Green v Fairfax Media Publications Pty Ltd [No 4]
[2021] WASC 474
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: GREEN -v- FAIRFAX MEDIA PUBLICATIONS PTY LTD [No 4] [2021] WASC 474
CORAM: LE MIERE J
HEARD: 19 HEARING DAYS BETWEEN 26 OCTOBER 2020 & 19 MARCH 2021
DELIVERED : 23 DECEMBER 2021
PUBLISHED : 23 DECEMBER 2021
FILE NO/S: CIV 1011 of 2019
BETWEEN: JEMMA MARIE GREEN
Plaintiff
AND
FAIRFAX MEDIA PUBLICATIONS PTY LTD
First Defendant
AARON ODYSSEUS PATRICK
Second Defendant
Catchwords:
Defamation – Newspaper and digital publication – Imputation that plaintiff causes unethical market manipulation – Imputations that plaintiff defrauds or alternatively misleads public and investors
Defences – Justification – Whether unethical market manipulation imputation and misleads imputation are substantially true
Defences – Honest opinion – Whether imputations were expression of opinion – Whether opinion related to matters of public interest – Whether opinion based on proper material
Damages – Assessment – Non–economic loss – General damages – Damage to reputation and professional standing – Personal harm and distress – Appropriate and rational relationship between harm suffered and damages awarded
Damages – Assessment – Non–economic loss – General damages – Extent of publication
Damages – Assessment – Aggravation – Whether conduct of defendants improper, unjustifiable or lacking in bona fides – False and inaccurate statements – Failure to apologise or retract – Further publications – Ongoing conduct of defendants
Damages – Assessment – Mitigation – Whether evidence in support of honest opinion and justification defences mitigates conduct of defendants – Whether plaintiff has reputation deserving of protection
Legislation:
Corporations Act 2001 (Cth)
Defamation Act 2005 (WA)
Evidence Act 1906 (WA)
Result:
Judgment for the plaintiff
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr M L Bennett |
| First Defendant | : | Mr A T S Dawson SC, Dr D Roche & Ms S Jeliba |
| Second Defendant | : | Mr A T S Dawson SC, Dr D Roche & Ms S Jeliba |
Solicitors:
| Plaintiff | : | Bennett + Co |
| First Defendant | : | Banki Haddock Fiora |
| Second Defendant | : | Banki Haddock Fiora |
Cases referred to in decision:
Ali v Nationwide News Pty Ltd [2008] NSWCA 183
Amalgamated Television Services Pty Ltd v Marsden [1998] NSWSC 4; (1998) 43 NSWLR 158
Australian Broadcasting Corporation v Chow Chak Wing [2019] FCAFC 125; (2019) 271 FCR 632
Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) [2012] FCA 1355; (2012) 207 FCR 448
Burstein v Times Newspapers Ltd [2001] 1 WLR 579
Cairns v Modi [2012] EWCA Civ 1382; [2013] 1 WLR 1015
Cassell & Co Ltd v Broome [1972] AC 1027
Cerutti v Crestside Pty Ltd [2014] QCA 33; [2016] 1 Qd R 89
Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245
Chau v Australian Broadcasting Corporation (No 3) [2021] FCA 44; (2021) 386 ALR 36
Chau v Fairfax Media Publications Pty Ltd [2019] FCA 185
Cheng v Lok [2020] SASC 14
Coxon v Williams [2016] WASCA 48
Craftsman Homes Australia Pty Ltd v TCN Channel Nine Pty Ltd [2006] NSWSC 519
Cross v Queensland Newspapers Pty Ltd [2008] NSWCA 80
Cummings v Fairfax Digital Australia & New Zealand Pty Ltd [2018] NSWCA 325; (2018) 99 NSWLR 173
Darwin v Norman [2020] NSWSC 357
Doyle v Smith [2018] EWHC 2935 QB
Edwards v Bell (1824) Bing 403; (1825) 130 ER 162
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 221 ALR 186
Feldman v Polaris Media Pty Ltd as trustee of the Polaris Media Trust t/as The Australian Jewish News [2020] HCATrans 162
Feldman v Polaris Media Pty Ltd as trustee of the Polaris Media Trust t/as The Australian Jewish News [2020] NSWCA 56; (2020) 102 NSWLR 733
Feldman v Polaris Media Pty Ltd as trustee of the Polaris Media Trust trading as the Australian Jewish News (No 2) [2018] NSWSC 1035
Forest v Australian Securities and Investments Commission (2012) 247 CLR 486
Goldsborough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 525
Gorton v ABC (1973) 22 FLR 181
Greek Herald Pty Ltd v Nikolopoulous [2002] NSWCA 41; (2001) 54 NSWLR 165
Green v Fairfax Media Publications Pty Ltd [No 3] [2021] WASC 7
Grobbelaar v News Group Newspapers Ltd [2002] UKHL 40; 1 WLR 3024
Harbour Radio Pty Ltd v Ahmed [2015] NSWCA 290; (2015) 90 NSWLR 695
Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1
Hockey v Fairfax Media Publications Pty Ltd [2015] FCA 652; (2015) 237 FCR 33
Howden v Truth & Sportsman Ltd (1937) 58 CLR 416
Humphries v TWT Ltd (1993) 120 ALR 693
Hunt v Star Newspaper Co Ltd [1908] 2 KB 309
Jensen v Nationwide News Pty Ltd (No 13) [2019] WASC 451
John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 201 ALR 77
John v MGN Ltd [1997] QB 586; [1996] 3 WLR 593
Koutsogiannis v The Random Home Group [2019] EWHC 48 (QB); [2020] 4 WLR 25
Lewis v Daily Telegraph [1964] AC 234
Maisel v Financial Times Ltd [1915] 3 KB 336
McKay v Commissioner of Main Roads (No 2) [2010] WASC 153
Montgomery v Thompson [1891] AC 217
Murphy v Nationwide News Pty Ltd [2021] FCA 381
Nationwide News Pty Ltd v Rush [2020] FCAFC 115; (2020) 380 ALR 432
O'Brien v Australian Broadcasting Corporation [2016] NSWSC 1289
O'Neill v Fairfax Media Publications Pty Ltd (No 2) [2019] NSWSC 655
Pahuja v TCN Channel Nine Pty Ltd (No 3) [2018] NSWSC 893
Poniatowska v Channel Seven Sydney Pty Ltd (No 2) [2020] SASCFC 5; (2020) 136 SASR 455
R v Credit Tribunal ex parte General Motors Acceptance Corp (Aust) (1977) 137 CLR 545
R v De Berenger (1814)105 ER 536
Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460
Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496
Smith's Newspapers Ltd v Becker (1932) 47 CLR 279
Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15; (2021) 387 ALR 123
Tavakoli v Imisides (No 4) [2019] NSWSC 717
Tinkler v Ferguson [2018] EWHC 3563 (QB)
Tinkler v Ferguson [2019] EWCA Civ 819
Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497
Trkulja v Google LLC [2018] HCA 25; (2018) 263 CLR 149
Wagner v Harbour Radio Pty Ltd [2018] QSC 201
Wagner v Nine Network Australia Pty Ltd [2019] QSC 284
Watney v Kencian [2018] 1 QdR 407
West Australian Newspapers Ltd v Elliott (2008) 37 WAR 387
Table of Contents
Summary
Outline of the case
The matters complained of
Imputations conveyed by spruikers article and second website article
Imputations conveyed by $2 billion article and first website article
The issues
The parties
The plaintiff
The defendants
Power Ledger
The company
Blockchain
Initial Coin Offering (ICO)
Power Ledger publications
The White Paper
Disclosure Document
Token Paper
Bounty Paper
Other documents
Token Generation Event (ICO)
Evidence
Testimonial lay evidence
Dr Green
John Bulich
Documentary evidence
Disputed documentary evidence
Expert evidence
Prof Wills and Mr Price
Prof Buckley
The defendants' honest opinion defence
Defence of honest opinion – legal principles
The defendants' pleaded defence of honest opinion
Matter of public interest
Proper material
Defence of honest opinion fails
Is the unethical market manipulation imputation substantially true?
What the defendants must prove
The defendants pleaded truth defence
The defendants have not proved market manipulation
The defendants have not proved Dr Green caused market manipulation
The defendants' truth defence to spruikers article fails
Do the $2 billion article and first website article convey the defrauds imputation?
The pleaded imputations
Relevant principles concerning imputations conveyed by publications
First impression
Analysis of $2 billion article
Does the first website article convey the defrauds imputation?
