Craftsman Homes Australia Pty Limited & 3 Ors v TCN Channel Nine Pty Limited & 2 Ors - [2006] NSWSC 519

CITATION: Craftsman Homes Australia Pty Limited & 3 Ors v TCN Channel Nine Pty Limited & 2 Ors [2006] NSWSC 519
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 8-19 November 2004, 7-15 February 2005, 22-23 March 2005, 12 & 15 April 2005

JUDGMENT DATE :
2 June 2006

JUDGMENT OF: Smart AJ at 1

DECISION: See paras 1075 to 1077

CATCHWORDS: Defamation - Two National telecasts (Promo & Program) - Imputations in context - ambit of imputations - defence of substantial truth and matters of public interest - extended review of construction of four houses - statutory defence of comment in NSW and corresponding defences in other States and Territories - proper material for comment, public interest, comment of defendant, of servant or agent and of stranger - facts sufficiently stated or identified - Trespass at Edmondson Park - Mr Cox lessee of premises - whether his companies had sufficient title to sue - bad instance of tort - compensatory, aggravated and exemplary damages awarded - Trespass at the Mosses - whether Ilvarity in possession at time of alleged trespass when off site for over 18 months - construction of building agreement - Ilvarity not in possession and at best entitled to possession when suspension of contract ceased - insufficient title to sue - False Representation and Misleading and Deceptive Conduct established - These causes of action available - plaintiffs not limited to damages for defamation and trespass but double counting avoided - Operation of s 65A of Trade Practices Act and corresponding State Acts - Promo was advertising - Causation under legislative causes of action - false representations etc enabling greater attack on plaintiffs by telecaster enhancing program

LEGISLATION CITED: Criminal Code Act Compilation 1913
Defamation Act NSW
Environmental Planning & Assessment Act
Fair Trading Act 1987 (NSW)
Home Building Construction Act [1989]
Occupational Safety & Welfare Act
Environmental Planning and Assessment Act
Queensland Defamation Act 1889
Trade Practices Act 1974 (Cwth)
Workcover and Occupational Safety and Welfare Act

CASES CITED: Bellino v Australian Broadcasting Corporation (1995-1996) 185 CLR 183
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Enzed Holdings Ltd v Winthen Pty Ltd 57 ALR 167
Gray v Motor Accident Commission (1998) 196 CLR 1
Greek Herald Pty Limited v Nikolopoulos (2001) 54 NSWLR 165
Harris v Digital Pulse Pty Ltd (2002-2003) 56 NSWLR 298 at 342-346
Harris v McKenzie (1987) 9 NSWLR 139
Hawke v Tamworth Newspaper Co [1983] 1 NSWLR 699
Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) 8 IPR 25
Hunt v Star Newspaper Company Limited 1908 2 KB 309
Jones v Schiffmann (1971) 124 CLR 303
Lamb v Cotogno (1987) 164 CLR 1, Lloyd (1985) 3 NSWLR 728
Marks v GIO Australia Holdings Ltd & Ors (1998) 196 CLR 494
McIntosh v Lobel (1993) 30 NSWLR 441
Musca v Astle Corp Pty Ltd (1988) 80 ALR 251
NSW Aboriginal Council v Perkins (1998) 45 NSWLR 340
Newington v Windeyer (1985) 3 NSWLR 555
Newcastle City Council v Royal Newcastle Hospital 100 CLR 1
Pervan v North Queensland Newspaper Co Ltd (1994) 68 ALJR 1
Peter Walker and Son Ltd v Hodgson 1909 1 KB 239
Polly peck (Holdings) PLC v Trelford 1986 1 QB 1000
Radio 2UE v Parker 29 NSWLR 448
Re Ku-Ring-Gai Co-oP 36 FLR 134
Sattin v Nationwide News (1996) 39 NSWLR 32
Sims v Wran 1984 1 NSWLR 317
TCN Channel Nine Pty Limited v Anning (2002) 54 NSWLR 333
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Wheat v C. Lacon and Co Ltd 1966 AC 552
XL Petroleum v Caltex Oil (1985) 155 CLR 448
Yorke and Anor v Lucas (1985) 158 CLR 661

PARTIES: Craftsman Homes Australia Pty Limited (First Plaintiff) Ilvarity Pty Limited T/as Craftsman Homes Northern Rivers & Craftsman Homes South West Sydney (Second Plaintiff) & Frederick Robert Cox (Third Plaintiff) v.TCN Channel Nine Pty Limited (First Defendant) (TCN9) Mike Munro (Second Defendant) & Ben Fordham (Third Defendant)

FILE NUMBER(S): SC 20085/02

COUNSEL:
(P) J Garnsey QC & B Kinsella
(D) B McClintock SC & M Richardson

SOLICITORS: (P) G Donaghy & Co
(D) Gilbert & Tobin

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

SMART AJ

Friday, 2 June 2006

INDEX

PAGE

Introduction 1

Trespasses – Edmondson Park & The Mosses 3

The Defamations and Imputations 4

Defamation Defences 10

False Representation or Misleading and Deceptive Conduct 11

Defences to False Representation etc 13

Mr and Mrs Moss

18 Nov 99 – 24 June 00 14

27 June 00 – 8 July 00 23

Mr Nowlan 34

13 July 00 – 15 Sept 00 36

HOW Claim & Aftermath 38

3 May 02 – 23 Dec 02 42

3 Feb 03 – 7 May 03 55

Sundry Matters 57

Monteith Report & Evidence 68

Neil Report & Evidence 80

Weir Reports 81

The Plaintiff’s Evidence as to Mosses 82

Mr Harley 91

Mr Cox 92

Mr Chaseling 116

Plaintiff’s Contentions 141

Referee's Report 144

McDonald Report superseded 147

Some Findings as to Crandon report and evidence 147

Defendants' Comments Upon Plaintiffs' Responses to

Alleged Justification of Imputations – Moss 149

Mrs Moss Not Called 156

Conclusions as to Mosses' Home 156

Unfitness to remain in Building Industry – Mosses 157

Mr and Mrs Allan 163

The late Mr Allan's statements 163

Mrs Allan 166

Mr Crandon 169

Mr Lee 171

Mr Harley 175

Mr Chaseling 178

Mr Cox 178

Footings Piers and Bearers 183

Shoddy Building 184

The Vimpanys 187

The Brickwork 188

Cleaning of bricks 191

Meter Box 192

Error by Vimpanys - Lifting Tiles 193

Mr Chaseling 194

Mr Cox 194

Shoddy Building 200

Unfitness 202

The Willoughbys 204

McLisky Report 204 Crandon Report 206

Aungle Report 207

Dept of Fair Trading 209

Mr Cox 211

Mr Chaseling 215

Mr Crandon 215

Shoddy Building 219

Unfitness 220

Overall View 221

Truth 222

Unfitness 222

Incompetence & Shoddy Building

Practices 222

Width of Imputations 224

Public Interest 230

Contextual Truth 232

Comment 232

Facts Truly Stated or Sufficiently Identified 237

Opinions Honestly Held 243

Public Interest 244

Statutory Defence of Comment in NSW 244

Statutory Defence of Comment Queensland 246

Tasmania 247

Western Australia 248

Comment at Common Law 248

Conclusions as to defamation defences 251

Trespass – Edmondson Park 251

Is Mr Munro Liable for the Edmondson Park Trespass 263

Damages for the Edmondson Park Trespass 264

Alleged Trespass at the Mosses 272

False Representation and Misleading and Deceptive Conduct 276

Damages 297

Verdicts 308

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

DEFAMATION LIST

SMART AJ

Friday, 2 June 2006

CRAFTSMAN HOMES AUSTRALIA PTY LIMITED (First Plaintiff) ILVARITY PTY LIMITED T/as CRAFTSMAN HOMES NORTHERN RIVERS and CRAFTSMAN HOMES SOUTH WEST SYDNEY (Second Plaintiff) and FREDERICK ROBERT COX (Third Plaintiff)

TCN CHANNEL NINE PTY LIMITED (First Defendant) (TCN9) MIKE MUNRO (Second Defendant) and BEN FORDHAM (Third Defendant)

JUDGMENT

Introduction

1 These proceedings for trespass and defamation arise out of the entry, by a ruse, of a TCN9 reporter (Ben Fordham) and TCN staff into premises leased by Mr Cox at Edmondson Park on 22 February 2002, the entry by the same reporter and TCN staff upon premises owned by Mr and Mrs Wayne Moss at Alstonville earlier in February 2002, a promotional film screened on TCN 9 on A Current Affair (ACA) on 26 February 2002 (the promo) and the program screened on TCN 9 ACA on 27 February 2002 (the program). There are also claims based on alleged false representations and alleged misleading and deceptive conduct.

2 All three plaintiffs are engaged in the building industry. The first plaintiff carries on the business of a franchisor, with franchises throughout Australia. The second plaintiff carries on a building business in the Northern Rivers and South West Sydney regions, operating under the umbrella of the first plaintiff. The third plaintiff, Mr Cox, was the managing director of both companies. During the proceedings reference was often made to the second defendant as Craftsman Homes (CH) and Ilvarity and less frequently Craftsman Homes Northern Rivers.

3 In 2002 Ilvarity and Mr Cox operated from premises at 250 Jardine Avenue, Edmondson Park, a little south of Liverpool and Craftsman Homes Australia Pty Ltd did so to a lesser extent. All the plaintiffs also operated from office premises at Alstonville. The premises at Edmondson Park comprised a spacious house on a five acre block which was used in part as a Sydney office for the Craftsman Homes companies and by Mr Cox. He was the lessee of that property and resided there for four or five days during the week. His permanent residential dwelling was in the Lismore District. His daughter Desley, who did some of the paper work for the business also resided at the Edmondson Park premises in 2002.

4 The first defendant (TCN Nine) is the proprietor of Channel Nine, a major television network operating throughout much of Australia. The second defendant, Mr Munro, was the presenter of ACA. The third defendant, Mr Fordham, was the reporter for the relevant segment. ACA is shown on most nights at 6.30pm immediately after the national news in what has been described as "prime viewing time".

5 The defendants decided to run a segment on ACA which was critical of the building work and conduct of Craftsman Homes Northern Rivers ("CHNR") and Mr Cox following on interviews with a number of building owners who were very dissatisfied with the work performed by or on behalf of CHNR. Representatives of TCN Nine endeavoured to arrange an interview with officers of CHNR, and particularly Mr Chaseling, a senior officer. There was some correspondence. The officers of CHNR at Alstonville wanted to know the questions to be raised so that they could refresh their memories from the files and reacquaint themselves with all the details. This did not appeal to the ACA staff and an impasse developed.

6 The ACA staff decided that they wanted to speak to Mr F R Cox, the principal behind the first and second plaintiffs and confront him with a number of allegations which reflected adversely upon him and CHNR. Mr F R Cox was thought to be unlikely to agree to such an interview. Perhaps TCN Nine primarily wanted to show viewers the chief executive of the offending company. Sarah Stinson, a lady employed or retained by TCN Nine telephoned CHNR at Alstonville and discussed with Ms J Santin, a sales lady, building two houses in that area. Ms Stinson insisted that she needed to speak to a builder and to see someone in Sydney. This was a stratagem. Ms Santin told Ms Stinson that her (Santin’s) boss was in Sydney and gave Ms Stinson Mr Cox’s telephone number. Ms Stinson telephoned Mr Cox and made an appointment with him for her and her husband to discuss the construction of a Craftsman home.

