisions of the Construction Industry Long Service Leave Act 1983.
At a General Meeting of the Board on 16 February 1988, the Board decided not to pursue long service leave charges in relation to the persons who have been performing building and construction work as it is currently considered that there is insufficient evidence available to prove an employer/employee relationship."
Even if a prima facie case of misleading conduct in the publication of the last paragraph of section 6 were found, discretionary considerations could not in my opinion justify the grant of interlocutory relief in respect of that conduct.
I turn to sub-paragraph 10(d) of the statement of claim. Mr. Howden describes his occupation in his affidavit as "a senior officer" of the Board. In other evidence he was described as "chief inspector", and as having the supervision of about a dozen inspectors. The allegation in paragraph 2 of the statement of claim that Mr. Howden is and at material times was "the Operations Manager" of the Board is not expressly verified by evidence. I have received no clear understanding from the evidence of Mr. Howden's place in the Board's administrative hierarchy. I have difficulty in forming a view as to what a person familiar with the building industry might reasonably take the words, "Ed. Howden, the Manager of the scheme", to mean. Having regard to the rest of section 6 which follows those words, I have concluded that a person reading those words could not reasonably take them to suggest that it was of a scheme or conspiracy to put Odco out of business or otherwise to harm that company wrongfully that Mr. Howden was manager. All that follows those words suggests that the author's opinion is that Mr. Howden is being forced against his own inclination by a person or persons in authority over him to take, or to suffer others to take, actions on behalf of the Board against Odco's interest. And the sentence in which those words occur attributes to Mr. Howden conduct which according to his legal representatives' allegations in sub-paragraphs 10(e)(i) and 10(e)(ii) of the statement of claim is to be characterized as advising and encouraging Odco to save money by a particular kind of fraud. None of this supports a supposition that the word "scheme" may have been intended by the author of the brochure to designate a conspiracy or plan or enterprise to harm Odco. It suggests rather that the word was intended by the author to designate either the statutory scheme of administration by the Board of long service leave in the building industry or the subordinate scheme of inspection and investigation conducted by the Board in the course of that administration. Of the latter "scheme" Mr. Howden may in fact, the evidence suggests, have been the manager. Of the former "scheme" it may perhaps have been natural for persons subject to investigation by Mr. Howden or his subordinate inspectors to think him the manager. I do not find a prima facie case, or serious question to be tried, of misleading conduct inducing a belief in the terms or to the effect of sub-paragraph 10(d) of the statement of claim.
Concerning the contents of the remaining sub-paragraphs of paragraph 10 of the statement of claim, namely (a), (b), (c), (e)(iii) and (f), it may in my opinion be said that there is a prima facie case that a reasonable person would be induced by what appears in section 6 of the brochure to form the belief that the author of the brochure held a belief and opinion in the terms or substantially to the effect of each of those sub-paragraphs. But if that were all, there would be no prima facie case, conformable with the statement of claim, that publication of words likely to induce any of those former beliefs in reasonable readers contravened s.52 of the Trade Practices Act 1974. The statement of claim is not concerned to allege conduct misleading such persons as to the beliefs or opinions of any of the respondents, or misleading such persons as to the existence of reasonable grounds for the beliefs or opinions of any of the respondents. The statement of claim must be taken to allege, and Dr. Emmerson submitted, that the respondents' conduct in publishing what is contained in section 6 contravenes s.52 by reason of the tendency of the statements in section 6 to induce in the mind of the reasonable person who reads them a belief in the terms or to the effect of each of sub-paragraphs (a), (b), (c), (e)(iii) and (f) of paragraph 10 of the statement of claim. That is the case which is presented on behalf of the applicants.