Is the misleads imputation substantially true?
Why it is necessary to consider defence of truth
The misleads imputation is a general imputation
Legal principles
The gist of the misleads imputation
The defendants pleaded defence of truth
Unethical market manipulation
The Elon Musk rumour
The pleading
The tweets and messages
The Huffington Post article
Likelihood of success
The organisation of the defence
The vulnerabilities
The notion of vulnerabilities
Regulatory vulnerability
Platform user base vulnerability
Vulnerabilities – not misleading
The Origin trial
Renew Nexus
POWR Token
Defendants have not established defence of truth
Liability – Dr Green is entitled to damages
Damages
Purpose of damages
Aggravated damages
Spruikers article and second website article contain false and inaccurate statements
$2 billion article and first website article contain false and inaccurate statements
The articles inaccurately attributed statements to third parties
Subsequent publications
Failure to apologise and retract
Further alleged aggravating conduct
Mr Patrick nominated himself for Westpac journalism award
Mr Patrick contacted former Power Ledger employees
Maintaining plea of justification
Mitigation
Damages should be assessed as single sum
Extent of publication
Injury to feelings
Gravity of allegations
Effect on reputation
Vindication
Comparable awards
Conclusion
Injunction
LE MIERE J:
Summary
The plaintiff, Dr Jemma Green, is a co‑founder and chairman of Power Ledger Pty Ltd which carries on business as an Australian blockchain based energy trading platform which facilitates decentralised buying and selling of renewable energy.
The first defendant, Fairfax Media Publications Pty Ltd, is the publisher of The Australian Financial Review Weekend newspaper and is liable for the republication of material published in the AFR Weekend newspaper on the AFR Website. The second defendant, Mr Aaron Patrick, is a journalist employed by Fairfax Media Publications.
On 28 December 2018 the defendants published in The Australian Financial Review Weekend newspaper two articles written by Mr Patrick. The first article is entitled 'Blockchain firm in gun over spruikers' (the spruikers article). The subject of the spruikers article is that Dr Green and Power Ledger rewarded 'bounty hunters' (persons paid 'bounty' for online promotions) and fake social media profiles for spruiking its digital currency. The defendants published on the AFR Website an online version of the article in substantially the same terms (the second website article).
The second article is entitled 'How to make and lose $2 billion' (the $2 billion article). The subject of the article is the money made and lost by Dr Green, overhyping Power Ledger and its POWR tokens, the failure of Power Ledger to meet the expectations generated by her overhyped promotion of the business which is not viable, and that Power Ledger's POWR tokens are not worth what was paid for them. The defendants published on the AFR Website an online version of that article in substantially the same terms (the first website article).
Dr Green claims, and the defendants do not dispute, that the spruikers article and the second website article convey the imputation that Dr Green causes unethical market manipulation by Power Ledger by using undisclosed paid spruikers to promote it and its POWR token (the unethical market manipulation imputation) and is defamatory of her. The defendants plead that that defamatory imputation is substantially true. The defendants further plead the defence of honest opinion pursuant to s 31(3) of the Defamation Act 2005 (WA) in that the defamatory matter was an expression of opinion of Peter Williams, who was not an employee or agent of the defendants, which opinion related to a matter of public interest and is based on proper material.
Dr Green claims, and the defendants deny, that the $2 billion article and the first website article convey the imputation that Dr Green by her creation, promotion and operation of Power Ledger, defrauds the public and investors (the defrauds imputation). Alternatively, Dr Green claims, and the defendants do not dispute, that the $2 billion article and the first website article convey the imputation that Dr Green by her creation, promotion and operation of Power Ledger misleads the public and investors (the misleads imputation), which defames her. The defendants plead that that imputation is substantially true.
Dr Green claims damages, including aggravated damages, and a permanent injunction restraining the defendants from republishing the articles or similar words.
For the reasons which follow:
(1)The defendants have not made out the defences of justification or honest opinion to the spruikers article and the second website article and Dr Green is entitled to an award of damages in respect of those publications.
(2)The $2 billion article and the first website article convey the defrauds imputation and Dr Green is entitled to an award of damages in respect of those publications.
(3)If, contrary to my finding, the $2 billion article and the first website article do not convey the defrauds imputation, they convey the misleads imputation and defame Dr Green. The defendants have not made out the defence of justification of that imputation and Dr Green would be entitled to an award of damages in respect of those publications.
(4)Dr Green is entitled to aggravated damages.
(5)Dr Green is entitled to damages of $400,000 including aggravated damages.
(6)Whether an injunction should issue restraining the defendants from republishing the articles or similar words is deferred until after publication of these reasons for decision.
Outline of the case
The matters complained of
The spruikers article and the $2 billion article were published on pages 6 and 12 respectively of the AFR Weekend newspaper of 28 December 2018. A pointer on the front cover contained a photograph of Dr Green with the words:
Blockchain rock star
Virtual high: How to make and lose $2b
The spruikers article appeared in the News section of the newspaper under the headline 'Blockchain firm in gun over spruikers' and the subhead 'Initial coin offerings'. A block of highlighted text said:
Key points
Power Ledger used 'bounty hunters' to drive interest in its digital currency.
The start‑up's token is now trading about 20% below its issue price.
A note at the end of the article referred the reader to the $2 billion article on page 12.
The second website article appears under the headline 'Blockchain start‑up Power Ledger criticised for paying spruikers'. It contains a photograph of Dr Green with the caption: 'Jemma Green says the company wanted to create grass root support for the currency sale'.
The $2 billion article appears on the first page of the Perspective section of the AFR Weekend newspaper, which is page 12 of the newspaper. The article, which takes up the whole of page 12 and half of page 13, appears under the headline 'How to make and lose $2 billion' which is accompanied by a large photograph of Dr Green and a block of text that introduces the story:
Blockchain The Pitch from Power Ledger's Jemma Green was almost impossible to understand, but her ambition was unmistakeable. Aaron Patrick analyses whether there's more than just hype to the Australian entrepreneur's power trading start‑up.
The first website article appears under the headline 'How to make and lose $2 billion on blockchain'. It is accompanied by a photograph of Dr Green with Richard Branson and the caption 'Power Ledger founder Jemma Green won the Extreme Tech Challenge in 2018 which was judged at Richard Branson's private island in the Caribbean'. It contains the subheadings 'Over‑hyped?', 'The Blockchain Frenzy', 'Going places in Perth', 'Sounds like an IPO', 'Transparency needed', 'A market that doesn't exist', 'Uneconomic trading' and 'The road is not always straight'.
Imputations conveyed by spruikers article and second website article
Dr Green claims, and the defendants do not dispute, that the spruikers article and the second website article convey the unethical market manipulation imputation.
I find the spruikers article and the second website article convey the unethical market manipulation imputation.
As the spruikers article and the second website article convey the unethical market imputation, it is unnecessary to consider the alternative imputation pleaded by Dr Green that she actively encourages unethical market manipulation by Power Ledger by using undisclosed paid spruikers to promote it and its POWR token.
Imputations conveyed by $2 billion article and first website article
Dr Green claims that the $2 billion article and the first website article convey the imputation that Dr Green by her creation, promotion and operation of Power Ledger, defrauds the public and investors (the defrauds imputation) and alternatively conveys the imputation that Dr Green by her creation, promotion and operation of Power Ledger, misleads the public and investors (the misleads imputation). The defendants deny that the articles convey the defrauds imputation but admit that they convey the misleads imputation.
The issues
The competing claims and contentions of the parties give rise to seven main issues:
(1)Is the defamatory matter in the spruikers article and the second website article an expression of opinion of Peter Williams, which opinion related to a matter of public interest and is based on proper material?
(2)Is the defamatory unethical market manipulation conveyed by the spruikers article and the second website article, substantially true?
(3)Do the $2 billion article and the first website article convey the defrauds imputation?
(4)If the $2 billion article and first website article do not convey the defrauds imputation but do convey the misleads imputation, is the misleads imputation substantially true?
(5)If Dr Green is entitled to an award of damages, are the circumstances of the publication of the defamatory matter such as to warrant an award of aggravated damages?
(6)If Dr Green is entitled to an award of damages, what is the amount of damages to be awarded to Dr Green?
(7)Should the court grant an injunction to restrain the defendants from republishing the articles or similar words?