The Trespasses – Edmondson Park & The Mosses

7 On the appointed day (22 February 2002) Ms Stinson arrived at the Edmondson Park premises accompanied by a man now known to be Mr Ben Fordham. They discussed the strategy they would use. Ms Desley Cox admitted them to the house. They were expected and they gave the appearance of a young couple interested in building a home. Ms Stinson was carrying a bag in which there was a camera and recorder. They were not obvious. After introductions and pleasantries in which no mention was made that Ms Stinson and Mr Fordham were from TCN Nine, Ms Cox took them through to the office area of Mr Cox. There were further introductions and while the correct names were used there was no hint that Ms Stinson and Mr Fordham were from TCN Nine. Mr Fordham apologised for leaving his phone on, explaining that he was working and not supposed to be there. Ms Stinson and Mr Fordham indicated that they were interested in building in Lennox Head or ‘that sort of area’. During some further discussion Mr Fordham’s mobile telephone rang and while Ms Stinson and Mr Cox talked, Mr Fordham attended to his telephone call. Mr Fordham walked across to the front door of the house and admitted a TCN Nine crew with a camera (or cameras) and a microphone (or recorder). Mr Fordham walked across from the front door, stood in front of Mr Cox’s desk in the office area and said, “Fred, I just want to ask you a couple of quick questions, we’re from A Current Affair”.

8 Mr Cox was shocked and horrified by the deceitful ambush and ropeable. He decided to listen and see what was going to transpire. When Mr Fordham made assertions about the Mosses’ contract and buildings Mr Cox declined to comment, left the office area and telephoned Mr Chaseling and talked with him. After that Mr Cox told Mr Fordham, Ms Stinson and the television crew to leave. Mr Cox said that Mr Fordham and the television crew stood outside the front door for quite some time. At the front door Mr Fordham sang out "Fred, we would like to give you a chance to tell your side of things if you want to come out here and have a chat, probably better than running away" and "Fred, Fred come out and have a chat, we are not going to stitch you up." Mr Cox did not believe this last remark. He believed that if he went out there he "would be stitched up really well." The evidence of Mr Cox on these points was not contradicted, but it was contended that neither of the companies could sue in respect of the trespass as neither was in possession of the premises. Mr Cox was the tenant.

9 That is a brief summary of the principal trespass. CHNR relied on a further alleged trespass. It allegedly occurred when Mr Moss took Mr Fordham and the Channel 9 television crew onto his property to show and explain the allegedly faulty building work performed by CHNR. It and Mr Cox relied on the terms of the building contract under which CHNR was given exclusive possession of the property of Mr and Mrs Moss. The defendants contend, amongst other matters, that there was no trespass. It will be necessary to examine the contract and the events which occurred.

The Defamations and Imputations

10 I have seen the promo and the program several times. The promo began with Mr Munro introducing the item followed by snatches from film which had been taken by TCN9. Ian Vimpany, Wayne Moss, Gloria Vimpany and Noel Allan (now deceased) were dissatisfied building owners and a remark is attributed to each of them.

11 The second part of the promo records conversation between Messrs Fordham and Cox after Mr Fordham had obtained access to the Edmondson Park premises.

Text of Promo:

1. Mike Munro Well he's an award winning builder but you certainly wouldn’t know it looking at some of his work; tomorrow night we investigate some of his shoddy practices which have left home owners high and dry.

2. Ian Vimpany Within 2 months of moving in here these tiles have fallen off.

3. Wayne Moss This problem is a result of the floor being put down incorrectly.

4. Gloria Vimpany I nearly had a nervous breakdown when they did it.

5. Noel Allan I think I have had over 100 complaints, I mean we can't list them all here with you.

6. Wayne Moss I cannot believe that anyone can build something like this and remain in business.

7. Ben Fordham
To Vimpany Have you given up?

8. Ian Vimpany Yes we've given up.

9. Video of "Craftsman Homes" signage

10.
Voice Over

11. Fred Cox I'm sorry.

12. Ben Fordham Can we just ask you a couple more quick question?

13. Fred Cox No.

14. Ben Fordham You don’t want to answer the questions, you want us to go?

15. Fred Cox Get out or I'll call the police.

16. Mike Munro Ben Fordham with that investigation tomorrow.

12 The program contains the presenter's introduction, some conversation between Messrs Fordham and Cox, statements of the dissatisfied building owners, observations of Mr Fordham, further conversation between Messrs Cox and Fordham, conversation between Miss L Wilton, a former employee of the second plaintiff and Mr Fordham, further statements by the dissatisfied building owners and the presenter’s concluding remarks. The accompanying visual images reinforced the complaints.

Text of Program:

1.	Mike Munro	Now to a builder who's won several awards during his twenty years in the business. But all that is cold comfort to some of his latest customers because they claim that he has left them with their dream homes that are riddled with faults and it can take years to get commitments to fix them
2.	Ben Fordham	Are you signing up a new business in Sydney?
3.	Fred Cox	Am I?
4.	Ben Fordham	Mmmmm
5.	Fred Cox	Why?
6.	Ben Fordham	Well you've left a trail of devastation on the North Coast of New South Wales.
7.	Fred Cox	I don't think I have, I've got nothing to say to you.
8.	Ben Fordham	Are you proud of the houses you build?
9.	Fred Cox	Yep.
10.	Ben Fordham	All of them?
11.	Fred Cox	Yep
12.	Ben Fordham	Fred Cox may be proud of his handiwork but some of his customers are far from satisfied.
13.	Wayne Moss	What is behind us here is nothing more than a litany of errors and mistakes that no self respecting trades person would ever do.
14.	Noel Allan	In all I think we've had over 100 complaints I mean we can't list them all here with you.
15.	Gloria Vimpany	I've nearly had a nervous breakdown over the bricks because it was a great disappointment. This was the last home we're going to build and we really want to get it right.
16.	Ben Fordham	But according to Gloria and Ian Vimpany Craftsman Homes Northern Rivers made obvious mistakes. For starters they say the brickwork was supposed to be this colour (indicating) but many were laid the wrong way around.
17.	Gloria Vimpany	We went to a lot of trouble to get these to get really nice bricks that we liked, we paid a lot more for them and to have them so poorly laid was a great disappointment.
18.	Wayne Moss	We have a patio which has been put down on fibro sheeting which was mounted on green timber. The green timber has shrunk leaving a brick wall hanging in mid air.
19.	Ben Fordham	Wayne and Jacquie Moss have been waiting more than two years for their home to be completed on the New South Wales North Coast.
20.	Wayne Moss	This ah problem here is a result of the floor being put down incorrectly. The floor has buckled and it is also pushed the wall right out of align.
21.	Jacquie Moss	They totally ignore us they have not replied we have pages and pages and pages of grievances and [points] that we wanted addressed not one has ever been answered.
22.	Wayne Moss	At the last minute they rushed back and they put these engaged piers in and this is what we've got as a result of it. These engaged piers are a complete waste of time they are doing absolutely nothing to strengthen this wall.
23.	Ben Fordham	The Mosses halted payment so now Craftsman Homes Northern Rivers is taking them to Court. They've launched a cross claim seeking damages over delays and poor workmanship. The matter is listed for hearing next month.
24.	Jacquie Moss	It's placed an enormous strain on our whole family we just wanted to be on our block of land in our own home and to get on with our lives.
25.	Fred Cox	The Moss's is not up for comment I'm sorry.
26.	Ben Fordham	They've been waiting two years to get into their place.
27.	Fred Cox	Well.
28.	Ben Fordham	I've had a look at it and it's a disgrace.
29.	Fred Cox	I'm sorry.
30.	Ben Fordham	Can we just ask you a couple more quick questions?
31.	Fred Cox	No, and if you don't leave I will call the Police.
32.	Ben Fordham	You want us to go?
33.	Ian Vimpany	The whole wall was left very messy covered in cement um … I've taken it on myself to clean the top part of the wall. But the bottom half of the wall I've left so we can show what a mess they did leave the bricks in and that appears right around the house in places.
34.	Leanne Wilton	He treated his customers like they were nothing um yeh he was just horrible.
35.	Ben Fordham	Why did you start to have concerns?
36.	Leanne Wilton	I noticed him ripping up documents, variations the clients had done um denying he ever said things he did.
37.	Ben Fordham	Leanne Wilton used to be a sales rep for Fred Cox but says she quit after a heated argument over her allegations he was overcharging clients.
38.	Leanne Wilton	One client actually did a handshake deal on some fill that was needed on his block to raise it to a floor level and they agreed that it would cost five thousand dollars um it actually blew out by about seven thousand dollars Fred never phoned them to tell them that it was actually blowing out so they just basically got a bill to say its now thirteen grand instead of five.
39.	Ben Fordham	But he knew all along that it was going to be thirteen thousand?
40.	Leanne Wilton	Oh yeh definitely oh yeh.
41.	Ben Fordham	What would happen if a customer complained?
42.	Leanne Wilton	If ever anyone hassled him about when they were getting to site then they would be put to last he'd go and start somebody else's.
43.	Ben Fordham	So people who complained were punished?
44.	Leanne Wilton	Oh definitely yeh.
45.	Noel Allan	Well before the house was started they submitted the wrong plans to the council.
46.	Ben Fordham	Noel and Ann Allan are also unhappy customers.
47.	Noel Allan	Let me show you an example of one of the problems we had with our house. The foundations are completely off centre to the footings and the bearers on top of the footings are completely off centre to the foundation blocks.
48.	Ben Fordham	They took Cox to the Fair Trading Tribunal and rectification work was carried out on a number of areas. Including the foundations. The Tribunal accepted a report by an engineer hired by Craftsman who declared that the rectified piers were adequate.
49.	Noel Allan	They say that's a proper concrete footing but it cannot be because I dug under there and put a bit of timber there's nothing there it only laying on top of the sand.
50.	Ann Allan	If you bought a brand new car and it was scratched and dinted and all that sort of thing you'd want a different car wouldn't you?
51.	Ben Fordham	The allegations we've put to Craftsman Homes Northern Rivers have all been rejected but Fred Cox refuses to give any further comment on camera despite our offers.
52.	Wayne Moss	Fred you know um the system very well you were right it did take two years, you could keep us off the job for two years but we will eventually get this house built.
53.	Mike Munro	We want to make it clear that Fred Cox runs only the Craftsman Homes Northern Rivers franchise in New South Wales. We are certainly not casting doubt on any other Craftsman Homes' franchises.

13 During the trial pursuant to s 7A of the Defamation Act 1974, Kirby J ruled that the first plaintiff was not capable of being identified in the two matters published and directed verdicts against the first plaintiff in respect of both publications. The jury found the following imputations were borne out by the promo:

Of the second plaintiff -

(a) that the second plaintiff was guilty of shoddy building practices

Of the third plaintiff -

(b) that the third plaintiff was guilty of shoddy building practices

(c) that the third plaintiff was incompetent as a building contractor

(d) that the third plaintiff was unfit to be allowed to remain in the business of building residential houses.

14 The jury found the following imputations were borne by the program as to the second and third plaintiffs -

(a) that (each of) the second and third plaintiffs constructs homes that are riddled with faults

(b) that (each of) the second and third plaintiffs is not competent in the business of building residential houses

Defamation Defences

15 As to the promo the defendants rely on the following defences:

Defamation Act

Defamation Act NSW

16 As to the program the defendants rely on the following defences:

Defamation Act, NSW;

“The second and third plaintiffs were unfit to be allowed to remain in the business of building residential houses.”

Polly Peck

Polly Peck (Holdings) Plc v Trelford

"Where a publication contains two or more separate and distinct defamatory statements, the plaintiff is entitled to select one for complaint, and the defendant is not entitled to assert the truth of the others by way of justification."