As Stephen J. observed in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. (1978) 140 CLR 216 at 228, it is important to "identify the respect in which there is said to be any misleading or deception", which I have endeavoured to do, and, if persons are shown to have been, or to be likely to be, misled in that particular respect, it is important "to inquire why this misconception has arisen" or is thought likely to arise. There was no evidence that any misconception, as the applicants would have it to be, of a kind which finds expression in one of the sub-paragraphs (a), (b), (c), (e)(iii) and (f) of paragraph 10 had arisen in the mind of any person after he had read section 6 of the brochure. But Dr. Emmerson submitted that I should find that it was likely such misconceptions would arise in consequence of the perusal of that section of the brochure, and that was so, he further submitted, because statements in that section had the tendency to induce those misconceptions.
As already indicated, the matter contained in section 6 may be said, with good reason, to be likely to be taken by a reasonable reader to include an assertion of the author's belief and opinion in the terms or substantially to the effect of each of the statements contained in sub-paragraphs (a), (b), (c), (e)(iii) and (f) of paragraph 10. As the literal truth may by reason of circumstances be misleading, so, too, there may be circumstances in which an expression of opinion or belief will be misleading although the person expressing the opinion or belief means what he says and has reasonable grounds for saying it. But in general the law is no doubt as it was expressed in Global Sportsman Pty. Ltd. v. Mirror Newspapers Ltd. (1984) 55 ALR 25 at 31:
"An expression of opinion which is identifiable as such conveys no more than that the opinion expressed is held and perhaps that there is basis for the opinion. At least if those conditions are met, an expression of opinion, however erroneous, misrepresents nothing."
What is there said of opinion may as truly be said of belief, in my opinion.
In my opinion it is made clear that the author of the brochure is venturing an opinion and a belief to the effect of what is stated in sub-paragraphs (a), (b), (c), (e)(iii) and (f), and is not asserting his actual knowledge. So much in my opinion appears from "One might even be so bold as to suggest perhaps" and "The writer therefore concludes .... as it appears" and "He gave the writer the impression". The unlikelihood that any reader would be misled into forming a mistaken belief, in the terms of any of those sub-paragraphs, the cause of which could be found in a tendency of the material in section 6 to mislead rather than in the reader's unreasonableness, is increased by the author's disclosure of what he says is the ground of some of his beliefs and opinions : "considering the date of the Writ and the date of this latest investigation" and "from the length of the investigation". Neither of the two respondents who signify in the brochure their responsibility for, if not their authorship of, the brochure is represented in the brochure as having undisclosed information by reference to which the beliefs and opinions under present consideration are validated. Nor is this a case in which the belief or opinion in question is expressed by some person well known to be expert or particularly well-informed in the subject matter of the belief or opinion expressed. I do not consider that a serious question to be tried is shown in respect of the allegations of misleading conduct contained in sub-paragraphs (a), (b), (c), (e)(iii) and (f) of each of paragraphs 10 and 11 of the statement of claim and in paragraphs 8, 9, 12 and 13 thereof.
I turn to consider the exercise of the discretion to grant or withold interlocutory injunctive relief, both in respect of the misleading conduct specified in sub-paragraphs (e)(i) and (e)(ii) of paragraphs 10 and 11 of the statement of claim and also, in case I be in error in failing to find a serious question to be tried in respect of the other sub-paragraphs (except sub-paragraph (g)) of those two paragraphs, in respect of the misleading conduct specified in those latter sub-paragraphs.
There was evidence, which I accept, that Mr. Howden has been greatly distressed by the imputations of misconduct which section 6 conveys. There was evidence which was said to show that Mr. Howden's capacity to carry out his duties effectively was seriously impaired, not only by his own distress but also by the suspicions about him which publication of the brochure had engendered in his subordinates and in persons engaged in the building industry with whom he deals in the performance of those duties. I think it unlikely that Mr. Howden's capacity to carry out his duties would be impaired, by further publication before trial of this proceeding of the statements concerning him in section 6 of the brochure, otherwise than in consequence of his own feelings. It was suggested that his candidacy for promotion and transfer within the public service, which he has sworn that he desires presently to advance, would be prejudiced by further publication of such statements. Again I think that unlikely : I cannot think so ill of those senior public servants to whom his candidacy would be submitted.