The parties
The plaintiff
Dr Jemma Green was born in Perth. She graduated from Murdoch University with a degree in commerce majoring in finance. In 2000 she moved to the United Kingdom where she was employed for about a year by the Royal Bank of Scotland working in interest rate derivatives as a trader assistant. Dr Green then moved to JP Morgan in London as an investment banker. From about 2004 to 2007 she worked as a consultant in exotic and hybrid equity derivative risk. Dr Green then moved within JP Morgan to work in environmental risk. Whilst she was in the United Kingdom, Dr Green completed a Master's degree by research and two post‑graduate diplomas from Cambridge University.
After a while travelling and trekking, Dr Green returned to Perth. In 2015 she commenced a thesis entitled 'Disruptive innovation and mainstreaming low cost and low carbon housing' as part of the requirements for the degree of Doctor of Philosophy at Curtin University, which she completed in April 2017. Dr Green was a research fellow at Curtin University.
Dr Green undertook several consultancies. In 2015 Dr Green was elected a councillor of the City of Perth. She was elected Deputy Lord Mayor in October 2017.
In 2016 Dr Green co‑founded Power Ledger. The concept of Power Ledger was based in part upon her PhD thesis.
In 2018 Dr Green won the EY National Fintech Entrepreneur of the year and Sir Richard Branson's Extreme Tech Challenge awards.
Dr Green was appointed by the Minister for Water to the board of the Water Corporation in July 2017, re-appointed on 13 November 2019 and remained a board member until December 2020.
The defendants
The first defendant is one of Australia's major media companies. It publishes newspapers and web editions of its newspaper titles. The Australian Financial Review is a newspaper focused on business, finance and investment news and is widely read amongst Australia's business and investor community.
The second defendant, Aaron Patrick, is a senior correspondent who writes about business matters in the Australian Financial Review. He won a Westpac Excellence in Financial Journalism award for the $2 billion article. Mr Patrick filed a witness outline but did not give evidence.
Power Ledger
The company
Power Ledger is a private company founded in 2016 by Dr Green, David Martin, Govert Van Ek, John Bullich and Jenni Conroy. Dr Green has been a director and chairman of Power Ledger since its foundation. Power Ledger operates a blockchain based energy trading platform or ecosystem.
Blockchain
Blockchains operate as a decentralised distributed database which maintains a continuously growing list of records called blocks. Blockchains are software that assemble bundles of data, store the data in blocks, and link (chain) the blocks together sequentially using cryptography and time stamps. Each block is chained back to the previous block by containing a hash (unique identifier) of the representation of the previous block. The blocks of data are stored on nodes which are devices such as computers or laptops of the participants in the blockchain network.
Blockchains are different from regular files or databases, in which information can be edited and deleted at will. Once data is added to the chain, some cryptography ensures that it cannot be changed or removed except by the consensus of the participants in the blockchain network. This makes blockchain trustworthy in the sense that it does not depend on, and cannot be amended, by a trusted third party.
Initial Coin Offering (ICO)
In 2017 Power Ledger sold POWR tokens to fund its work and continue development. Power Ledger described this sale as the Token Sale or Token Generation Event (TGE). The defendants describe the sale as an initial coin offering or ICO. Professor Buckley says that ICOs emerged in 2016 as a new way of using blockchain technology to raise peer‑to‑peer capital. ICOs are not well named as they are usually neither initial (there are usually presales, as was the case with Power Ledger) nor involve coins (cryptocurrencies or tokens are typically offered, not coins).
Power Ledger publications
In preparation for the TGE or ICO, Power Ledger published four publications on its website:
(1)Power Ledger White Paper (the White Paper);
(2)Power Ledger Disclosure Document (the Disclosure Document);
(3)Power Ledger Token Paper (the Token Paper); and
(4)Power Ledger Bounty Campaign (the Bounty Paper).
I will refer in some detail to these papers because they describe Power Ledger's blockchain energy trading platform and its business. They are also critical to the defendants' plea that the imputation that Dr Green misleads the public and investors is substantially true. Part of that defence is that Dr Green misled investors and the public by making favourable statements about the likelihood of Power Ledger succeeding as a business without disclosing specified vulnerabilities, that is weaknesses. The favourable statements relied upon by the defendants are primarily within the White Paper and the Disclosure Document.
A vision statement appears on the front cover of the documents:
We believe empowering individuals and communities to co-create their energy future will underpin the development of a power system that is resilient, low-cost, zero-carbon and owned by the people of the world.
The White Paper
In 2017 Power Ledger published the White Paper on its website. In government, a White Paper presents government policies. The Power Ledger White Paper describes itself as 'a technical white paper setting out the current and future developments of the Power Ledger Platform and Power Ledger Ecosystem'.
The defendants rely upon statements in the White Paper which they submit are 'positive misleading statements about the likelihood of Power Ledger succeeding as a business.' I have considered each of the statements referred to by the defendants, but it is unnecessary to recite each of those statements and to do so would unnecessarily increase the length of these reasons. I will refer to some of the statements in the White Paper because they are emphasised by the defendants or because they help explain Power Ledger's Platform and its business.
The White Paper is divided into six sections, each of which has multiple subsections.
Section 1: Business and Industry Overview begins with Section 1.1: The Power of Power which, amongst other things, says:
The energy industry used to be simple.
Vertically-integrated utilities sat in the middle of the system… they decided where and when to build generating capacity; they decided how to bridge the distance between generators and loads; they kept the system in balance through the deft application of the levers available to a centralised controlling entity.
…
But a global technology revolution has changed the power balance between consumers and centralised power authorities. The booming market in Distributed Energy Resources (DER) like solar photovoltaic systems (PV), batteries, microgrids and embedded networks has moved the power from central authorities to the edges of the grid, to where citizens have control.
…
All that is needed to move the revolution into the mainstream is a model for energy trading that takes control out of the hands of central players and puts everyday citizens in charge of a co-created energy future.
The Power Ledger Ecosystem is that platform.
Section 1.2: The Market Size refers to the global energy market, a future move to self-supply rather than energy supplied by the network and that the new paradigms will see ever-increasing levels of automation and resilience led, not by a small number of large-scale centralised investments, but by millions of micro-investments distributed across the system.
Section 1.4: A Trustless Trading Platform refers to a trading platform being a network that allows consumers to sell energy to their peers in a trustless environment and says that blockchain enabled P2P energy trading will transform energy networks into trading platforms and invoke a transactive economy that moves away from bilateral retail arrangements to multi-lateral trading ecosystems, preserving networks relevance to consumers.
Section 2: Platform Applications lists the:
key classes of Platform Applications developed by Power Ledger… with some already operational, and others in advanced conceptual design or in development.
The defendants draw attention to Section 2.1: P2P Trading which says:
This class of Platform Application gives retailers the ability to empower consumers (or in an unregulated environment the consumers themselves) to simply trade electricity with one another and receive payment in real-time from an automated and trustless reconciliation and settlement system.
Nine other applications are listed and described.
Dr Green explained that since the publication of the White Paper, Power Ledger has adopted different descriptions of the functions of its platform. Those functions relevantly now include xGrid, uGrid and Balance.
Section 3: Power Ledger's Achievements lists major challenges facing the energy system globally and some Power Ledger achievements.
Section 4: Technical Overview provides a high-level overview of the Power Ledger Platform. The paper explains the function of POWR and Sparkz tokens:
The market flexibility of the Ecosystem is facilitated by deployment of a dual token Ecosystem (POWR and Sparkz) operating throughout its two blockchain layers.
POWR tokens are the frictionless blockchain tokens that allow Application Hosts and Participants access to and use of the Platform (like a limited software licensing permission).
Sparkz tokens are issued against escrowed POWR tokens, via a Smart Bond, and used by the Application Host to on board its customers.
Application Hosts are entities and businesses that run an Application on the Platform. For example, a utility company using the Platform will be an Application Host, as is an EV-charging services business. A Decentralised Autonomous Organisation can also become an Application Host.
The Technical Overview section refers to two models. The retail model for working with existing market structures shows the design architecture where Application Hosts (ie an energy utility company) will buy POWR tokens from the open market. Application Hosts acquire a POWR token to gain admission to the ecosystem and then acquire further POWR tokens as needed from the Public Token Exchange to convert into Sparkz tokens at the Power Ledger Token Exchange. Application Hosts contract with consumers and prosumers (someone who both produces and consumes energy) who wish to engage in peer‑to‑peer electricity trading (consumers trade energy amongst one another). Application Hosts then sell Sparkz tokens to consumers who use these to pay for electricity received from prosumers. Application Hosts stand ready to redeem Sparkz tokens for fiat currency (eg AUD) from the prosumers who earn them and from Network Providers who receive them as payment for their transmission service.