"Whether a defamatory statement is separate and distinct from other defamatory statements contained in the publication is a question of fact and degree in each case. The several defamatory allegations in their context may have a common sting, in which event they are not to be regarded as separate and distinct allegations. The defendant is entitled to justify the sting and once again it is fortuitous that what is in fact similar fact evidence is found in the publication.

(iii) On the statutory defences of comment and comment of a stranger in NSW and on the comparable interstate defences.

False Representation and Misleading or Deceptive Conduct

17 It was alleged that the first defendant by the third defendant and a female and the third defendant on or about 22 February 2003 knowingly falsely represented to the plaintiffs and each of them that the third defendant's name was John Stinson and that he was a prospective customer of the plaintiffs (or of one or more of them) and was seeking an appointment and meeting for the third defendant under that name and Sarah Stinson his wife with Mr Cox to discuss and obtain advice concerning the construction of a Craftsman home, intending to deceive each of the plaintiffs. It was alleged that in reliance upon the representation each of the plaintiffs agreed to the meeting and suffered loss and damage (para 13A).

18 The plaintiffs alleged that prior to 21 February 2002 the defendants by Mr Fordham requested the plaintiffs to grant an interview but thereafter failed and refused to meet all the conditions requested by the plaintiffs and in particular to provide particulars in writing of the questions to be asked to enable the plaintiffs to have available the relevant files (para 13B).

19 The plaintiffs alleged that the first defendant by itself, its servants or agent, Mr Fordham in trade and commerce engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Trade Practices Act 1974 (Cth) (TPA) and of s 42 of the Fair Trading Act 1987 (NSW) (FTA) (para 13C).

20 The plaintiffs further alleged that Messrs Munro and Fordham have aided, abetted, counselled, procured and induced and been directly and indirectly knowingly concerned in, the contravention by the first defendant of TPA, s 52 and FTA, s 42 within the meaning of TPA, s 75B and FTA, s 61 and were liable in damages for those contraventions (para 13C).

21 The plaintiffs further alleged that by publishing to the defendants by Mr Fordham the matters attributed to them in the promo and the program each of Wayne Moss, Jacquie Moss, Ian Vimpany, Gloria Vimpany and Noel Allan, in trade and commerce engaged in conduct that was misleading and deceptive in contravention of FTA, s 42 and that the defendants have aided, abetted, counselled, procured and induced and been directly or indirectly knowingly concerned in, the contravention by those persons of FTA, s 42 within FTA, s 61 and were liable in damages for those contraventions (para 13D).

22 The plaintiffs alleged that by reason of the trespass at Edmondson Park and at the Mosses' property and by the contravention of TPA, s 52 and FTA, s 42, the plaintiffs have suffered loss and damages (para 13E).

23 The plaintiffs claimed (para 14):

Defences to False Representation etc

24 The defendants denied the matters alleged in the paragraphs of the Third Amended Statement of Claim dealing with the alleged false representation and the alleged misleading or deceptive conduct (paras 13A, 13B, 13C, 13D, 13E and the damage claimed, para 14). In further answer to paras 13A, 13B, 13C and 13E the defendants say that any publication was a prescribed publication made by a prescribed information provider within the meaning of s 65A, TPA and that by reason of that provision they are not liable to the plaintiffs.

25 The defendants denied that Mr Ben Fordham was a servant or agent of Mr Mike Munro, but admitted that Mr Fordham is an employee of the first defendant (Channel 9).

26 Before discussing the various causes of action and the defences it is probably better to deal with the evidence relating to the three properties covered by the promo and the program and a fourth property not so covered. Those properties were the subject of much of the evidence. That evidence was at the heart of the plea of justification, particularly that relating to the Mosses.

Mr and Mrs Moss
18 Nov 99 – 24 June 00

27 The summary which follows outlines most of the major events in the extended history of the contract between the Mosses and CHNR, the construction of the Mosses’ house and the evidence as to it. Generally, a chronological approach has been adopted, but there are some exceptions. The Mosses entered into a contract with CHNR about 18 November 1999 for the construction of a substantial brick veneer home extending over two levels and comprising three bedrooms, dining, lounge and rumpus areas, a family area, kitchen, bathroom, en suite off the main bedroom with, on the lower level, garages and a workshop area. The contract price was $250,569. The home was to be built on a large rural residential allotment (about 3 ha) owned by Mr and Mrs Moss and known as Lot 1, Teakwood Drive Alstonville. The land was elevated, enjoyed good views and sloped. Also erected on the land in reasonably close proximity to the site of the proposed house, but about 100 metres separate from it, was a large shed. People moving in and around the shed and the grounds would not interfere in the construction of the house. The contract provided for payments of specified amounts as various stages of the works were completed.

28 Building approval was given by Ballina Shire Council about 10 January 2000 and the initial completion date was 10 July 2000. Substantial completion of the house by that date was important so that Mr and Mrs Moss did not become liable for the impending Goods and Services Tax, which would be payable on goods supplied and work carried out after 1 July 2000.

29 Mr Moss said that prior to signing the contract on 18 November 1999 he and his wife engaged in extensive discussion with Mr Cox as to how the house was going to be built and how the Mosses would maintain access to the property because they had a shed on it and equipment stored in it at the property. On the day the contract was signed they read through the contract and, after referring to a clause (cl 19), which purported to give exclusive possession of the land to CHNR, pointed out that they (the Mosses) required access. They had to be there to maintain the property of 6½ acres and they needed to get access to personal equipment in the shed all the time. Mr Cox replied that this would not be a problem.

30 Mr Moss said that during the conversation with Mr Cox on 18 November 1999 they spoke about Mr Moss having to supply water within 6 metres of the house. Mr Moss organised to get the water tanks and the water connected. He also needed access to the water. Mr Moss said that he mentioned that the Mosses were also supplying the vacuum cleaner, the ducted vacuum system and arranging to have the air conditioning put through the place and that he needed access to attend to these matters and instal the air conditioning. (see pp 5 & 6 of tender of CHNR of 17 November 1999). The tender of the builder did not include “Power to site”, “Water to building site” and “Extension of services to your block.” The tender provided, “Water tanks and pressure pumps supplied by owner, stormwater line within 10m of house, additional stormwater line and water return line by owner”.

31 Mr Moss said that in their preliminary discussions with Mr Cox the Mosses accepted his recommendation that the appropriate flooring was red iron bark and that was included in the tender (p3 Interior Features).

32 The Mosses decided to have standard grade flooring as distinct from select grade, but on the basis that Mr Moss would be able to go through the boards and pick out those with defects and place them aside to be put under wardrobes and cupboards, so that the defects would not be visible. The selection was to take place when the flooring was delivered to the site and before it was fixed. Conversations to this effect took place before the contract was signed.

33 Mr Moss said that at the time of signing the contract Mr Cox stated that it would take 12 to 16 weeks to complete the house, depending on the weather. Mrs Moss was keen to get into the house and made that clear to Mr Cox.

34 As the Court appointed referee found, in proceedings between Ilvarity and the Mosses, the Progress Payment Schedule (Exh Q2) formed part of the contract. That finding was correct and there is no need to rehearse the evidence as to that as it was accepted in these proceedings.

35 Work started at the site on Australia Day 2000. Mr Moss said that the works proceeded slowly and that during January/February 2000 there were very few Mondays and Fridays when the work force turned up. On some fine days work did not proceed.

36 The tender of CHNR of 17 November 1999, part of the contract, provided:

“Pioneer Kirribilli double height bricks with red oxide to natural mortar, light raked or flushed joint.”

37 Mr Moss detailed the reasons why the Mosses specifically wanted that brick. In November 1999 the Mosses confirmed that that brick was available in sufficient quantities with Pioneer.

38 Shortly before the bricks were due to be laid CHNR notified the Mosses that the bricks which they had selected were not available and that they should select another brick. This proved to be a burdensome and unsatisfactory task. They chose a brick known as “Port Regal” which was a single height brick and, from the sample the Mosses obtained, it was as close as they could get to the colour of the original brick. When the replacement bricks arrived on site the Mosses were not satisfied with them. They were not uniform in colour; indeed, they varied considerably in their initial face colour. They told Mr Cox that they could not have these bricks as they would not give them the finish which they required.

39 Mr Moss said that Mr Cox and Mr Cullen of Egmont Marketing, the brick supplier, proposed that the bricks would be supplied and they would have them painted in the same colour as the original brick. This would cover up the marked variation in colour. The Mosses did not accept this proposition immediately. They did not want a house which required repainting. The only colour which matched was Molasses. Reluctantly they agreed to a variation dated 25 February 2000. It reads:

“Tuffcoat paint finish to external brickwork N/C”

40 Mr Moss said that prior to entering into the building contract he discussed with Mr Cox that electricity would have to be connected to the shed and the pressure pump behind the shed, because the water supply was coming from the shed and the water from the house roof was going to be put in the tanks. Mr Moss said that the Mosses received a variation for $1200 for connecting the power and that he spoke to Mrs Helen Cox, stating that this was included in the contract. She said that CHNR had only made an allowance. They did not cost it. She said that if the Mosses did not pay it CHNR would stop work.

41 Mr Moss was relying on this tender entry (p5) under the heading “Client requested variations to plans and specifications”:

“Under ground electrical mains to house & shed allowance $1100 including trenching and back filling.”

42 It would seem from the tender that while it was not the responsibility of CHNR to have power brought to the site, it was the responsibility of CHNR to connect the power once it had been brought to the site. The contract allowed an amount for connecting the electrical mains to the house and shed in the nature of a provisional sum. If the work cost more than $1100, the Mosses would have to pay the difference, and if it cost less the Mosses would be entitled to a credit.

43 The “After Contract Variation” of CHNR of 24 March 2000 reads:

3 phase underground electrical mains to the house, single phase electrical mains to shed

44 Mr Moss said that after receipt of the variation claim of $1200 he repeatedly approached CHNR about resolving the matter. The works did not proceed in the meantime. Mr Moss said that they (the Mosses and CHNR) thrashed out an agreement whereby CHNR would put the three phase power to the house as that was required for the air conditioning and the three phase meter box for the house. There would only be a single phase for the shed. If Mr Moss wanted that upgraded Mr Moss was to pay the electrician direct. He was also responsible for vacuuming the power trench. Mr Moss did so in April 2000. He was on site to do that and the electrician helped him pulling the three phase cables through to the shed. Mr Moss back-filled the power trench.

45 Mr Moss was also on the site arranging and installing a ducted vacuum system, which was the responsibility of the Mosses. He noticed particularly in the kitchen, that CHNR was setting the window height below where they required the benches to be. Mr Moss said that when he told Mr Chaseling that the windows had been put in at the wrong height and that they would have to be raised, Mr Chaseling replied that if Mr Moss wanted the windows raised he would have to pay for it. Mr Moss stated that CHNR was responsible. The conversation became very heated. It was specified (p4 of tender) that the kitchen cupboards would be 950mm high and the base of the windows was below that height.

46 CHNR’s agreement to raise the window heights was conditional upon the Mosses accepting the increase in the split between the first and second floor. Mr Moss was unhappy about the condition as CHNR had made both mistakes (wrong window height and making the split between the floors too great). Mr Chaseling said that if the Mosses did not accept the trade-off CHNR would stop work. Mr Chaseling knew that the Mosses wanted to get the house finished. That is why they accepted and signed the variation of 27 April 2000 raising the window head height to 2400mm on specified windows. At the meeting which resolved those matters Mrs Helen Cox was also present. She and Mr Chaseling said that they would change the supervisor. They queried whether Mr Creighton was up to the job. They said that Brett Harley would be the supervisor and that that should solve the problem. The Mosses pressed for a completion date. Mr Chaseling promised that he would have two gangs of carpenters on the job the following week. This did not happen.