Each of Messieurs Groves and Bosa has sworn:
"Although the proper protection and advancement of the interests of the Respondents may require further communication of the allegations of fact complained of I and the other Respondents have no intention of further publishing or distributing the brochure in the form complained of not by reason of these proceedings but by reason of the fact that it is now out of date. The brochure complained of in the Statement of Claim has been updated in several respects. Part 6 of that brochure has been replaced with a copy of a letter from the First Named Applicant to the Second Named Respondent dated 26th February 1988. This letter was not in existence at the time of the publishing of the brochure complained of."
That is the letter I have set out. There was no other evidence to suggest that any of the respondents would be caused damage by the making of an interlocutory order restraining further publication of statements in the terms or to the effect of those contained in section 6 of the brochure. In submission Mr. Lloyd suggested that circumstances might well arise before trial of this proceeding in which serious damage would be sustained by Odco, and so by the other respondents, if it were not free to utilise, in its own defence against attempts to drive it from the building industry, the allegations which section 6 contains. In the absence of evidence of the descriptions of circumstances likely call for such a defence, I am unable to find any appreciable risk that an injunctive order of the kind sought would cause damage to any of the respondents.
An officer, but no member, of the Board has deposed that there is no truth in any of the imputations against the Board which section 6 contains. An officer of the Board has deposed:
"The Board is most concerned that the continued distribution and publication of the brochure containing the various false assertions relating to the Board and to one of its senior officers, Howden, is seriously detrimental to the Board's interest and standing. An allegation that Howden, as a senior Board officer, had given advice as to how to defraud the Board is a matter that could seriously put at issue the integrity of the Board and its officers."
I think it quite unlikely that the Board's capacity to carry out the functions conferred on it will be seriously impaired by further publication before trial of this proceeding of the statements contained in section 6.
Neither the Board nor Mr. Howden provides to any section of the public anything within the meaning of "goods" or "services" in the Trade Practices Act 1974. Odco provides to "consumers" the services which I have described. The misconceptions which it is alleged that section 6 of the brochure is likely to induce in potential consumers of those services may make them more likely to engage Odco to provide the services, but none of the misconceptions impairs consumers' capacity to evaluate the commercial worth of the services.
Mr. Lloyd, Q.C. pointed out that the applicants claim damages for the tort of defamation alleged to have been committed by publication of section 6 and that the meanings attributed for the purposes of that tort are those attributed for the purposes of the cause of action alleged under the Trade Practices Act. He submitted that statements of legal principles in Church of Scientology of California Inc. v. Reader's Digest Services Pty. Ltd. (1980) 1 NSWLR 344 provided considerations which required the dismissal of the motion. In that case Hunt J. observed ((1980) 1 NSWLR at 349:
"(10) I accept as the settled law that the power to grant interlocutory injunctions in defamation cases must be exercised with great caution, and only in very clear cases. A plaintiff must establish that a subsequent finding by a jury that the matter complained of was not defamatory of him would be set aside as unreasonable; that there is no real ground for supposing that the defendant may succeed upon any defence of justification, privilege or comment, and that he, the plaintiff, is likely to recover more than nominal damages only. In particular, questions of privilege and malice are not normally appropriate to be decided upon an interlocutory application. Nor will an injunction go which will have the effect of restraining the discussion in the press of matters of public interest or concern. This principle has been extended to discussion of such matters in books.
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(12) The plaintiffs have submitted that these principles, which represent a departure from those upon which interlocutory injunctions are normally granted, should not be followed, and that the ordinary 'balance of convenience' rule should be applied as laid down in Beecham Group Ltd. v. Bristol Laboratories Pty. Ltd.
(1968) 118 CLR 618 at 622, 623. According to the judgment in that case, the Court addresses itself to two main inquiries. The first is whether the plaintiff has made out a prima facie case, in the sense that, if the evidence remains as it is, there is a probability that, at the trial of the action, the plaintiff will be held entitled to relief. The second is whether the inconvenience or injury which the plaintiff would be likely to suffer, if an injunction were refused, outweights or is outweighed by the injury which the defendant would suffer, if an injunction were granted.