The second model is the direct peer‑to‑peer model for working within deregulated market structures. In a deregulated market, participants will be able to trade directly with each other without the need for intermediaries. Participants will be able to convert their POWR tokens directly to Sparkz and transact on the Platform without an Application Host.
Power Ledger issued POWR tokens which allow holders to consume and provide energy through the platform. To use services on the Platform, each participant or Applicant Host will require POWR tokens to transact for Sparkz. Once an Application Host has exhausted all POWR tokens, they can no longer transact on the platform until they obtain more POWR to provide Platform access. The POWR tokens may be obtained on public exchanges. Exchanges are independent of and not operated by Power Ledger.
POWR tokens can be exchanged for other currencies and therefore have a market value.
Section 5: Technology Application Layers includes the phrase: 'Sustainable public blockchain's other future!' It explains the blockchain used by the Power Ledger Platform.
Section 6: Roadmap & Milestones sets out goals to be achieved between the third quarter 2017 and the third quarter 2019.
Power Ledger updated the White Paper in 2018 and 2019 but the White Paper remained essentially the same and it is unnecessary to refer to any changes.
Disclosure Document
The Disclosure Document is divided into three sections: Company Disclosure, The POWR Tokens and Risks ‑ Token Generation Event, and POWR Tokens.
The Company Disclosure section states that Power Ledger was founded in 2016 and has received funding from private investors and is running its operations from its cash reserves. In relation to key assets, the Disclosure Document states that Power Ledger owns all intellectual property rights to the extent possible in the technology comprising the Power Ledger Platform.
The POWR Tokens section states that POWR tokens are not intended to be structured or sold as securities, commodities, digital currencies or any other form of financial or investment product and accordingly 'none of the information presented by Power Ledger in respect of the POWR tokens is intended to form the basis for any investment decision and no recommendations are intended'. The Disclosure Document says that ownership of POWR tokens carries no rights, express or implied, other than the right to use the tokens as a means to enable usage of and interaction with the Power Ledger Ecosystem if successfully completed and deployed (my emphasis).
The Risks section says that there are risks associated with the use of blockchain token technology for the POWR token sale process, and the purchase of POWR tokens generally. There is a warning:
Do not purchase POWR tokens if you are not an expert in dealing with cryptographic tokens and blockchain based software systems.
There is a further warning that the purchase of POWR tokens entails a number of risks including risk associated with markets for POWR, in relation to which the Disclosure Document states:
The POWR tokens are intended to be used solely with the Platform for Services of peer‑to‑peer energy trading and as Power Ledger is using the ERC20 protocol, Power Ledger cannot control the actions of Purchasers of POWR tokens. Even if secondary trading of POWR tokens is facilitated by third party exchanges, such exchanges may be relatively new and subject to little or no regulatory oversight, making them more susceptible to fraud or manipulation. Furthermore, to the extent that third parties ascribe an external exchange value to POWR tokens (eg as denominated in a digital or fiat currency), such value may be extremely volatile and diminished to zero. If you choose to use POWR tokens on exchanges it is at your risk. Exchanges are independent of and not operated by Power Ledger.
A further risk is stated to be the risk of insufficient interest in the Platform. It is said that it is possible there will be limited public interest in the use of POWR tokens for peer‑to‑peer energy trading and it is possible due to reasons, including the failure of business relationships or marketing strategies, that the Power Ledger Platform and all subsequent marketing of the sale of POWR tokens from Power Ledger may fail to achieve success.
A further stated risk is that cryptographic tokens may experience risk of extreme price volatility. The document says that POWR tokens are not intended to represent any formal or legally binding investment and cryptographic tokens that possess value in public markets, such as Ethereum (ETH) and Bitcoin (BTC), have demonstrated extreme fluctuations in price over short periods of time on a regular basis and:
You should be prepared to expect similar fluctuations, both down and up, in the price of POWR denominated in ETC, BTC or USD, or currencies of other jurisdictions. Such fluctuations are due to market forces and represent changes in the balance of supply and demand.
Token Paper
The Token Paper provides information in relation to Power Ledger's proposed Token Generation Event or Token Sale.
The Token Paper says that 1 billion POWR tokens had been created which will be allocated as follows:
•600 million allocated to the distribution pool;
•250 million reserved for future use if needed (Power Ledger Escrow); and
•150 million allocated under escrow to developers and founders.
Of the 600 million allocated to the distribution pool, 350 million tokens are to be available at the time of the Token Sale, 248.5 million will be held in Power Ledger's Growth Pool for future funding of Power Ledger and the Platform and 1.5 million are allocated towards the Bounty Campaign.
The Token Paper says that the POWR tokens sold during the Token Sale will be used to fund Power Ledger's work, to continue development and scale the Platform to global deployment. Power Ledger may conduct some pre‑sales of the POWR Token prior to the public Token Sale which would likely include a discount for such early adopters. There will be no minimum raise amount set. All 350 million tokens will be issued following the close of the Token Sale regardless of the amount raised. Payment accepted for the public Token Sale will include Ethereum, Bitcoin and Litecoin.
The Token Sale contains a development roadmap with the following milestones:
•Q3 2017 token generation event;
•Q4 2017 token on exchange, application development and green energy loyalty rewards program;
•Q1 2018 begin distribution of growth pool, technology layers transition;
•Q3 2018 first asset germination event, marketing and partnerships;
•Q4 2018 beta test of new applications;
•Q2 2019 frequent asset germination events, transition to public blockchain; and
•Q3 2019 power port and future applications.
Bounty Paper
Power Ledger promoted its sale of POWR tokens described as the Token Generation Event, and also described as an ICO, through its Bounty Campaign. Power Ledger posted on its website the Bounty Paper which provided information about its Bounty Campaign including how POWR tokens could be earned by making social media posts which referred to Power Ledger. A bounty is a reward in the form of POWR tokens given to supporters for tweeting, posting or clicking about Power Ledger on Twitter, Facebook and Bitcoin Talk respectively or writing a blog or article with links to the Power Ledger Website.
The Bounty Paper makes the following statements. Power Ledger is holding a Token Generation Event (TGE) for the sale of POWR Tokens. Power Ledger is holding a Bounty Campaign, a programme to reward supporters to facilitate the TGE. Participants in the Bounty Campaign are rewarded with POWR tokens. The total of 1,500,000 POWR tokens from the TGE will be allocated to the Bounty Pool for eligible Bounty Participants.
The Bounty Paper says that Bounty Participants must register in the Bounty Registration system and sets out the requirements to do so. The Bounty breakdown is stated to be 15% Facebook Bounty, 15% Twitter Bounty, 40% Content Creation Bounty and 30% Bitcoin Talk Bounty. There are rules stated for Twitter campaign. Tweets will attract 10 Bounty reward points and retweets five points. Additional points will be allocated proportional to the participant's number of followers. Facebook campaign rules include five bounty reward points for 'likes' and 15 points for 'shares' of posts published by Power Ledger on the Power Ledger Facebook page. Bounty reward points are awarded for clicks on Bitcoin Talk of different ranks. Content creation refers to writing or publishing a blog or article of at least 250 words containing at least two links to the Power Ledger website. Power Ledger's Content Assessors will assess the video, blog or published article and award Bounty reward points according to the assessed content standard.
The general Bounty Campaign rules state that all rewards will be made at Power Ledger's discretion and if Power Ledger believes there is manipulation of the Campaign Rules in any form, including generation of artificial Likes, Shares, Clicks, fraudulent account use or spamming, the Bounty Participant will be disqualified from the Bounty Campaign and receive no rewards.
Other documents
The defendants refer to 'favourable statements' in other documents, specifically the Token Interaction Paper, the Common Questions Article, a quotation provided by Dr Green to SmartCompany, and a statement on Power Ledger's website page 'About Us'. However, whilst I have had regard to those statements, it is unnecessary to refer to their contents because counsel for the defendants, Dr Roche, submitted that it was sufficient to have regard to the 'favourable statements' in the White Paper and the Disclosure Document.