47 In their letter of 30 April 2000 to CHNR, the Mosses set out some 18 issues based on their observations where the works executed were unsatisfactory. The letter referred to the problems with the bricks, securing red iron bark for the stairs, the window heights. Many of the complaints raised matters of significance. I will not detail them all.

48 Mr Moss complained that there was excessive excavation and that this led to him having to bear considerably more expense as appreciable back filling and compression of the soil were required at the entrance into the garage and so the driveway could be poured. The retaining wall had to be higher. The downstairs rumpus room area which Mr Moss had to complete would require additional sheeting. At least six courses of bricks around the lower section of the house would not have been necessary if the excavation had not been so excessive. Mr Moss said that Mr Chaseling never offered to him to pour 200mm of concrete over the downstairs area. Mr Moss said there was no feasible way of doing that and meeting building requirements.

49 Mr Moss complained that the foundations were laid incorrectly under the BBQ area and balcony at the back, resulting in brick walls being put in the wrong place and brickwork being left too short. The walls went across where the toilet window was to be. The wall was subsequently cut back and the toilet window correctly positioned. Mr Moss said that CHNR knocked down the wall and erected the second wall on new foundations within the one day. Mr Moss said that the digging out underneath that foundation and the placing of concrete underneath the wall (after it had been constructed) took place in about July 2002 and not straightaway in 2000, as Mr Chaseling had suggested.

50 Mr Moss stated that the walls under the stairwell were located in the wrong place. The toilet doorway was positioned in the incorrect place within the wall. The position of the door was relocated and the brick wall was removed.

51 Mr Moss stated that on the plan of the lounge (part of the Great Room) the low wall shown did not reflect the amendment which had been made. On p6 of the tender the following is written “Extend wall in Lounge with cut out and rounded edges.” Mr Moss explained that the wall was meant to be 1.8m high with a 300mm section going through to the ceiling at the end of the wall. This was a pre-contract alteration to the plans and thus priced into the plans. It was not a post-contract variation. It is a pity that the plan had not been updated to accord with the tender.

52 Mr Moss complained that due to the extent of the delay in getting the roof on and the wet weather, mould and fungus was starting to grow on the framing timber. The mould and fungus was primarily in the frame around the lower garage area where the water was pooling. Mr Moss, who had extensive experience of timber and how it behaved, said that if fungus becomes established within timber such as used for framing this house, there is a distinct possibility that a fungus will continue to grow. When the fungus dries out it takes an excessive amount of moisture out of the timber, causing the collapse of the timber.

53 In late April 2000 Mr Moss began work on garden retaining beds and steps at the rear of the Mosses' property. These had not been part of the plans and work approved by Ballina Shire Council. In his letter of 10 May 2000 Mr Chaseling wrote:

"The brickwork at the rear of the home (stairs etc) which has been placed by workmen other than our tradespeople, it seems not to be placed on footings and could therefore be subject to structural problems. I have concerns that Council may have problems at there (?their) frame inspection with this brickwork in its current state".

54 Mr Moss explained that the retaining walls actually arose from the house and spread out so they abutted up against the structure tower of the house and moved away from it.

55 Mr Moss said that he spoke with Mr Chaseling afterwards and told him that the matter about the retaining walls was between him (Moss) and the Council and that it was not a matter which should concern CHNR. One of the difficulties was that the works being carried out by Mr Moss linked up with the contract works. The contract gave possession of the site to CHNR.

56 On 6 June 2000 Mr Moss met with Mr Chaseling and told him that the quality of the brickwork was below standard. There were bulges in the walls, holes in the mortar; the brickwork needed a lot of remedial work and was not ready to be painted. In their letter of 7 June 2000 the Mosses wrote of the poor alignment of bricks, holes in mortar, missing mortar, joints of different thickness, bulging mortar, corner bricks not lining up with walls. The specified flush finish had not been achieved and the standard of craftsmanship was poor. The south facing wall in the dining room had a bulge in the middle about two-thirds of the way up. The vents at the front of the house below bedrooms 2 and 3 were not centred in the brick walls. The vents under the entry were too high, with the timber showing behind. These defects were corrected in 2002. The vents were pulled out and centred. Mr Moss strongly disagreed with Mr Chaseling’s evidence that the “vents were laid in the most appropriate fashion”. Mr Chaseling’s evidence is incorrect.

57 Mr Moss said that other issues were raised at the meeting of 6 June 2000 and that they were in substance set out in the letter of 7 June 2000. Amongst the complaints, the Mosses raised the finishing of the back deck and the non-compliance with the manufacturer’s recommendations. Having regard to the Mosses’ complaints it can readily be understood why Mr Cox did not want to make a copy of Mr Crandon’s initial engineering report of 10 August 2000 available to the Mosses. I will return to this later.

58 The Mosses stated that, because no scaffolding had been supplied for the guttering and roofing contractors, the job had been delayed for a week. The Mosses wrote:

“We have recorded diary notes of days when no work took place. These can easily be checked against weather records to verify that most of those days were fine and ideal working conditions. It is also noted that during the rain both the carpenters and the bricklayers worked. A pattern seems to have emerged where every Friday there are no workers on site.”

59 The letter, after noting the completion date of the contract of 10 July 2000, concluded:

“It is our understanding that GST and other expenses incurred after the expiry date of the contract is claimable by us against you as an expense incurred as a result of Craftsman not fulfilling their legal obligation.”

That sentence would not have endeared the Mosses to CHNR.

60 By letter of 13 June 2000 the Mosses advised CHNR that they had engaged a building consultant, Mr Terry Hollyoak, who was preparing a report on the work done so far. The Mosses requested that all work to rectify the brickwork cease except for a small sample area to be prepared to achieve the finish specified in the contract. They wrote “We need to agree on the standard and finish achieved.” The letter stated that all decks had not been constructed in accordance with the manufacturer’s specification, listed some seven matters requiring attention and sought an onsite meeting with CHNR with Mr Hollyoak attending.

61 The letter of 13 June 2000 raised a number of other alleged defects in the work done and specified some of the steps which needed to be taken. Mr Moss said that the observations in the letter as to the building work at the site were accurate.

62 Mr Moss said that the decks were completely demolished and rebuilt but not satisfactorily, when CHNR returned to the site in 2002. Mr Moss said that when CHNR initially built the decks, they only filled the lower sections of the columns and the upstairs section was a column with a 100x100 softwood timber post going up through the middle of the column to support the roof above. As at February 2005 two columns at the front entrance of the house had not been filled.

63 By June 2000 there was significant conflict between the Mosses and CHNR in a number of areas. Many of their complaints are embodied in letters they wrote to CHNR, dated 30 April 2000, 7 and 21 May 2000, 7, 13 and 24 June 2000. Over all the defects indicated insufficient attention being paid by CHNR to the requirements of the job, poor planning and poor supervision of tradesmen and subcontractors.

27 June 00 – 8 July 00

64 This was a job which had to be inspected at various stages and a certificate issued that particular works had been completed. The inspection and the issue of the certificates was undertaken by the Principal Certifying Authority, Mr C J Nowlan, a principal of Contech Building Consultants Pty Ltd. CHNR appointed the Principal Certifying Authority. Mr Nowlan had carried out a footing inspection on 9 February 2000 and a ground floor slab inspection on 7 March 2000. He later issued the requisite certificates. On 27 June 2000, at the request of CHNR, he performed an on site framing inspection to determine whether the work had reached Stage 3, that is, completion of brickwork, roof covered, plumbing and electrical rough-in and the building generally was ready for internal linings. If Stage 3 had been reached a payment of 25 per cent of the contract price became due. After inspecting about a third of the building, Mr Nowlan stopped the inspection, taking the view that Stage 3 had not been reached. There were works which needed to be done. Mr Brett Harley, the supervisor, agreed that the inspection was probably a couple of days premature. Stage 3 involves a house being at lock-up stage or virtually at that stage. The house under construction was not at that stage.

65 Mr Moss said that on 28 June 2000 Mr Chaseling handed Mr and Mrs Moss a demand for payment in the sum of $62,642.25. That sum was stated to be "Now Due". The demand contained the endorsement:

"Please Note That In Accordance with Our Contract (section 4) Payment must Be Made Within 7 Days From The Date of This Letter."

The demand appeared to come from Mr Cox, as "F Cox" was typed at the bottom of the demand. Mr Cox said that his daughter signed it on his behalf.

66 Mr Moss said that Mr Chaseling stated that he knew that Stage 3 had not been reached and that payment was not due at that point in time, but if the Mosses paid it before the end of the month they would avoid paying GST. Mr Moss said that he told Mr Chaseling that the payment definitely was not due and that they would not be paying it until it was due and that he (Moss) was concerned about the legality of the Mosses paying for work which was still to be done and not paying GST and whether they were in breach of any legislation or laws.

67 Mr Chaseling gave a different account of events. He said that after the Moss' letter of 24 June 2000 listing defects and complaints he and Mr Smith from the office of CHNR met Mr Moss on site, explained each of the variations to be made and as ordered and had Mr Moss sign them. Mr Chaseling insisted that Mr Moss sign the variations so the works could proceed. Mr Moss was fairly non-committal. Mr Chaseling stated that Mr Moss was told that over the preceding few days Fred Cox and he (Chaseling) had visited every CHNR site and had taken photographs for their records for the changeover to GST and that they had to issue invoices to people on the basis of works completed as at 30 June, that some of these invoices would be split because they had not reached progress payment stages but the value of the works and material on site were not subject to GST.

68 Mr Chaseling said that at that meeting of 25 or 26 June 2000 he told Mr Moss that he would be receiving his third progress claim for Stage 3 without a GST component in it because the plasterboard was ready to be delivered and although the project would not be entirely to lock up stage on 30 June it would be shortly afterwards.

69 Mr Chaseling said that Ms Desley Cox sent out progress claims to every client who had a job under construction as of 30 June 2000 by mail. He said that the first time he saw the Stage 3 claim was in early July 2000.

70 Mr Chaseling stated that he told Mr Moss that CHNR did not expect to be paid the amount claimed until the works the subject of Stage 3 were completed. That would be about 10-14 days after the issue of the invoice Mr Chaseling stated that he said to Mr Moss although CHNR was "issuing the invoice now it is going to save you some six odd thousand dollars in GST" and whilst the house was not completely to that stage "it will be in the next week to ten days and that's when we would expect the payment to be made." Stage 3 had not been reached. The house did not reach Stage 3 until September 2002.

71 I am unable to determine whether Mr Chaseling handed the demand for the third progress payment to Mr Moss or whether it was sent to Mr Moss in the post. By the end of the third week of June 2000 relations between Mr Moss and Mr Chaseling were tense. Mr and Mrs Moss were very dissatisfied by what they regarded, with substantial justification, as the dilatory and substandard work of CHNR and Mr Chaseling thought that Mr and Mrs Moss were being excessively particular and unreasonable in their expectations.

72 Both Messrs Moss and Chaseling agree that in about late June 2000 there was a discussion about progress payment No 3. Mr Chaseling, who was exasperated with the Mosses over their complaints and for wanting a good job was anxious to obtain a substantial sum of money for CHNR. He sought a Stage 3 certificate from Mr Nowlan. If issued, this would at least, at first blush, entitle the builder to press for progress payment No. 3. It was obvious and realised by Mr Chaseling, that there were going to be difficulties about the Mosses paying GST because of the slow progress of the works. It was probably thought by CHNR that by issuing the progress payment demand most of the difficulties with GST would be overcome.