(13) I do not understand the decision of the High Court in that case as having been intended to overrule, without any reference to the long line of authority in the Court of Appeal in England and elsewhere, the wellknown special exception in defamation cases, where a balance is sought to be drawn between the defendant's right to freedom of speech and the plaintiff's right to an uninjured reputation.
(14) The same submission had been made by the plaintiff in Bonnard v. Perryman (1891) 2 Ch 268 at 281. The full Court of Appeal in that case reviewed the previous decisions and upheld the special exception in defamation cases. That special exception has been applied ever since, despite further attempts to return the test to the ordinary balance of convenience rule : see, eg, J. Trevor & Sons v. Solomon (Court of Appeal, The Times, 16th December, 1977).
(15) Moreover, the special exception has continued to be applied in Australia since the decision of the High Court in Beecham's Case
(1968) 118 CLR 618 at 622, 623 and notwithstanding that decision. Most judgments refer only to the line of authority of which Bonnard v. Perryman (1891) 2 Ch 269 is the leading case. Some identify the distinction between that line of authority and that of which Beecham's case (1968) 118 CLR 618 at 622, 623 is the leading one : eg, Edelsten v. John Fairfax & Sons Ltd. (1976) (1978) 1 NSLWR 685.
(16) In Gabriel v. Lobban (1976) VR 689 at 690, 693 Menhennitt J. sought to demonstrate that there was in truth no distinction between the two lines of authority. According to his Honour, if the defendant on the application makes out a prima facie defence, then the plaintiff has not shown that at the trial of the action he will be held to be entitled to relief. He has thus failed to satisfy the first of the inquiries posed in Beecham's case
(1968) 118 CLR 618 at 622, 623.
(17) Whether defamation cases form a special exception to the ordinary balance of convenience rule, or whether in truth they fit, albeit somewhat uncomfortably, within that rule in the way suggested by Menhennitt J. (1976) VR 689 at 690, 693 the result in most cases will, in my view, be the same. However, I propose to treat defamation as forming a special exception to the general rule.
(18) That special exception cannot be avoided by the simple expedient of framing the plaintiff's case, not in defamation, but in injurious falsehood or otherwise; nor will an injunction be granted in other cases where its effect would be the same as an injunction which would not have been granted had the claim been made in defamation : Fraser v. Evans (1969) 1 QB 349 at 362; Hubbard v. Vosper (1972) 2 QB 84 at 97; Woodward v. Hutchins (1977) 1 WLR 760 at 764. It is otherwise where the cause of action other than defamation, does not involve any concept of free speech and discussion, or the so-called liberty of the press. I attempted to draw the distinction, and to explain it, in my judgment in Swimsure (Laboratories) Pty. Ltd. v. McDonald (1979) 2 NSWLR 796 at 801."
In the latter case a trade competitor of the plaintiff had said to distributors of the kind of products both of them manufactured and sold by wholesale that a new product of the plaintiff was not suitable for the purpose for which it was intended, that it had not been passed for sale by the New South Wales Health Commission "and that statements made by the plaintiff in relation to it were completely untrue in relation to its safety and effectiveness. In giving judgment on the plaintiff's claim for interlocutory injunctive relief Hunt J. observed ((1979) 2 N.S.W.L.R. at 799-801).
"The plaintiff's causes of action were stated to be defamation and slander of goods or, as Sir John Salmon preferred to call it, injurious falsehood. The elements of the latter cause of action, an action on the case at common law, consist of a statement of and concerning the plaintiff's goods which is false (whether or not it is also defamatory of the plaintiff) published maliciously and resulting in actual damage : Ratcliffe v. Evans (1892) 2 Q.B. 524, at pp. 527, 528. The actual damage done is said to be the very gist of the action.