Token Generation Event (ICO)
Power Ledger created 1 billion POWR tokens. One hundred and fifty million tokens (the Developers and Founders tokens) were distributed to Power Ledger's directors, employees and contractors engaged in the building of the Platform. Those tokens were subject to escrow for a period of between six and 18 months to commence at the completion of the Token Sale. Two hundred and fifty million tokens (the Power Ledger Escrow tokens) were retained for any future funding needs of Power Ledger and the Platform. These tokens were to be held in escrow for two years from the date of distribution. The remaining 600 million tokens were allocated to the Distribution Pool, of which 350 million were made available to the public by the Token Sale, 1.5 million were allocated to the Bounty Campaign and 248.5 million were held in Power Ledger's Growth Pool for growing the number of users on the Platform.
Power Ledger commenced presales of POWR tokens on 27 August 2017 and closed presales on 3 September 2017. Power Ledger sold approximately 100 million tokens to its strategic partners and to potential early adaptors of the Power Ledger Platform and raised in US dollars an amount approximately equivalent to A$17 million. The public sale, described in the pleadings as the ICO Proper, commenced on 8 September 2017 and closed on 5 or 6 October 2017. During the ICO Proper Power Ledger sold about 150 million POWR tokens and raised in US$ an amount approximately equal to A$17 million.
Evidence
Testimonial lay evidence
Dr Green
In their closing written submissions, Dr Green's counsel described her as a highly intelligent, knowledgeable, articulate and passionate believer in the important social function of disruptive innovation and presented as such when giving her evidence.
The defendants also submitted that Dr Green presented as a highly intelligent person who was well prepared to give evidence, but submitted that the Court should reject specific aspects of her evidence and otherwise treat her evidence with considerable caution. The defendants attacked Dr Green's credibility in relation to two matters in particular – her failure to give proper discovery and her evidence in respect of her involvement in Power Ledger's business.
Failure to give proper discovery
I outlined the history of the plaintiff's discovery in my reasons for judgment on the defendants' application to permanently stay the action on the ground that the plaintiff had failed to comply with her discovery obligations.[1] I will repeat the most relevant aspects of that history.
[1] Green v Fairfax Media Publications Pty Ltd [No 3] [2021] WASC 7.
By consent, the court made orders on 17 June 2019 that the parties give discovery on affidavit. On 29 July 2019 Dr Green filed and served a list of documents verified by affidavit.
On 22 August 2019 Dr Green filed and served an amended statement of claim which included further allegations relevant to her claim for aggravated damages. On 26 August 2019 the Court made orders, by consent, that the parties file and serve any supplementary affidavit of discovery. Pursuant to that order, on 13 September 2019 Dr Green filed a supplementary affidavit of discovery.
On 21 March 2020 the defendants amended their defence to plead that the unethical market manipulation imputation pleaded by Dr Green to be conveyed by the spruikers article and the second website article, and the misleads imputation pleaded by Dr Green to be conveyed by the $2 billion article and the first website article, are true. On 3 April 2020 Dr Green served an informal discovery list. Following a successful strikeout application by Dr Green, on 29 July 2020 the defendants filed a further reamended defence. On 5 August 2020 the Court made orders, by consent, that the parties provide any further discovery by 28 August 2020. On 25 August 2020 Dr Green filed an amended reply. On 2 September 2020 Dr Green filed a second supplementary list of documents verified by affidavit.
On 25 September 2020 Dr Green filed a further reamended statement of claim and the defendants filed a substituted defence.
Between 12 December 2019 and 5 October 2020 the defendants made inquiries of Dr Green concerning her discovery and deficiencies in her discovery and Dr Green responded to those inquiries. On 5 October 2020 Dr Green filed her third supplementary list of documents verified by affidavit.
On 9 October 2020, on the application of the defendants and after a contested hearing, I made orders that Dr Green give discovery of documents in four categories. On 19 October 2020 Dr Green filed and served a list of documents verified by affidavit pursuant to the orders of 9 October 2020.
On 23 October 2020 the defendants filed and served a notice to produce. Dr Green produced the document requested on 25 October. On 26 October 2020 the defendants filed and served a second notice to produce. Dr Green produced documents pursuant to that notice on 27 October 2020. On 1 November 2020 the defendants served a third notice to produce. Dr Green provided documents and responded to that notice on 4 November 2020.
The trial commenced on 26 October 2020. Counsel for the defendants appeared by video link from Sydney. Counsel for Dr Green and the defendants made opening submissions on 26 and 27 October 2020. Dr Green gave evidence‑in‑chief on 27 and 28 October 2020. Regrettably, the trial was then adjourned to enable the defendants' counsel to move to a location from which a better video link could be obtained. Senior Counsel for the defendants, Mr Dawson SC, commenced cross‑examination of Dr Green on Monday, 2 November 2020 and continued until Thursday, 5 November 2020. On 5 and 6 November Mr Bulich, who was called to give evidence by Dr Green, gave evidence‑in‑chief and was cross‑examined. Dr Green closed her case on Friday, 6 November 2020.
On the evening of Thursday, 5 November 2020 the defendants gave notice of an application for orders that Dr Green give discovery of documents in relation to three matters. On Friday, 6 November 2020, after the completion of the evidence of Mr Bulich, I heard the defendants' application and made orders that Dr Green give further discovery of specified documents. On 9 November 2020, pursuant to the orders of 6 November 2020, Dr Green filed and served a fifth supplementary affidavit of discovery.
The trial resumed on 10 November 2020. The defendants adduced expert evidence from Mr Price and Professor Buckley which completed the defendants' oral evidence. The defendants then moved that the trial be adjourned to enable the defendants to consider what, if any, orders they would move for as a result of the documents provided by Dr Green pursuant to the fifth supplementary discovery affidavit.
On 15 and 16 December 2020 I heard an application by the defendants to permanently stay the action on the ground that Dr Green had failed to comply with her discovery obligations and her non‑compliance was an abuse of the process of the court, or alternatively, for orders amending their defence, orders for further discovery by Dr Green and that the defendants have leave to recall and cross‑examine Dr Green and Mr Bulich at the resumption of the trial. On 15 January 2021 I dismissed the defendants' application that the proceedings be permanently stayed, gave the defendants leave to amend their substituted defence, ordered that Dr Green give discovery of further specified documents and ordered that at the resumption of the trial the defendants have leave to recall Dr Green and Mr Bulich for further cross‑examination.
On 29 January 2021 Dr Green filed and served a further affidavit of discovery in compliance with the orders of 15 January 2021.
The trial resumed on 2 March 2021. Senior counsel for the defendants was unable to resume. Junior counsel for the defendants, Dr Roche, cross‑examined Dr Green for a day and a half and there was a brief re‑examination. Dr Roche cross‑examined Mr Bulich for about 20 minutes.
In an affidavit sworn on 11 December 2020, Dr Green explained her failure to give proper discovery before 6 November 2020. Dr Green denied that she deliberately attempted to withhold documents from the defendants relevant to their truth defences. The defendants submit that Dr Green's explanation for her failure to give proper discovery is unsatisfactory.
In my judgment on the defendants' application for a permanent stay of the proceedings, I found that Dr Green had failed to discover discoverable documents and that a number of factors contributed to that failure. First, Dr Green and her solicitors took a too narrow view of some of the matters in question in this action. That led to the failure of Dr Green to discover some business plans, strategic plans and revenue models for Power Ledger. I found that Dr Green and her legal representatives were wrong in the view they took of the matters in question in the action. I found that Dr Green and her solicitors held that view in good faith and her failure to discover those documents until ordered to do so did not evidence a conscious refusal to engage with her discovery obligations.[2] Secondly, I found that some of Dr Green's electronic searches and those done by staff of Power Ledger on her behalf failed to reveal some documents because they used the webmail search facility and were unaware of relevant functionality features of the system which caused documents not to be revealed. Thirdly, the selection by Dr Green and Power Ledger staff assisting her of keywords for searches failed to reveal some discoverable documents that would have been revealed by the selection or more or different keywords. Fourthly, in some instances Dr Green or Power Ledger staff assisting her failed to bring up or record documents they should have brought up or recorded in the course of their searches, in circumstances where they were making searches on laptops at home and had failed to be as thorough or careful as they should have been. Fifthly, some electronic information was historical information which had changed by the time Dr Green conducted her searches and she did not know that the historical information existed or could be retrieved by the use of the Wayback Machine website, the existence of which she subsequently learned and used to retrieve historical information.
[2] Green v Fairfax Media Publications Pty Ltd [No 3] [2021] WASC 7 [115].
I concluded that I was not satisfied that Dr Green deliberately failed to give proper discovery or consciously refused to engage with her discovery obligations. That finding is crucial. Whilst Dr Green failed to give proper discovery, in view of my findings of the reasons for that failure, that failure is not a reason for making an adverse finding in relation to Dr Green's credibility.