73 The GST problem could have been approached in another and more cumbersome way, that is, by valuing the work done. CHNR saw the premature issue of the third progress payment demand and its payment after all the work required for a Stage 3 certificate had been done as solving, at least part of the problem and CHNR’s need of money from a difficult client. Mr Moss was correctly wary of an arrangement that smacked of a possible fraud on the revenue and required him to pay money before it was truly due. Under the contract the third progress payment became due once the Stage 3 works had been completed, that is they had reached the ready for internal linings stage. This was a disturbing ploy on the part of CHNR.

74 Mr Moss gave evidence of an extended conversation and meeting about 28 June 2000 about the many defects which he alleged existed. The brickwork loomed large. Mr Moss said there were still pits in the brickwork, a number of bricks around corners were badly aligned, some sections of mortar were missing and a fair amount of mortar left wiped over the face of the bricks. Mr Moss stated that Mr Chaseling was insistent that that the brickwork was ready to paint and that painting was going to begin the following Monday. If the painting did not proceed, the scaffolding would come down and the Mosses would have to pay for the erection of further scaffolding. There were a number of split boards or damaged boards in the walkways in the house. These could have been placed in areas where they would have been hidden by cupboards.

75 There was also a discussion about locks. As it was approaching lock up time Mr Moss requested CHNR to fit the locks which he had available. Mr Chaseling said that they would not do so; they would be using their own locks. Mr Moss requested a key, stating that he had to get in to do some work and for the air conditioner. Mr Chaseling declined, telling Mr Moss that he would have to make an appointment to get in.

76 Mr Moss believed that it was at this meeting he pointed out to Mr Chaseling the wall along the outside of the verandah barbecue area at the back of the house was shown to have engaged piers on the plan and none had been built there. The wall was a retaining wall and at one point retained soil up to 4 metres high. It was only a single skin brick wall.

77 Mr Moss said Mr Chaseling handed him a bundle of documents termed “variations”. In truth they were cost quotations for possible variations being considered by the Mosses.

78 Mr Moss stated that the plumber had started to rough in the plumbing throughout the house. The Mosses had not been consulted about the positioning of the taps. Mr Moss expressed disappointment that they were not given the opportunity to ensure that floorboards with defects were placed in areas hidden by cupboards. Some such floorboards were placed in walkways.

79 Mr Moss said that he had a further conversation with Mr Chaseling after the meeting of 28 June 2000. Mr Moss stated that he said to Mr Chaseling that they (the Mosses) were coming up against too many problems and that it might be better if they took over the house from lock up and they terminated the contract at that point. Mr Chaseling refused, saying that CHNR would enforce the contract.

80 Mr Moss said that during that further conversation Mr Chaseling reaffirmed a message left the previous day, suggesting that the Mosses buy the gyprock left on site so they could avoid paying $500 GST on it. Mr Moss indicated that they were not interested and that CHNR could remove the gyprock sheeting while so much rectification work had to be done before the framing could be passed. Mr Chaseling and Mr Moss each asserted that the other would be trespassing if he entered the site.

81 On 30 June 2000 the Mosses, fearful that linings would be installed to cover up numerous deficiencies in the house which CHNR seemed reluctant to remedy (or had declined to remedy) and that the brickwork would be painted without rectification of the defects, served a notice of suspension of works by their solicitors. The letter read:

"This letter is to serve as written direction … that our clients wholly suspend the progress of the works immediately: The works referred to is the construction of a dwelling upon our client's land at Teakwood Drive …

Pursuant to clause 5.01 of the Building Agreement you are required to cease work immediately and vacate the site of the work."

The Mosses thought that they had no other choice. CHNR and Mr Cox contended that the alleged fear had no reasonable basis.

82 Mr Chaseling said that after receiving the notice suspending the works CHNR removed the scaffolding and made the building secure. CHNR barred access to the garages downstairs and refused Mr Moss’ request for a key to get into the property.

83 On 3 July 2000 Mr Cox and Mr Moss were present at the site. Mr Moss said that Mr Cox, using his fists, stormed towards him and said that if the Mosses caused him any trouble he would keep him off the site and out of the house for two years, adding "and a grim reaper will come and visit you.” Mr Cox denied that this was said. Mr Cox was angry with Mr Moss and tried to bring Mr Moss to accept what CHNR wanted, including a lesser standard of work. Mr Moss said that in addition to Mr Cox’s threats, on 7 July 2000 Mr Chaseling told him that, if the Mosses litigated, he would tie them up for over 2 years.

84 On 4 July 2000 Mr Moss spent a lengthy period (up to 2 hours) at the site pointing out defects in the house to Mr Nowlan. Emphasis was placed by Mr Moss upon the footings, the walls and the engaged piers. There were many other matters raised by Mr Moss. Some of these are set out in the letter of 14 August 2000 from the Mosses to the Building Surveyors and Allied Professions Accreditation Board.

85 Between February 2000 and July 2000 there had been an alteration to the footings. When Mr Nowlan made his inspection in February 2000 he inspected the original footings. Mr Nowlan, when asked, said that he had not inspected the footings under the existing wall at the rear of the dwelling. At the site meeting and inspection on 4 July 2000 the Mosses pointed out that there had been a change to the foundations. Mr Nowlan explained that the wall shown on the original footing would have obstructed a window in the amenities area on the ground floor level. The wall was moved some 500mm to enable the window to function correctly. Mr Nowlan assessed that the brickwork above it was not load bearing as it just enclosed the subfloor of the rear verandah. Mr Moss queried whether the depth of the footing at the point of alteration was adequate. Mr Nowlan thought that it was.

86 During the site meeting on 4 July 2000 Mr Nowlan was shown the suspended concrete slab at the front entry and asked if he had inspected the reinforcement prior to pouring. Mr Nowlan replied, "No." He should have been notified so he could inspect. The formwork had failed and caused at least 100mm deflection in the base of the slab.

87 According to Mr Moss, Mr Nowlan indicated that he would not be withdrawing his footing or slab certificates. Mr Moss pointed out numerous defects or shortcomings in the areas below the floor, which he believed should have been noted in Mr Nowlan’s report of 27 June 2000 but were not. Mr Moss pointed out that above the floor there were numerous defects which needed to be rectified, apart from those which Mr Nowlan had listed. These included the meter box protruding into the wall and pushing the studs out of line by 20mm, incorrect stud spacing (being not as specified in the contract), broken and missing noggings, lack of support under Grinder Truss, flooring not nailed around the walls and, in some cases, no joist to which to nail flooring, brick ties not nailed off and incorrect sliding cavity doors.

88 The Mosses told Mr Nowlan that the core filled columns supporting the verandah areas had not been vibrated and that they understood that this was necessary to provide a termite barrier. The Mosses also stated that there were numerous other areas where the termite protection was not visible.

89 The Mosses asked if they could be provided with all documentation and reports on inspections as they were going to terminate the contract with CHNR and needed to know what had to be done to rectify the existing problems. Mr Moss said that Mr Nowlan informed them that he was employed by CH and would need to get their approval to give the Mosses the documentation. Their solicitors would have to formally request such documentation.

90 Mr Moss said that during the meeting of 4 July 2000 he discussed with Mr Nowlan the work he had done at the back of the building. Mr Nowlan commented that that work was not on the plans and asked what footings were underneath it. Mr Moss said that he explained that he had used a conventional brick footing, that it was a waffle type construction which was transferring the load down towards the base of the footings and that it was not a vertical retaining wall. Mr Moss said that Mr Nowlan stated that he had had no experience with brick footings and that he would have to make some enquiries as to what was required with brick footings.

91 Although he had not mentioned the matter in his evidence in chief, Mr Nowlan said in cross-examination, that he believed that he mentioned the garden retaining walls and steps to the Mosses and asked them if they had any details about the footing or the structure. Mr Nowlan said that Mr Moss said "No" and that he had erected it. Mr Nowlan said that he could not recall whether he indicated that he was going to issue a stop work order. I find that Mr Nowlan did not so indicate. If he had, Mr Moss would have reacted.

92 Later on 4 July 2000 or possibly 5 July 2000 Mr Nowlan telephoned Mr Chaseling. Mr Nowlan said that he raised the structure built by Mr Moss at the back of the house. Mr Nowlan said that Mr Chaseling could have said that he was taking some photographs of it.

93 Mr Moss said that in a conversation in mid 2000 Mr Chaseling told him that Mr Nowlan had placed a demolition order on the works being built by Mr Moss. Mr Moss was not sure of the date, but it was probably after the meeting with Mr Nowlan on the site on 4 July.

94 Mr Chaseling in his evidence in chief said that he had not discussed the Moss’ work and the stopwork order with Mr Nowlan. Mr Chaseling said that when he was on the site with Mr Nowlan (possibly on 27 June 2000) he may have pointed to the Moss’ work and said, “That’s not our work, we are not responsible for that.” There was no other discussion.

95 I find it hard to accept, and I do not accept, that there was no prior discussion between Messrs Chaseling and Nowlan about the issue of a stop work order as to the work being done by the Mosses at the rear of the house (steps and garden retaining walls). By letter bearing date 4 July 2000 Mr Chaseling wrote to Stephensons Solicitors (then acting for the Mosses):

96 The figure "8" has been written over an earlier figure which is not easy to read. It could have been "4". The attached letter from the Building Inspector appears to be from Mr Nowlan bearing date 6 July 2000 addressed to Craftsman Homes. That letter, after referring to a recent frame inspection continues:

"During the course of the inspection a number of issues were noted which require attention prior to work proceeding on the lining of internal walls of the building. Please find enclosed a copy of the site inspection sheet detailing the outstanding items.

In addition to the above, the inspection noted that rear access stairs and planter boxes have been installed which were not detailed on the approved plan. The inspection was unable to determine the existence and adequacy of any footing support to the stairs as constructed.

As you would be aware that as the appointed Principal Certifying Authority for the development I am responsible for the issue of a Compliance Certificate at the completion of the project. The Compliance Certificate certifies that the building is structurally adequate and as such I am unable to verify the adequacy of the rear steps/garden beds.

It is also noted that the suspended entry porch slab ahs (sic) been placed, however an inspection by this office [of the steel] was not undertaken [before the slab was poured].

Accordingly, in view of the concerns regarding the construction of the rear stairs/planter boxes you are directed to cease work on the project until:

97 The site inspection sheet referred to in this letter bearing date 6 July 2000 was that of Mr Nowlan bearing date 27 June 2000 and headed Building Inspection Report. It lists some eight matters to be rectified. Unfortunately this report was incomplete. It neither listed all the matters to be rectified nor stated that it was incomplete.

98 On 7 July 2000 a meeting was held in the offices of the solicitors for the Mosses involving the solicitors, the Mosses, Mrs Cox and Mr Chaseling, but no settlement was reached. Mr Moss believed that after the meeting Mr Chaseling handed him a copy of Mr Nowlan’s stopwork letter and report. The meeting was followed by a letter of 7 July 2000 from the solicitors for the Mosses to Ilvarity in these terms:

"We refer to the meeting held at our office earlier today attended on your behalf by Helen Cox and John Chaseling.

Our clients are of the view that execution of the works in accordance with the tender and plans and specifications is an essential term of the contract and accordingly they now have the right to terminate the contract effective immediately.