I was not prepared to grant the interlocutory injunction in relation to the claim in defamation. It is settled law that the power to grant such relief in defamation cases must be exercised with great caution, and only in very clear cases. A plaintiff must establish that a subsequent finding by a jury that the matter complained of was not defamatory of the plaintiff would be set aside as unreasonable; that there is no real ground for supposing that the defendant may succeed upon any defence of justification, privilege or comment, and that the plaintiff is likely to recover more than only nominal damages : Stocker v. McElhinney (No. 2) (1961) 79 WN
(NSW) 541, at p 544. That decision of Walsh J. has justifiably been described as the locus classicus for Australia; it has been followed on many occasions and in various jurisdictions. The Australian cases have recently been conveniently collected by Zelling J. in Lennox v. Krantz (1978) 19 SASR 272, at p 276. The English authorities to the same effect were also conveniently collected by Yeldham J. some two years earlier, but reported only recently, in Edelsten v. John Fairfax & Sons Ltd. (1978) 1 NSWLR 685, at p 690 et seq.
In the present case, it could not, in my view, be said that a finding that what was said by the first defendant was disparaging only of the plaintiff's product would be set aside as unreasonable. There is also at least some prospect - I put it no higher - of a defence of privilege succeeding, although subject to the possibility of defeat by a finding of malice.
I was, nevertheless, persuaded that the special exception applicable to defamation actions from the ordinary 'balance of convenience' rule in applications for interlocutory injunctions does not necessarily also apply in actions for injurious falsehood.
I should state straight away that I recognize that a plaintiff cannot avoid that special exception merely by framing his case, not in defamation, but in injurious falsehood or otherwise : Fraser v. Evans (1969) 1 QB 349, at p 362; nor will the Court grant an injunction in such other cases, where its effect would be the same as an injunction which the Court would not grant in defamation : Woodward v. Hutchins (1977) 1 WLR 760, at p 764; (1977) 2 All ER 751, at p 755.
It is, however, important to understand the reason why this special exception applicable to defamation actions exists, and thus why the Courts have applied that exception as well to other causes of action, in order to ensure that the plaintiff does not escape it by suing upon a different cause of action.
The leading authority in England remains the decision of the full Court of Appeal, composed of the Lord Chief Justice, the Master of the Rolls and four other Lord Justices in Bonnard v. Perryman (1891) 2 Ch 269. The judgment of Lord Coleridge C.J., in which four other members of the Court concurred, said (1891) 2 Ch. 269 at p.284: 'But it is obvious that the subject-matter of an action for defamation is so special as to require exceptional caution in exercising the jurisdiction to interfere by injunction before the trial of an action to prevent an anticipated wrong. The right of free speech is one which it is for the public interest that individuals should possess, and, indeed, that they should exercise without impediment, so long as no wrongful act is done; and, unless an alleged libel is untrue, there is no wrong committed; but, on the contrary, often a very wholesome act is performed in the publication and repetition of an alleged libel. Until it is clear that an alleged libel is untrue, it is not clear that any right at all has been infringed; and the importance of leaving free speech unfettered is a strong reason in cases of libel for dealing most cautiously and warily with the granting of interim injunctions.'
That, it should be pointed out, was a newspaper case, as was the earlier decision of the Court of Appeal, this time comprised of only two members, in Liverpool Household Stores Association v. Smith (1887) 37 Ch D 170, at p 182, in which Cotton LJ. expressed the opinion that it would be very inadvisable to grant any injunction which would restrain fair discussion in the newspapers of matters of importance, for the newspapers occupied a peculiar position, especially with regard to matters concerning the interest of those amongst whom they circulated.
The special exception to the balance of convenience' rule is not, of course, restricted to newspaper cases. In Quartz Hill Consolidated Gold Mining Co. v. Beall (1882) 20 Ch D 501 the Court of Appeal upheld an appeal against the grant of an injunction where the matter complained of consisted of a circular to the shareholders of a company urging its dissolution or reconstitution and expressed to have been published in order to protect the common interests of the defendant's clients, who were shareholders, and the persons to whom it was published. The principal reason for the decision, agreed to by each of the three members of the court, was the difficulty of deciding whether the occasion of the publication was privileged upon an interlocutory application.