Dr Green's failure at the time of giving discovery to recollect matters to which the documents subsequently discovered relate is a matter which I take into account in assessing the reliability of Dr Green's evidence, and in particular the reliability of her recollection of events. That is a matter that I take into account in assessing the challenges to Dr Green's evidence.
The defendants' counsel submitted that Dr Green did not recall various documents that were subsequently discovered. Counsel submitted that in some instances this evidence is improbable and should be rejected. I find that Dr Green did not feign not being able to recall documents.
I find that Dr Green was an honest witness. She was careful and cautious. At times, this caused her not to volunteer answers to questions as completely or comprehensively as a less cautious witness would have and as counsel may have expected. That too is a matter I take into account in assessing the overall effect and weight of her evidence.
Dr Green's involvement in Power Ledger's business
The defendants submit that Dr Green's evidence in respect of her involvement in Power Ledger's business was unsatisfactory.
The question of Dr Green's involvement in Power Ledger's business is relevant to the truth of the unethical market manipulation imputation which Dr Green says arises from the spruikers article and second website article, as well as the misleads imputation which Dr Green pleads, in the alternative, arises from the $2 billion article and the first website article. In respect of each of the various limbs or elements of the defendants' truth defences, the defendants allege involvement by Dr Green in the relevant conduct, whether on the basis that she engaged in the conduct herself or on the basis that she caused Power Ledger to engage in that conduct.
When Dr Green was first cross‑examined she gave evidence about the extent of her involvement in the Power Ledger business. She said that in 2016 she was more actively involved in the business, but in 2017 and 2018 she was working very little. From October 2017 until around September 2018 she was barely involved in the day‑to‑day activities of Power Ledger. Dr Green was on maternity leave. She was just doing her chair duties. From October 2017 until March 2018 Dr Green said she was pretty much entirely working on matters at the City of Perth and was barely involved in the activities of Power Ledger. Dr Green gave birth to her son in July 2018. From September 2018 until July 2019 she was somewhat involved in the day‑to‑day activities. Her role was as chairman but she also took care of external relations. In July 2019 Dr Green returned from maternity leave properly. She took full responsibility of the day‑to‑day activities of the business when Dave Martin stepped down as the managing director.
Senior counsel for the defendants cross‑examined Dr Green about her responsibility for formulating the strategic direction of Power Ledger. Dr Green said that as a director she was responsible for endorsing the strategy that the managing director, Dave Martin, had developed. She said a lot of responsibility was delegated to the managing director to run the business.
When Dr Green was recalled for further cross‑examination, she was cross‑examined about the documents she had discovered since her first cross‑examination. Dr Green maintained her earlier evidence. The defendants submit that Dr Green's 'refusal to make appropriate concessions' reflects adversely on her credit. The premise of that submission is that the documents subsequently discovered by Dr Green reveal that her involvement in the running of the business was much more extensive than her initial oral evidence indicated. In their written closing submissions, the defendants support that premise by referring to the cross‑examination of Dr Green in relation to the number of emails she received in 2017 and 2018.[3]
[3] The defendants refer to T1552 ‑ 1553.
Junior counsel, Dr Roche, put to Dr Green that during 2017 and 2018 she received a large number of emails to her Power Ledger email address. Dr Green agreed. Dr Roche put to Dr Green that she would have needed to view those emails to discharge her obligations. Dr Green said that she did not read all of the emails, that very often she would be chased to bring to her attention certain things that were important.
Dr Roche put to Dr Green that when Mr Dawson SC had asked her about her involvement in the affairs of Power Ledger she had not referred to any of this evidence about the quantity of emails she was receiving during 2017 and 2018. Dr Green agreed.
The defendants submission is not persuasive. That Dr Green did not refer to the quantity of emails she received in the course of cross‑examination can only go to her veracity if she was asked a question which a truthful person would have answered by referring to the quantity of emails she received. The defendants have not identified such a question or questions. Furthermore, the level of Dr Green's involvement in the affairs of Power Ledger is a vague and subjective notion. Descriptions of Dr Green's involvement in the business such as 'working very little', 'barely involved in the day‑to‑day activities' and 'somewhat involved in the day‑to‑day activities' are not contradicted merely by a large number of emails being received in her inbox. An unknown quantity of the emails may have been unsolicited or group emails or sent to Dr Green as a matter of course or courtesy without any obligation or expectation that she would do anything in response to them. It is consistent with Dr Green's evidence that she did not take any action in relation to, or even read, many of the emails. In the absence of evidence that Dr Green took significant action in response to a significant number of emails sent to her, the fact that she received a large number of emails says little if anything about her involvement in the business and does not sustain the charge that her high level generalisations about the level of her involvement in the business were false.
The defendants also submit that Dr Green refused to make concessions about the contents of documents she discovered. The defendants submit that Dr Green sought to avoid making any concession concerning the contents of the 2018 one page Strategic Plan.[4] Board minutes in an email forwarding the document to Dr Green indicate that the board had considered and agreed with the content of the document while noting the need for the incorporation of further material. The defendants submit that when she was pressed to make this concession, Dr Green instead prevaricated and suggested the approval may have related to the process rather than the content of the document. Then, the defendants submit, when asked about the contents of the document, Dr Green refused to concede matters that are reported in the document such as the need for regulatory reform. Instead, the defendants submit, Dr Green sought to draw distinctions such as between Australia and the rest of the world and between threats and material threats. The defendants submit that Dr Green adopted this approach because she recognised the documents she had failed to discover earlier were damaging to her case. The defendants submit Dr Green's refusal to make appropriate concessions reflect adversely on her credit.
[4] Exhibit 953.
I do not find that matter adversely affects Dr Green's credibility. It reflects an aspect of the cross‑examination of Dr Green where she was asked to agree to descriptions or interpretations of documents or events, as distinct from objectively verifiable facts. Dr Green declined to accept the cross‑examiner's description or interpretation of documents or events in favour of her own description or interpretation.
The defendants submit that another unsatisfactory aspect of Dr Green's evidence was her professed inability to recall matters when recalled for further examination. The defendants submit that when first cross‑examined Dr Green was reasonably emphatic in her answers – she did not say, for example, that she could not recall her level of involvement in Power Ledger; on the contrary she gave evidence that she was 'barely involved'. However, the defendants submit that when she was confronted with objective evidence that made that original evidence incredible, Dr Green appeared unable to recall key matters and went so far as to concede in the face of objective evidence that her memory was 'somewhat imperfect' and that 'aspects of it were unreliable'.
Dr Green's memory was somewhat imperfect and aspects of it were unreliable. That is not surprising when asked to recall details of documents and events occurring four or more years ago. That was perhaps more apparent in her second cross‑examination than her first. Many of the documents Dr Green was referred to in her second cross‑examination were documents that she had not discovered earlier because, in part, she had not recalled the documents or their context. In that context, her lack of recall in her second cross‑examination in relation to some documents is not surprising.
I find Dr Green to be a careful and wary but not dishonest witness. In general she sought to tell the truth. Dr Green declined to accept the cross‑examiner's description of documents and events in favour of her own description. I do not find her to have been dishonest or obstructive in doing so.
In general Dr Green was an honest witness. Nevertheless, I give careful consideration to contemporaneous documents and events in assessing the reliability of her evidence.
John Bulich
Mr Bulich was the head of Power Ledger's technical team and a co‑founder and director. Dr Green's counsel submitted that there is no reason for the court not to accept Mr Bulich as a witness of truth. The defendants made no submissions about Mr Bulich's credibility or reliability and relied upon his evidence in support of some of their submissions. In general, Mr Bulich was a credible and reliable witness.
Documentary evidence
Disputed documentary evidence
At the conclusion of the testamentary evidence counsel for the defendants, Dr Roche, closed his case subject to the tender of documents to be included in a list of documents that had not been put to witnesses. Dr Roche said that the list was likely to contain 'a few dozen documents rather than a few hundred'. Subsequently the defendants delivered a tender list. Counsel for Dr Green objected to the documents being received into evidence on a number of different grounds. There are 263 disputed documents. They are contained in a schedule to the plaintiff's admissions in respect of proposed tender of supplementary documents filed on 24 March 2021 and the schedule to the defendants' supplementary closing submissions filed 31 March 2021.
It would be oppressive for the Court to consider each document separately. I will consider one document separately and the others in groups.