99 Mr Moss said that on 8 July 2000 he telephoned Mr Nowlan and advised that the Mosses were looking to take over the job. Mr Moss asked Mr Nowlan for a comprehensive list of things required to get the house to pass the framing inspection. Mr Nowlan declined, explaining that there was a conflict of interest and he was employed by the builder. Mr Moss told Mr Nowlan he was not prepared to leave the matter at that. Mr Nowlan agreed that Mr Moss telephoned him, but gave a different version of events. Mr Moss advised that since the inspection on 4 July 2000 further items had come to light and requested re-inspection. Mr Nowlan said that he could not do so that afternoon as he had a prior sporting engagement. Mr Nowlan said that Mr Moss became irate, accused him (Nowlan) of being aligned with Mr Cox and CH to his detriment. Mr Nowlan responded telling Mr Moss that this was not the case and terminated the conversation.

100 There is substance in both versions. It is not in doubt that Messrs Nowlan and Moss spoke, that Mr Moss had found further defects which he wanted to show Mr Nowlan, that Mr Nowlan could not make an inspection on 8 July due to a prior engagement, that Mr Moss wanted a list of all that had to be done to bring the works to Stage 3 and that Mr Nowlan, having been retained by CHNR, felt he was being dragged into a conflict of interest situation and declined. That made Mr Moss angry and he accused Mr Nowlan of being aligned with Mr Cox and CHNR. At that stage Mr Nowlan had not fully thought out his position and what he should do when a spirited contest developed between the owner and the builder, and the owner, in effect, asked him for ammunition to use against the builder.

Mr Nowlan

101 I interrupt the narrative to record the further action taken by the Mosses against Mr Nowlan and its outcome.

102 The Building Surveyors and Allied Professions Accreditation Board Inc, upon a complaint made by the Mosses found allegation 2 sustained, namely, Mr Nowlan's inability to carry out a satisfactory inspection to determine if work complies with the necessary Standards and Plans and Specifications. The Board in its reasons wrote:

2. Alteration of the foundations, as identified by the complaints, without inspection, and

3. The issue in relation to the brick engaged piers

It is considered that Mr Nowlan's letter of 6th July should have clearly indicated that the inspection report on the framing was not a complete list of defects or the fact that other agreements had been made with the supervisor"

103 Mr Nowlan consented to the Board reprimanding him as to Allegation 2. This avoided a hearing before the Administrative Decisions Tribunal. Mr Nowlan said that he accepted the reprimand for commercial reasons – the process was proving costly. However, it is difficult to see any sustainable answer to the Board's reasons.

104 Allegation 1 (against Mr Nowlan) was also sustained. That was in these terms:

"His apparent conflict of interest with his role as a Certifier and his need to maintain a working relationship with Builders for repeat business."

105 The Board had earlier found that while all parties (Nowlan, Ballina Shire, the Mosses and CH) were of the opinion that Craig Nowlan was the lawfully appointed Principal Certifying Authority, he had not been so appointed. The Board referred to s 15, Code of Conduct, which requires the Principal Certifying Authority to:

106 The Board considered that there was a reasonable likelihood that "the accredited certifier will be found guilty by the Tribunal of unsatisfactory professional conduct. In relation to Allegation 1 Mr Nowlan consented to and was issued with a caution. While Mr Nowlan did not accept that his conduct warranted a caution he said that he accepted it for commercial reasons. It is hard to disagree with the Board's view.

107 I have dealt with these matters at some length because as he gave his evidence Mr Nowlan seemed strongly supportive of the builder and hostile to the Mosses. He was also strongly supportive of the builder in June-July 2000. A person discharging the role of the Principal Certifying Authority has a difficult task in keeping the balance between a builder some of whose work is sub-standard and an unduly particular building owner, especially when the Principal Certifying Authority depends upon the builder for further work. I have some sympathy for Mr Nowlan. Messrs Cox and Chaseling were abrasive, assertive and aggressive. Mr Moss was abrasive, stubborn and forceful.

108 It was not seriously disputed that Mr Nowlan did not have the power to issue a stop work order. It is a pity that Mr Nowlan concerned himself with an aspect of the dispute between CHNR and the Mosses rather than concentrating on whether the works complied with the Plans and Specifications and whether they had been adequately and correctly executed. Mr Nowlan said that he believed that he had a responsibility to ensure that all works proceeded in accordance with approved documentation.

13 July 00 – 15 Sept 00

109 After the confrontation between Messrs Moss and Nowlan, the Mosses promptly sought the assistance of the Health and Building Department of Ballina Shire Council and requested an inspection of the house being built for them. Inspections took place on 13 and 20 July 2000. On 25 July 2000 Ballina Shire Council by Mr A Weir, a building surveyor, issued a report. That report mentions many defects including deficiencies in the footings, the front entry patio slab and the masonry walls. The report concluded:

"Prior to work proceeding the matters identified in this report are required to be addressed and the dwelling to be re-inspected by officers of the Council's Health and Building Department prior to the fixing of the internal wall linings."

110 By letter bearing date 27 July 2000 to the Mosses solicitors, the solicitors for CHNR asserted that the alleged breaches of contract, which were not admitted, were not such as would entitle the Mosses to terminate the contract. CHNR's solicitors further asserted that the purported termination of the contract amounted to a wrongful repudiation of the contract. It reserved whether CHNR would terminate the contract or seek specific performance of the contract. CHNR's solicitors wrote that in the meantime the works remained suspended pursuant to the notice issued by the Mosses and that no work should be undertaken on the site until the matter was resolved.

111 CHNR's solicitors asserted that $64,402.25 was due and payable to it and demanded payment within seven days, otherwise proceedings would be instituted and interest claimed. They stated that they had received instructions to lodge a caveat. This was lodged within a few days. CHNR was not entitled to lodge that caveat.

112 By letter of 9 August 2000 CHNR's solicitors protested at the Mosses having erected an "owner builder" sign on the premises and stipulated that no works should be undertaken on the site and threatened injunction proceedings if any work commenced. By letter of 31 August 2000 CHNR's solicitors pointed to cl 19.01 of the contract, alleging that it granted to CHNR exclusive possession of the land. The letter continued:

"… by reason of your client's failure to pay within 14 days the Progress Payment requested 27 June 2000 our client hereby suspends the works wholly until your clients' default is remedied."

113 On 15 September 2000 CHNR issued a statement of liquidated claim against the Mosses out of the District Court at Lismore alleging that in accordance with their agreement CHNR on 27 June 2000 sought from the Mosses progress payments for Stage 3 of the building works undertaken for $62,642.25. CHNR also sought payment of invoice dated 23 June 2000 for $1,760 for site works. A total of $64,402.25 was claimed together with interest pursuant to cl 8.04 of the agreement at the rate of 20 per cent from 6 July 2000 to date and continuing at $35.28 per day.

HOW Claim And Aftermath

114 During about August 2000 the Mosses made a claim on the insurer, Home Owners Warranty (HOW). Their claim was supported by a report from Mr Terry Hollyoak, an experienced building expert. Lee Du Vernet & Associates (Mr Larry James) were appointed to investigate and report. After making an appointment with the owners to inspect the premises and assess the work done, Lee Du Vernet & Associates contacted CHNR, but its officers declined to discuss the building works. Lee Du Vernet & Associates have written that they were advised by CHNR's solicitors not to carry out their assessments under the circumstances and they threatened to obtain an injunction to prevent Lee Du Vernet & Associates carrying out their inspection. HOW instructed them to continue. A new appointment was made with the owners and the builder was advised and invited to attend that inspection. Lee Du Vernet & Associates were again contacted by CHNR's solicitors, who stated that they were preparing an injunction and that the injunction would be served that afternoon. This did not eventuate.

115 By letter of 14 September 2000 HOW served a Notice of Intention To Inspect on CHNR, marked for the attention of Mr F R Cox. That letter elicited an immediate but undated response from CHNR signed by Mr Chaseling and addressed to HOW. CHNR sought to deflect attention from its work and to stop the inspection.

116 CHNR advised that the Mosses' job had "been placed on a notice by the building inspector due to faulty and un-approved works which have been carried out by The Owner." CHNR's letter continued:

"We have been provided a copy of the alleged defects provided to you by the owner from a report by a Terry Hollyoak. This report has been challenged and litigation is now on foot to force the owner to comply with the terms of the contract.

We say that many of the alleged defects are items, which are in the course of normal construction practice and will be attended to when the works resume and the frame inspection has been completed.

We believe it is premature for you to go to the expense of securing another report at this stage. That report would only concur with those provided to Ballina Council, which also states that the faulty workmanship is only in the areas that the owner has illegally carried out unauthorized and un-inspected works."

117 It was untrue and misleading for Mr Chaseling to write that the faulty workmanship was only in the areas that the owner has illegally carried out unauthorised and uninspected works. The diversionary tactics failed.

118 The inspection occurred on 18 October 2000.

119 In cross-examination Mr Chaseling agreed that the last paragraph of his letter contained a false statement. He sought to explain it as a typographical error. He said that he intended to say in his letter that there was faulty work "but there is also workmanship in the area illegally carried out by the owner." That explanation was untruthful.

120 There was another erroneous statement in that paragraph. No reports were provided to Ballina Council. Mr Chaseling said that the letter should have referred to a report provided by Ballina Council.

121 Mr Chaseling accepted that Mr Weir's report on behalf of Ballina Shire Council had very considerable criticisms of the quality of the work CHNR had carried out. Mr Chaseling conceded that even if the words "to Ballina Council" in the last paragraph of his letter read "by Ballina Council" that was still incorrect as nowhere in the Council report did Mr Weir state that the faulty workmanship was only in the areas where the owner had illegally carried out unauthorised and uninspected works. Mr Chaseling sought to explain his false statement by saying that he was mistaken. That was a euphemism. Mr Chaseling said that in his response to HOW he was more interested in the situation where there was an order issued by the owner and a do not proceed order issued by the building inspector. Mr Chaseling was seeking to divert attention from the faulty work of CHNR and put off any inspection of that work and divert attention to the matters he mentioned. He gave this evidence:

1039 The defendants submitted that when exemplary damages (not available), damage to reputation (only available in defamation actions) and that part of hurt to Mr Cox’s feelings attributable to the broadcasts (also damage relevant only to the defamation actions) were excluded, all that was left was general damages for the Edmondson Park trespass and hurt to Mr Cox’s feelings from the Edmondson Park trespass. In respect of that trespass an award has already been made.

1040 The plaintiffs submitted that there is no public policy to limit recovery of damages for fraud or misleading and deceptive conduct under legislation to a cause of action in defamation and that the causes of action do not overlap; the mischief they seek to remedy is different. Sattin v Nationwide News was a very different case. The plaintiffs submitted that the presence of s65A TPA and corresponding sections in FTA show that absent s65A etc the Acts apply.

1041 The plaintiffs submitted that s65A did not operate to nullify s52 in its application to the present case. They contended that the causes of action under s52 were not the mere publication by the prescribed information provider but they start with the deceitful conduct which led to the trespass followed by the false and misleading statements in the publications, that is in the promo and the program. It was submitted that there was a course of conduct going far beyond what s65A protects. I accept that the false and misleading conduct starts with the deceitful conduct which led to the trespass. Except to the very limited extent which I have indicated, I do not accept that there were false and misleading statements in the promo and the program. What was there said was substantially true.

1042 In contending that s65A had no application Mr Garnsey QC invited the Court to look at the whole course of conduct from the initial misrepresentations to the telecasts. Mr McClintock SC contended that the core of the matter and the damage lay in the publication of the promo and of the program. This involves focusing on the words in s65A(2)(b) that the publication was by way of a television broadcast by the prescribed information provider. Once the publication was treated as exempt there was either no damage or nominal damage. It was the publication which caused the damage and gave rise to the imputations.