It is difficult, if not impossible, to see how these concepts of free speech and discussion and the liberty of the press can be involved in the ordinary slander of goods action. The conflict in defamation actions between the plaintiff's right to his umblemished reputation, and the defendant's right publicly to discuss all matters of public interest simply does not arise in an action for slander of goods. The issue is not whether the defendant, in disparaging the plaintiff's goods, had a right or a privilege to do so, but rather whether he has done so maliciously and whether, in doing so, he has caused actual damage to the plaintiff.
In framing its action as one for slander of goods, so far as the matter complained of consists of a disparagement of its product in this case, the plaintiff is not avoiding an action for defamation, and the special exception to the balance of convenience' rule in granting interlocutory injunctions. No such action is fairly open to the plaintiff in relation to that disparagement, although clearly it has an arguable case in defamation so far as its own conduct is also disparaged. An injunction limited to the disparagement of the plaintiff's goods does not, in my opinion, have the effect of an injunction which the Court would not grant in defamation. There is, as I have said, no question of free speech and discussion and no question of the liberty of the press involved.
Some of the other categories of the tort of injurious falsehood may not similarly be exempt from the balance of convenience' rule; what I have said must be understood as being limited in its application to the particular tort of slander of goods.
In the present case I must, therefore, address myself to the two main inquiries to be considered in applications for interlocutory injunctions in any case other than defamation."
In this case I shall assume, but without expressing any opinion, that a finding at trial that the matter complained of was not defamatory of either applicant would be set aside as unreasonable. The evidence before me does not justify a conclusion - and Dr. Emmerson did not suggest - that there is no real ground for supposing that a respondent may succeed in the proceeding for defamation upon a defence of justification, privilege or comment. Each of Messieurs Groves and Boas has sworn that he will at trial give and adduce evidence to prove the truth of the allegations of fact in section 6 and will "rely if necessary on the further defences of fair comment and qualifiedo privilege".
I respectfully accept as substantially correct what I have quoted from the two judgments of Hunt J. The application of those principles to the circumstances of this case should in my opinion commence with an acknowledgment that the formulation of the applicants' claims for contravention of s.52 of the Trade Practices Act 1974 is not to be characterized as in any sense an expedient or an avoidance of what Hunt J. calls "the special exception to the 'balance of convenience' rule in granting interlocutory injunctions". What the legislature has provided in that Act, and particularly in s.80 thereof, is not to be denied or limited by reason of the circumstance that the conduct on which a claim for the relief prescribed by sub-section 80(2) is based happens also to constitute the tort of defamation. But in my opinion the considerations of public interest in the free discussion of certain subjects which underlie the principles informing what may conveniently, if not altogether accurately, be called "the special exception" are considerations relevant also to the exercise of the discretionary power conferred by sub-section 80(2). In Commercial Bank of Australia Ltd. v. Insurance Brokers Association of Australia (1977) 16 ALR 161 the respondents had published in a newsletter allegations that the applicant bank was involved in attempting to enter the insurance market, which was illegal, that officers of the bank were exerting pressure on customers to arrange insurance with its subsidiary and that confidential information was being used improperly by the bank. The applicant brought a proceeding alleging that the publication of those allegations constituted contraventions of s.52 of the Trade Practices Act 1974. In giving his reasons for restraining until trial further publication of such allegations, Bowen C.J. observed (16 ALR at 167-170):
"It is necessary to say something at the outset about the task of the Court in approaching a claim for interim relief. Under s.80 of the Trade Practices Act, it is provided that the Court may, on the application of the Minister, the Commission, or, subject to an immaterial qualification, any other person', grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of the provision of Pt V of the Act which includes s.52. It is apparent that in some cases where a private person brings the proceedings, that person may be endeavouring to protect his own proprietary interest. This is so where, for example, a plaintiff seeks to restrain the misleading conduct in the course of trade or commerce which results in the goods of another being passed off as his goods, thereby causing him loss and damaging his goodwill. On the other hand, there are cases where no proprietary interest is involved but what is sought to be protected is the interests of consumers, that is, the public, and to protect them from being misled in the course of trade or commerce. The nature of the claim which is made in any particular case will, of course, have a bearing on the approach which the Court has to make to the question whether or not it should grant an injunction. This is particularly so in relation to the matter of interim injunctions. Section 80(2) is as follows:-
(2) Where in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under sub-section
(1)'.