The Williams email
The disputed document[5] is an email from P Williams to Mr Patrick sent on 6 December 2018 at 3.09 pm with the subject 'Re media inquiry' (the Williams email).
[5] Tender list of documents number 243.
The spruikers article (and the second website article) includes:
Peter Williams, a partner at Deloitte Consulting specialising in technology, said providing a financial incentive, or bounty, for individuals to promote initial coin offerings could lead to unethical behaviour. These are 'classic market manipulation techniques', he said.
In pleading the defence of honest opinion in relation to the spruikers article, the defendants plead that the opinion was the opinion of Peter Williams, who was not an employee or agent of the defendants.
Dr Green, by her reply, denies that the spruikers article (and second website article) contain expressions of opinion of Mr Williams relating to matters of public interest that were based upon proper material or which were all substantively true.
The defendants filed witness outlines of Mr Patrick and Mr Williams but did not call either to give evidence.
The defendants submit that the Williams email should be received in evidence on two bases. First, they submit that the trial was conducted on the basis that Mr Williams had emailed to Mr Patrick and the relevant dispute was whether the views he had expressed, as reported in the article, constituted an opinion and whether the requirements of Defamation Act s 31(2)(b) and (c) were also met. The defendants submit that it is apparent from both the reply and Dr Green's evidence that it was common ground that Mr Williams had emailed Mr Patrick. The defendants refer to [8.10] of the plaintiff's reply in which she pleads to the defence of qualified privilege pleaded by the defendants at [31] of their defence. In their opening written submissions filed 23 October 2020, the defendants did not press their defence of qualified privilege. The trial was not conducted on the basis of the plaintiff's plea in her reply in relation to the defendants' abandoned defence of qualified privilege.
The defendants refer to evidence given by Dr Green. On 28 October 2020 Dr Green said that, with one exception, she contacted all the people that were quoted in the article, including Mr Williams and asked them whether they were truly quoted in the article and with the exception of Mr Williams, all of them were uncomfortable with how the words were portrayed or mischaracterised or the fact that they were quoted at all in the article.[6] It is drawing a long bow to say on the basis of that evidence that the trial was conducted on the basis that Mr Williams had sent the Williams email, or the terms set out in the Williams email, to Mr Patrick.
[6] T519.
Secondly, the defendants submit that the Williams email is admissible as a business record of the first defendants under the Evidence Act 1906 (WA) s 79C(2a) which provides:
Notwithstanding subsections (1) and (2), in any proceedings where direct oral evidence of a fact or opinion would be admissible, any statement in a document and tending to establish the fact or opinion shall, on production of the document, be admissible as evidence of that fact or opinion if –
(a)the statement is, or directly or indirectly reproduces, or is derived from, a business record; and
(b)the court is satisfied that the business record is a genuine business record.
Section 79B defines business to mean, amongst other things, any business, occupation, trade or calling. The media business carried on by the first defendant is relevantly a business.
In support of the contention that the email is a business record, the defendants refer to Australian Competition and Consumer Commission v Air New Zealand Ltd[7] and in particular [60] where Perram J held that emails received by a firm including attachments that are stored even for a brief period by the firm are business records and inferred that the attachments were so stored because of the fact of their retrieval.
[7] Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) [2012] FCA 1355; (2012) 207 FCR 448.
I accept that where a document has been retrieved and produced by a party, it has been sufficiently stored or retained that it may be considered a record. Furthermore, the nature of the material stored may mean that it is a business record.
The question is whether the document is a business record of Fairfax Media. The presence of the alternatives 'prepared' or 'used' in the definition of business record means that the court must answer two questions when considering whether a document is a business record. First, was the document 'prepared' in the ordinary course of a business for the purpose of recording any matter relating to the business? Secondly, was the document 'used' in the ordinary course of a business for the purpose of recording any matter relating to the business?
The Williams email was not prepared in the ordinary course of Fairfax Media's business. It was prepared by Mr Williams who was not an employee or agent of, or otherwise acting in the course of, Fairfax Media's business.
In McKay v Commissioner of Main Roads (No 2)[8] Beech J held that responses to a survey conducted by the State Planning and Infrastructure Department which had been completed by developers had not been 'prepared' by that department because the representatives of the developers who completed each survey were not acting in the ordinary course of the State's business. In this case the email was prepared by Mr Williams who was not an employee or agent of, or otherwise acting in the course of, Fairfax Media's business.
[8] McKay v Commissioner of Main Roads [No 2] [2010] WASC 153.
The Williams email was not 'used' in the ordinary course of Fairfax Media's business for the purpose of recording any matter relating to its business. In McKay v Commissioner of Main Roads Beech J held that the survey was not being used as record of matters relating to the state's business. His Honour said:
I would infer that, once received, the state (through the Department of Planning) used the Survey Responses as information or as a record of information, relating to the State's business. However, in my opinion, if a business uses an externally generated document as a record of information relating to its business, it does not thereby use the document 'for the purpose of recording any matter relating to the business' within the meaning of the definition of business record. To my mind, a document is used for the purpose of recording matters relating to the business only if there is or it is contemplated that there will be some further or ongoing recording of information by or on behalf of the business [32].
For those reasons I find that the Williams email is not admissible pursuant to s 79C(2a) because it is not a business record.
Documents already tendered or in tender bundle
The plaintiff objects to a number of documents on the ground that they are already in the tender bundle but not promoted, that is not received in evidence as an exhibit. That creates some duplication in the record, but it is not a reason for rejecting the tender. The documents will be received in evidence and promoted as exhibits.[9]
Documents post‑dating publication
[9] The documents are exhibits 666, 667, 673, 766, 850, 851, 854, 929, 950, 952, 988, 1020, 1038, 1039, 1046, 987, 1019, 668, 925, 826, 892, 926.
Dr Green objects to the tender of a number of documents on the basis that the document post‑dates the publication of the matters complained of. The general rule is that an imputation must be justified by reference to facts in existence at the time of publication. However, evidence of matters after the date of publication may be received in evidence where, as in this case, an imputation amounts to a charge of a general nature. The documents will be received in evidence.[10]
Documents that are not the plaintiff's documents
[10] The relevant documents are exhibits 1040, 835, 939, 1131, 1133, 1137, 1140, 1148, 1149.
The plaintiff objects to the tender of a number of documents on the basis that the document is not the plaintiff's document. That is not a basis for objection. The documents are admissible as business records pursuant to Evidence Act s 79C.[11]
Documents that should have been tendered
[11] The documents are exhibits 937, 886, 112, 113, 114, 146.
Dr Green objects to the tender of a number of documents on the basis that they should have been tendered earlier. That is not a ground for rejecting the tender.[12]
Documents that do not support the defendants' case
[12] The documents are exhibits 281, 40, 57, 197, 373, 387, 434, 478, 480, 481, 860, 874, 1121.
Dr Green objects to a number of documents on the ground of relevance. I am not satisfied that the documents are irrelevant. They will be received in evidence and given such weight as they warrant.[13]
Expert evidence
Prof Wills and Mr Price
[13] The documents are exhibits 834, 947, 785.
Dr Green adduced expert evidence from Prof Raymond Wills who is an adjunct Prof at the University of Western Australia . His expertise is in sustainability and technology across all sectors including the built environment, cleantech, energy, infrastructure, industrials, manufacturing, resources, transport and water.
The defendants adduced expert evidence from Prof Ross Buckley and Mr Danny Price. Mr Price is an expert in energy economics with experience advising governments, regulators, utility companies and investment firms.
Prof Wills and Mr Price conferred by video call and produced a joint conferral note which addresses the following issues:
1.extent of P2P trading across the grid and off the grid;
2.reasons why retailer participation is required for P2P trading across the grid;
3.options for obtaining retailer participation;
4.process and requirements to become a retailer;
5.legislative/rule changes needed to facilitate P2P electricity trading across the grid;
6.process for, and market consequences of, changing electricity legislation/rules;
7.consumer attitudes and behaviours towards innovation and electricity products;
8.the role of blockchain, blockchain tokens and cryptocurrencies in P2P trading (and whether they address the need for retailer participation and legislation/rule changes);
9. the role of batteries in P2P trading and Power Ledger's products; and
10. products with which P2P electricity trading across the grid would compete.
Prof Wills expert report and the joint conferral note of Prof Wills and Mr Price were admitted in evidence. The defendants did not cross‑examine Prof Wills.