1043 The calculated deceit constituted both a false representation and false and misleading conduct and led to the trespass and the trespass led to TCN Nine and Mr Fordham questioning and filming Mr Cox and this was distressing for Mr Cox. He was particularly angry at being asked about the Moss house. The telecast not only showed Mr Cox and his reactions but portions of the allegedly defective works and the Mosses, Vimpanys and Allans with their complaints. There were portions of the “meeting” with Mr Cox which were recorded but not telecast. However, it was the telecast of the program which caused him the major damage and that enjoys the protection of s65A. For the reasons given earlier the promo does not enjoy that protection.

1044 The plaintiffs further submitted that the test for causation (“by”) under s82, TPA and s68 FTA meant that on the facts of the present case, damages in respect of trespass and injury to reputation (irrespective of any trespass or defamation defences) is recoverable by each of the plaintiffs as a result of the publication achieved by the initial misrepresentations, conduct and intentional trespass and that this included general damages and aggravated damages where appropriate.

1045 I do not accept this proposition nor do I think that the authorities of Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525 require it and Marks v GIO Australia Holdings Ltd & Ors (1998) 196 CLR 494 require it. It would be anomalous to take into account the trespass or defamation but not the defences when considering the damages to which the plaintiff was entitled when there had been false or misleading conduct leading to a trespass and thence in part to a defamation publication.

1046 In Wardley at 525 the joint judgment states:

“As loss or damage is the gist of the statutory cause of action for which s82(1) provides, the cause of action does not accrue until actual loss or damage is sustained. The statutory cause of action arises when the plaintiff suffers loss or damage “by” contravening conduct of another person.” (footnote omitted)

1047 After remarking that the concept of loss or damage, like the concept of causation must be applied in a wide variety of situations they said at 525-526 as to a contravention of s52(1) in the form of misleading conduct constituted by misrepresentations:

“In this situation, as at common law, acts done by the representee in reliance upon the misrepresentation constitute a sufficient connexion to satisfy the concept of causation. And, if those acts result in economic loss, that is, loss other than physical injury to person or property, that economic loss will ordinarily be recoverable under s82(1). In the context of the area of commercial conduct in which the Act operates, the reference to “loss or damage” in s82(1) plainly includes economic or financial loss.

In determining when a plaintiff first suffers economic loss or damage in an action under s82(1) based on misleading conduct constituting a contravention of s52, it is necessary to have regard to the applicable measure of damages. In this respect, it would not be right to conclude that the measure of damages recoverable under the sub-section necessarily coincides with the measure of damages applicable in an action for deceit or in an action for negligent misrepresentation. The measure of damages recoverable under s82(1) can only be fully ascertained after a thorough analysis of those provisions in Parts IV and V of the Act for contravention of which the statutory cause of action may be maintained. But the common law measure of damages will in many cases be an appropriate guide, though it will always be necessary to look to the provisions of the Act with a view to ascertaining the existence of any relevant legislative intention. In a case such as the present, it may safely be assumed that the plaintiff is entitled to recover “a sum representing the prejudice or disadvantage [the plaintiff] has suffered in consequence of his altering his position under the inducement”of the misleading conduct or “the actual damage directly flowing from” that conduct, to take up and adapt well-known statements of the measure of damage applicable in an action of deceit.” (footnotes omitted)

1048 The misrepresentations led to Mr Fordham and Ms Stinson gaining access to Mr Cox and speaking to him. While there was a real trespass for which Mr Cox must be compensated most of the damage which followed came from the contents of the program, that is from what the Mosses, the Vimpanys, the Allans and Ms Wilton said, what was shown of the defects alleged and Mr Fordham’s comments. While the exchanges between Mr Cox and Mr Fordham and the pictures shown of what occurred enhanced the program the core of the program came from what was otherwise said and shown. Apart from the trespass I am not persuaded that the act of granting Mr Fordham and Ms Stinson access to the house at Edmondson Park and an interview with Mr Cox resulted in economic loss. It is necessary to avoid any form of double counting when the same misrepresentations lie behind the action of trespass and false and misleading misconduct and defamation proceedings have been instituted.

1049 In Wardley, as a result of untrue representations made by it to the State of Western Australia that State executed an indemnity in favour of the National Bank under which the State was obliged to make a payment when the loss of the party to be indemnified was ascertained and quantified. It was held that the indemnifier suffered no loss until the contingency was fulfilled and that time within which to commence proceedings did not run under s82(2), TPA until that event occurs. The present case is very different.

1050 In Marks v GIO Australia Holdings (1998) 196 CLR 494 the High Court considered the operation of ss52, 82(1) and 87, TPA. In the joint judgment of McHugh, Hayne and Callinan JJ this passage appears at 509:

“Secondly, s82 provides, in effect, that the loss or damage that may be recovered by action is the amount of the loss or damage suffered “by conduct of” another person that was done in contravention of Pt IV or V. It contains no stated limitation of the kinds of loss or damage that may be recovered and contains no express indication that some kinds of loss or damage are to be regarded as too remote to be recovered.”

1051 At p510 this passage appears:

“It can be seen therefore, that both ss82 and 87 require examination of whether a person has suffered (or, in the case of s87, is likely to suffer) loss or damage “by conduct of another person” that was engaged in the contravention of one of the identified provisions of the Act. That enquiry is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct. But once that causal connection is established, there is nothing in s82 or 87 (or elsewhere in the Act) which suggests either that the amount that may be recovered under s82(1), or that the orders that may be made under s87, should be limited by drawing some analogy with the law of contract, tort or equitable remedies. Indeed, the very fact that ss82 and 87 may be applied to widely differing contraventions of the Act, some of which can be seen as inviting analogies with torts such as deceit (eg, s52) or with equity (eg, s51AA) but others of which find no ready analogies in the common law or equity, shows that it is wrong to limit the apparently clear words of the Act by reference to one or other of these analogies.”

1052 In my opinion there is a causal connection between the contravening conduct and the trespass. The question of a causal connection between the contravening conduct and the injury to the reputation of Ilvarity and Mr Cox is more difficult. There is no causal connection between the misrepresentations and that part of the program comprising the statements of the Mosses, the Vimpanys, the Allans and Ms Wilton and those of Mr Fordham when engaging in discussion with them. However, as to the confrontation and exchanges between Mr Fordham and Mr Cox, which were deliberately engineered by Mr Fordham, these would not have occurred but for the misrepresentations and the access they produced to the Edmondson Park premises and Mr Cox. Those exchanges, which were shown in the program produced some strong and defamatory remarks from Mr Fordham. There was also the confrontation and exchange shown in the promo and the program between Mr Fordham and Mr Cox which did not flatter Mr Cox. I think that there is a sufficient causal connection between the misrepresentations and the parts of the program and promo which I have indicated. But for the misrepresentations this would not have occurred. There was real damage.

1053 At p513 of the joint judgment reference was made to the Court’s earlier decision in Wardley. At 513-514 after noting the observation in Wardley that “[e]conomic loss may take a variety of forms” the judgment continued:

“But central to them all, when it is said that the loss was or will probably be caused by misleading or deceptive conduct, is that the plaintiff has sustained (or is likely to sustain) a prejudice or disadvantage as a result of altering his or her position under the inducement of the misleading conduct.
…

1054 These remarks at 514 were made in a different context in that the Court was illustrating what may happen in a contractual setting and whether a chose in action which was acquired was worth less the amount paid for it.

1055 In the present case but for the representations Ms Stinson and Mr Fordham would not have been granted access to the Edmondson Park premises for an appointment with Mr Cox to discuss a purported building proposal. Mr Cox would not have admitted them if he had known that they were from ACA and were going to confront him. The refusal of entry would have robbed the program of its enhancement by questioning Mr Cox suggesting to him that the work of CHNR was poor and filming him. The questioning and filming was not flattering and did not assist Mr Cox. The refusal of entry, would not have altered the substance of what the Mosses, the Vimpanys, the Allans and Ms Wilton had to say or the defective work which was shown.

1056 At 515 the joint judgment stated:

“The central enquiry is what consequence has the contravention of the Act had on the party in question. That requires comparison between the position in fact of the party which alleges loss and the position that would have obtained had there been no contravention.”

A like approach should be taken to the counterpart provisions in the FTA.

1057 Gaudron, Gummow and Kirby J each delivered separate judgments. Gaudron J noted at 503-504 that all members of the Court agreed that relief under s82 is not to be confined by analogy either with actions in contract or in tort.

1058 At 501 Gaudron J pointed out that for a person to obtain relief under s82 he or she must have suffered loss or damage and that there is no punitive aspect of that provision. At p504 she pointed out that an applicant for relief under s82 must establish what he or she has lost.

1059 At 526-527 Gummow J made these comments as to s82:

“Section 82 has at least five discrete elements. First, it identifies the legal norms for contravention of which the action under the section is given. Secondly, it identifies those by and against whom that action lies. Thirdly, the section specifies the injury for which the action lies as the suffering of loss or damage. Fourthly, it stipulates a causal requirement that the plaintiff’s injury must be sustained “by” the contravention. Finally, the measure of compensation is “the amount of” the loss or damage sustained.”

“Section 82 provides a remedy not only against a defendant who contravened Pt IV or Pt V but also against those “involved” in that contravention. The reference is to s75B which requires that the party with alleged accessorial liability have intentionally aided, abetted, counselled or procured the contravention by the principal.

1060 At 531 after referring to Wardley at 525 with its stated view that the word “by” in s82(1) expresses “the notion of causation without defining or elucidating it” Gummow J stated:

“A significant causal connection between two events would not be established merely because one contributed to the occurrence of the other unless the terms of the statute clearly indicated that this was so.”

At 532 Gummow J said:

“The purpose and scope of s82 is to provide compensation for the injuries sustained, by contravention, in the present case, of s52.”

1061 Returning to the facts of the present case, it is apparent that from the time of Ms Stinson’s telephone call to Ms Santin of Ilvarity (CHNR) and Ms Stinson’s lies that she was angling to set up an appointment in Sydney with Ilvarity and Mr Cox. Ms Stinson, with an untruthful story made an appointment with Mr Cox to see him at Edmondson Park along with “John Stinson” at 1pm on 22 February 2002. The latter role was to be filled by Mr Fordham.

1062 If Mr Cox had been told that Ms Stinson and John Stinson were from ACA or TCN Nine they would not have been given an appointment nor access to the house at Edmondson Park. In turn Mr Fordham would not have been able to admit the camera crew.

1063 After admitting the camera crew Mr Fordham said, “Fred I just wanted to ask you a couple of quick questions, we’re from A Current Affair”. The text and the video footage is covered by items 2 to 11 and 25-32 of the program. Item 25 was preceded by a question from Mr Fordham, What about the Mosses? I have at the start of this judgment summarised what else occurred. That did not appear on the program.

1064 The misleading and deceptive conduct of TCN Nine and Mr Fordham was carefully contrived. Both Mr Cox and Ilvarity suffered damage over and above the trespass and the core of the defamatory material, namely the statements made by the Mosses, Vimpanys, Allans and Ms Wilton and some of those of Mr Fordham.

1065 The misleading and deceptive conduct enabled TCN Nine and Mr Fordham to obtain access to Mr Cox, to surprise and confront him, to film him and to ask a series of questions and make assertions. Although not in the program Mr Fordham’s exhortation (or harangue) to come out and talk to them, and especially his comment that Mr Cox was running away were offensive. He was under no obligation to grant interviews to TCN Nine. All this distressed Mr Cox and rightly so.