It is clear that the Court has a wide discretion whether or not it will grant an interim injunction under this provision. It is also clear, in my view, that the injunction referred to is not interim in the more limited sense in which this word is sometimes used, but empowers the Court, in effect, to grant an interlocutory injunction pending the final hearing and determination of the issues.
Although the Court has a discretion, it is a discretion to be exercised not arbitrarily but in accordance with principle. Broadly speaking, it may be said that the Court, in dealing with the matter on an interim or interlocutory basis, is inevitably faced with the problems which courts for some time have been faced with in this situation. The problem is one of having regard to all the interests involved in the interim period prior to the determination of the facts at the hearing of the matter in order to decide what should fairly be done in the meantime. Where a proprietary interest the subject of the proceeding is involved, the equitable principles which relate to the cases in which the Court will step in to protect the proprietary interest so that it will not be destroyed prior to the hearing of the matter, would no doubt be relevant. Indeed, this Court will pay considerable regard to the principles adopted by courts of equity and other courts in considering whether interim relief by way of injunction should be granted. The special consideration which enters into the matter in the cases dealt with by this Court is that it is dealing with interim relief in relation to sections which are designed to protect the public interest.
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If a prima facie case is shown, the Court will then move to consider the balance of convenience. In some cases, the considerations which then aply for determining the balance of convenience, will be very similar to those which apply in a court of equity. In other cases, where the public interest is involved, it may be necessary to weigh the public interest against a countervailing public interest or a private interest. In a case such as the present, as it applies to Specialist Newsletters, there would be room at that point for considering the public interest in relation to freedom of speech, which common lawyers have adverted to in relation to the grant of interim injunctions in defamation cases.
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Another matter to be considered is that in bringing their motion for an injunction, the applicants may be regarded as seeking to protect the public interest in preventing the making of false statements, but it is difficult to attach much weight to this in advance of a final determination being arrived at as to whether the statements are in fact false or not. Another element of public interest is that matters of this type should, it is submitted, be open for public discussion, particularly in view of the fact that some persons may consider that an amendment of the law is required. However, where the statement relates to a matter which is in issue in proceedings, there is, I think, less force in this consideration."
The proceedings to which his Honour referred had been brought against the bank by two of the respondents immediately before publication of the allegations against the bank. Those two respondents alleged in those proceedings exclusive dealing by the bank in contravention of s.47 of the Trade Practices Act 1974. See also Insurance Commissioner v. Australian Associated Motor Insurers Ltd. (1982) 45 ALR 39.
In this case the publication of what is alleged in section 6 of the brochure, while it may be conduct in trade or commerce, misleads no consumer about goods or services. It causes damage for which each applicant can probably be adequately compensated by an award of damages, whether upon the cause of action given by Part VI of the Trade Practices Act 1974 or upon the cause of action for defamation. There is in my opinion a substantial public interest in the publication of the allegations, if they should prove to be correct. There is in my opinion a substantial public interest in public dissemination and discussion of the allegations, as tending to inform the public that they are made and as tending to elicit, from persons who may have knowledge by reference to which the allegations may be proved or disproved, communications of that knowledge to interested persons. There is of course a strong public interest to attempt to ensure that false allegations of wrongdoing by public authorities and public officials do not gain credence. But, if these allegations be false, I think it doubtful whether in all the circumstances of this case interlocutory injunctive restraint would serve that interest better than the lack of that restraint. Restraint by curial order might breed whispering in corners, to the greater detriment of the applicants than they are likely to suffer by further publication of matter which they are free to stigmatise as false and to declare to be the subject of this proceeding for damages.
On balance I think that no order of the kind for which the applicants move should be granted. The motion will be dismissed.
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