1066 The misleading and deceptive conduct enabled TCN Nine and Mr Fordham to move into a position whereby TCN Nine could enhance its program and give it a greater sting at the expense of CHNR (Ilvarity) and Mr Cox. They, and especially Mr Cox were visually held up to public criticism. This increased the damage which they suffered. Visual representation is telling and adds an extra dimension, a dimension that words alone do not have. With the visual representation added to the words, the criticisms and allegations are more memorable and tend to linger longer in the recollection of the reasonable viewer.

1067 This case does not fit within any of the recognised categories and the combination of facts is potent including the repetition of the misleading and deceptive conduct. I refer to the representations made on the telephone to Miss Santin and then to Mr Cox, Mr Fordham and Ms Stinson not telling Ms Cox what their purpose was and giving her the impression that they were the young couple who were calling to discuss the building of a home. The initial discussion between Mr Fordham and Ms Stinson and Mr Cox before the camera crew was let in was also deceptive as Mr Fordham and Ms Stinson persisted in the story of wanting to enquire about building a home on the far north coast of New South Wales. The ploy and remark about leaving the mobile telephone on were deceptive. The call on the mobile telephone was the signal for the camera crew to be let in to Edmondson Park. All this led to TCN Nine being able to increase the impact of the promo and the program.

1068 I note the following:

Wardley

d) A comparison must be made between the position in which the person who suffered loss or damage is in and the position that person would have been in had there been no contravention. This may not be decisive.

Enzed Holdings Ltd v Winthen Pty Ltd

“If the court finds damage has occurred it must do its best to quantify the loss even if a degree of speculation and guess work is involved…We emphasise, however, that the principle applies only when the court finds that loss or damage has occurred. It is not enough for a plaintiff merely to show wrongful conduct by the defendant”

Jones v Schiffmann

f) Damages for mental stress may be awarded in appropriate cases: Miller’s Annotated Practices Act, 27 Edn (1.82.68)

Musca v Astle Corp Pty Ltd

Marks v GIO Australia Holdings Ltd

1069 If the misleading and deceptive conduct had not occurred there would have been no admission to the Edmondson Park premises, no discussion with Mr Cox, no filming of Mr Cox and no opportunity for TCN Nine to enhance its program by a personal confrontation in unfair circumstances. He would not have been harrangued and accused of running away which is often associated with guilt. Mr Cox would not have suffered the damage of his visual representation being exposed to hundreds of thousand people in adverse circumstances. He was stunned, distressed and seething at what happened.

1070 While I have held the imputations were justified and also covered by the comment defences, he and Ilvarity have suffered damage as a result of the representations.

1071 It is not easy to assess the damages. I take into account that s 65A, TPA does not apply to the promo. The damages which I assess do not include aggravated damages or a punitive element. The principal damage was suffered by Mr Cox. I take into account that he has been awarded damages and that the defences to the imputations have been upheld. I must avoid double counting and be careful not to award damages in respect of the material in the promo and the program covered by the imputations. In assessing the compensatory damages I can do no better than make an estimate of the damage flowing from the misleading or deceptive conduct. I assess the damage suffered by Mr Cox by the misleading and deceptive conduct as $50,000.

1072 Ilvarity (CHNR) was not entitled to damages for trespass but it was the builder of the houses under attack in the promo and the program. The name of Craftsman Homes Northern Rivers is mentioned four times in the program and there is a video picture of “Craftsman Homes” signage in the promo. The misleading and deceptive conduct practised on Mr Cox also affected CHNR adversely and led to the enhancing of the program against it but to a lesser extent than Mr Cox.

1073 Ilvarity is entitled to compensatory damages which I assess at $30,000.

1074 As to the count for the false representation (para 13A) any damages to which Ilvarity and Mr Cox are entitled are covered by the awards made to each of them in respect of the misleading and deceptive conduct. To award further sums would be to engage in double counting. In view of the award made in the trespass action of Mr Cox for aggravated and exemplary damages I would make no further award of such damages. That would not be warranted.

Verdicts

1075 Consequent upon these reasons there will be:

2. On the trespass count by Mr Cox against TCN Channel Nine Pty Limited and Ben Fordham, verdict for Mr Cox for $230,000.

3. On the trespass count by Craftsman Homes Australia Pty Limited and Ilvarity Pty Ltd, verdict for TCN Channel Nine Pty Limited, Mike Munro and Ben Fordham

4. On the trespass count by Mr Cox against Mike Munro, verdict for Mike Munro.

5. On the count of false and misleading conduct (para 13C), verdict for Mr Cox for $50,000 against TCN Channel Nine Pty Limited and Ben Fordham and verdict for Ilvarity Pty Limited for $30,000 against TCN Channel Nine Pty Limited and Ben Fordham. On these counts as between Craftsman Homes Australia Pty Limited and TCN Channel Nine Pty Limited, Mike Munro and Ben Fordham, verdict for the defendants. On these counts as between the plaintiffs and Mike Munro, verdict for Mike Munro

7. As to the false representation count (para 13A) as between Craftsman Homes Australia Pty Limited and each of the defendants, verdict for each of the defendants.

8. As to the false representation count (para 13A) as between Ilvarity Pty Limited and Mr Cox on the one hand and Mike Munro on the other, verdict for Mike Munro.

declare

1076 I acknowledge, with thanks, the appreciable and skilled industry of all counsel and the solicitors representing the parties in this unusual and difficult case.

1077 Questions of costs and interest remain. I stand the matter over to 16 June 2006 for argument on these matters. I direct the parties to deliver draft short minutes of the orders which they contend should be made to each other by 5pm on 13 June 2006 and to my associate by 2pm on 15 June 2006 in the event of disagreement. The parties may approach my associate to arrange another mutually agreed hearing date.

**********

07/06/2006 - Index omitted - Paragraph(s) no change

07/06/2006 - index omitted from front of judgment - Paragraph(s) no change

31/10/2006 - Inclusion of index - Paragraph(s) N/A

CITATION:	Craftsman Homes Australia Pty Limited & 3 Ors v TCN Channel Nine Pty Limited & 2 Ors [2006] NSWSC 519 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	8-19 November 2004, 7-15 February 2005, 22-23 March 2005, 12 & 15 April 2005
JUDGMENT DATE :	2 June 2006
JUDGMENT OF:	Smart AJ at 1
DECISION:	See paras 1075 to 1077
CATCHWORDS:	Defamation - Two National telecasts (Promo & Program) - Imputations in context - ambit of imputations - defence of substantial truth and matters of public interest - extended review of construction of four houses - statutory defence of comment in NSW and corresponding defences in other States and Territories - proper material for comment, public interest, comment of defendant, of servant or agent and of stranger - facts sufficiently stated or identified - Trespass at Edmondson Park - Mr Cox lessee of premises - whether his companies had sufficient title to sue - bad instance of tort - compensatory, aggravated and exemplary damages awarded - Trespass at the Mosses - whether Ilvarity in possession at time of alleged trespass when off site for over 18 months - construction of building agreement - Ilvarity not in possession and at best entitled to possession when suspension of contract ceased - insufficient title to sue - False Representation and Misleading and Deceptive Conduct established - These causes of action available - plaintiffs not limited to damages for defamation and trespass but double counting avoided - Operation of s 65A of Trade Practices Act and corresponding State Acts - Promo was advertising - Causation under legislative causes of action - false representations etc enabling greater attack on plaintiffs by telecaster enhancing program
LEGISLATION CITED:	Criminal Code Act Compilation 1913 Defamation Act NSW Environmental Planning & Assessment Act Fair Trading Act 1987 (NSW) Home Building Construction Act [1989] Occupational Safety & Welfare Act Environmental Planning and Assessment Act Queensland Defamation Act 1889 Trade Practices Act 1974 (Cwth) Workcover and Occupational Safety and Welfare Act
CASES CITED:	Bellino v Australian Broadcasting Corporation (1995-1996) 185 CLR 183 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 Enzed Holdings Ltd v Winthen Pty Ltd 57 ALR 167 Gray v Motor Accident Commission (1998) 196 CLR 1 Greek Herald Pty Limited v Nikolopoulos (2001) 54 NSWLR 165 Harris v Digital Pulse Pty Ltd (2002-2003) 56 NSWLR 298 at 342-346 Harris v McKenzie (1987) 9 NSWLR 139 Hawke v Tamworth Newspaper Co [1983] 1 NSWLR 699 Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) 8 IPR 25 Hunt v Star Newspaper Company Limited 1908 2 KB 309 Jones v Schiffmann (1971) 124 CLR 303 Lamb v Cotogno (1987) 164 CLR 1, Lloyd (1985) 3 NSWLR 728 Marks v GIO Australia Holdings Ltd & Ors (1998) 196 CLR 494 McIntosh v Lobel (1993) 30 NSWLR 441 Musca v Astle Corp Pty Ltd (1988) 80 ALR 251 NSW Aboriginal Council v Perkins (1998) 45 NSWLR 340 Newington v Windeyer (1985) 3 NSWLR 555 Newcastle City Council v Royal Newcastle Hospital 100 CLR 1 Pervan v North Queensland Newspaper Co Ltd (1994) 68 ALJR 1 Peter Walker and Son Ltd v Hodgson 1909 1 KB 239 Polly peck (Holdings) PLC v Trelford 1986 1 QB 1000 Radio 2UE v Parker 29 NSWLR 448 Re Ku-Ring-Gai Co-oP 36 FLR 134 Sattin v Nationwide News (1996) 39 NSWLR 32 Sims v Wran 1984 1 NSWLR 317 TCN Channel Nine Pty Limited v Anning (2002) 54 NSWLR 333 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Wheat v C. Lacon and Co Ltd 1966 AC 552 XL Petroleum v Caltex Oil (1985) 155 CLR 448 Yorke and Anor v Lucas (1985) 158 CLR 661
PARTIES:	Craftsman Homes Australia Pty Limited (First Plaintiff) Ilvarity Pty Limited T/as Craftsman Homes Northern Rivers & Craftsman Homes South West Sydney (Second Plaintiff) & Frederick Robert Cox (Third Plaintiff) v.TCN Channel Nine Pty Limited (First Defendant) (TCN9) Mike Munro (Second Defendant) & Ben Fordham (Third Defendant)
FILE NUMBER(S):	SC 20085/02
COUNSEL:	(P) J Garnsey QC & B Kinsella (D) B McClintock SC & M Richardson
SOLICITORS:	(P) G Donaghy & Co (D) Gilbert & Tobin

1.	Mike Munro	Well he's an award winning builder but you certainly wouldn’t know it looking at some of his work; tomorrow night we investigate some of his shoddy practices which have left home owners high and dry.
2.	Ian Vimpany	Within 2 months of moving in here these tiles have fallen off.
3.	Wayne Moss	This problem is a result of the floor being put down incorrectly.
4.	Gloria Vimpany	I nearly had a nervous breakdown when they did it.
5.	Noel Allan	I think I have had over 100 complaints, I mean we can't list them all here with you.
6.	Wayne Moss	I cannot believe that anyone can build something like this and remain in business.
7.	Ben Fordham To Vimpany	Have you given up?
8.	Ian Vimpany	Yes we've given up.
9.	Video of "Craftsman Homes" signage
10.	Voice Over
11.	Fred Cox	I'm sorry.
12.	Ben Fordham	Can we just ask you a couple more quick question?
13.	Fred Cox	No.
14.	Ben Fordham	You don’t want to answer the questions, you want us to go?
15.	Fred Cox	Get out or I'll call the police.
16.	Mike Munro	Ben Fordham with that investigation tomorrow.