Prof Buckley
The defendants adduced evidence from Prof Ross Buckley. Prof Buckley is a professor in the faculty of Law at the University of New South Wales. He is an expert in matters of fintech, blockchain, cryptocurrencies, initial coin offerings and digital financial services. His evidence was directed to the question whether Power Ledger had a plan for how the Token Model would function in practice. He gave evidence explaining the concept of blockchain, the application of blockchain to distributed ledger systems, the linkage between blockchains and distributed ledger systems on the one hand and cryptocurrencies on the other hand, the concepts of 'utility token', 'currency token' and 'security token', the appropriate characterisation of Power Ledger's POWR and Sparkz tokens, how Sparkz tokens are generated or relate with POWR tokens and the concept of an initial coin offering.
The expert reports of Mr Price and Prof Buckley were received in evidence. They were each cross‑examined by counsel for Dr Green.
The defendants' honest opinion defence
Section 31(3) of the Defamation Act provides that it is a defence to the publication of a defamatory matter if the defendant proves that the matter was an expression of opinion of a person (the commentator) other than the defendant or employee or agent of the defendant rather than a statement of fact, the opinion related to a matter of public interest and the opinion is based on proper material.
The defendants plead that the spruikers article and the second website article contain expressions of opinion which relate to matters of public interest and are based on proper material. The defendants plead that the commentator, that is the person who held the relevant opinion, was Peter Williams, who was referred to in the articles as a partner at Deloitte Consulting specialising in technology.
The spruikers article and the second website article are substantially the same. I will consider the defendants' defences of honest opinion and justification to the two articles by reference to the spruikers article. I will only refer to the second website article if there are any differences between the two articles relevant to the matter being considered.
Defence of honest opinion – legal principles
The authors of Australian Defamation Law and Practice[14] note that honest opinion is a defence to the publication of 'defamatory matter' in Defamation Act s 31 and that 'matter' is earlier defined by reference to various forms of publication, such as newspaper articles.[15] The authors write that this suggests that the defence is essentially directed to the words used by the defendant rather than the meanings pleaded by the plaintiff, although it is doubtful whether this distinction would normally have any practical effect because the plaintiff's meanings are ultimately required to arise from the words used by the defendant.[16]
[14] Tobin TK, Sexton MG 'Australian Defamation Law and Practice', Lexis Nexis, online version accessed 5 October 2021.
[15] See Defamation Act 2005 (WA), s 4.
[16] Australian Defamation Law and Practice [13,001].
In Harbour Radio Pty Ltd v Ahmed,[17] the New South Wales Court of Appeal considered that the question of what were expressions of opinion and what were expressions of fact should be approached on the basis of the published matter complained of rather than the plaintiff's meaning as the subject of that enquiry.
[17] Harbour Radio Pty Ltd v Ahmed [2015] NSWCA 290; (2015) 90 NSWLR 695 [43] ‑ [44].
The defence of honest opinion was recently considered by the New South Wales Court of Appeal in Feldman v Polaris Media Pty Ltd as trustee of the Polaris Media Trust t/as The Australian Jewish News.[18] White JA, after referring to Harbour Radio Pty Ltd v Ahmed and the judgment of Gummow, Hayne and Heydon JJ in Channel Seven Adelaide v Manock,[19] said:
Accordingly, the first question is not whether the defamatory meaning (that is, the imputation) from the matter published in the first article was opinion rather than a statement of fact, but whether the defamation matter was a statement of opinion rather than fact [66].
[18] Feldman v Polaris Media Pty Ltd as trustee of the Polaris Media Trust t/as The Australian Jewish News [2020] NSWCA 56; (2020) 102 NSWLR 733. In his application for special leave to appeal to the High Court the applicant's submitted that 'a significant question as to whether the defence found in s 31 is to be focused on the matter complained of or whether there is performed, as there might be in other areas of law, a substitution of the imputation, that is, the found defamatory meaning, for the matter complained of itself'. The application was dismissed on the ground that an appeal would endure no prospect of success: Feldman v Polaris Media Pty Ltd as trustee of the Polaris Media Trust t/as The Australian Jewish News [2020] HCATrans 162.
[19] Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245 [36].
Whether a defamatory statement is a statement of fact or an expression of opinion is determined by reference to the understanding of a hypothetical ordinary, reasonable reader. That is an objective question whose resolution depends on the related question of what defamatory meaning is to be attributed to the statement complained of.
The statutory defence of honest opinion largely reflects the defence of fair comment at general law whilst clarifying the position at general law in relation to the publication of the opinions of employees, agents and third parties.[20] The distinction between statements of fact and statements of opinion for the purpose of the statutory honest opinion defence reflects the distinction between statements of fact and comment at general law.
[20] Explanatory Memorandum, Defamation Bill 2005 (WA).
The rationale for the requirement that statements must be expressions of opinion to be protected by the defence of honest opinion was set out by Jordan CJ in Goldsborough v John Fairfax & Sons Ltd,[21] where, in relation to the defence of fair comment at general law, Jordan CJ said:
For the defence to succeed, it is essential that the whole of the words in respect of which it is relied on should be comment, that they should be fair, and that they should be on a matter of public interest. It must be indicated with reasonable clearness by the words themselves, taking them in the context and the circumstances in which they were published, that they purport to be comment and not statements of fact; because statements of fact, however fair, are not protected by this defence. In other words, it must appear that they are opinions stated by the writer or speaker about facts, which are at the same time presented to, or are in fact present to, the minds of the readers or listeners, as things distinct from the opinions, so that it can be seen whether the opinions are such that they can fairly be formed upon the facts (531 ‑ 532). (emphasis added)
[21] Goldsborough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 525.
Where honest opinion and statements of fact are so intertwined as to be indistinguishable, the defence will fail as the recipient of the publication must be able to distinguish the facts from the opinion.[22]
[22] Hunt v Star Newspaper Co Ltd [1908] 2 KB 309, 320 (Fletcher Moulton LJ); Smith's Newspapers Ltd v Becker [1932] HCA 39; (1932) 47 CLR 279, 303 ‑ 304; Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245 [41]; O'Brien v Australian Broadcasting Corporation [2016] NSWSC 1289 [52].
In Channel Seven Adelaide v Manock,[23] Gummow, Hayne and Heydon JJ approved the statement of Fletcher Moulton LI in Hunt v Star Newspaper Co Ltd that:
[C]omment in order to be justifiable as fair comment must appear as comment and must not be so mixed up with the facts that the reader cannot distinguish between what is report and what is comment ... The justice of this rule is obvious. If the facts are stated separately and the comment appears as an inference drawn from those facts, any injustice that it might do will be to some extent negatived by the reader seeing the grounds upon which the unfavourable inference is based. But if fact and comment be intermingled so that it is not reasonably clear what portion purports to be inference, he will naturally suppose that the injurious statements are based on adequate grounds known to the writer though not necessarily set out by him. In the one case the insufficiency of the facts to support the inference will lead fair‑minded men to reject the inference. In the other case it merely points to the existence of extrinsic facts which the writer considers to warrant the language he uses ... Any matter, therefore, which does not indicate with a reasonable clearness that it purports to be comment, and not statement of fact, cannot be protected by the plea of fair comment (319 ‑ 320).
[23] Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245 [41].
The critical question is whether there is a clear separation of the facts from the defamatory expressions of opinion.[24]
The defendants' pleaded defence of honest opinion
[24] O'Brien v Australian Broadcasting Corporation [2016] NSWSC 1289 [52] McCallum J.
It is possible to deny that words conveyed an alleged meaning, and, at the same time, clarify that, if they did, the publisher retracts any such suggestion or imputation. It is also possible to couple such a retraction with an expression of regret if any such meaning was in fact conveyed, and also a statement (if it be the case) that no such meaning was intended. However, the defendants' failure to make such a retraction and apology was not unreasonable in the circumstances. There is a significant overlap between the defrauds meaning and the misleads meaning. The defendants maintained the misleads meaning is substantially true. It is theoretically at least possible to retract the defrauds meaning whilst maintaining the misleads meaning but it is not improper, unjustifiable or lacking in bona fides to do so because of the overlap in the meanings.
The concerns notice asserted that the statement in the spruikers article that 'the company continues to pay spruikers, which it calls community advocates, which promote its currency, which was worth $2.4 billion at the peak of the Bitcoin Boom' was false in that the bounty program concluded over a year ago and the community advocates program is completely different. The defendants' solicitors replied that the article correctly records that community advocates who promote Power Ledger's currency are rewarded for doing so, that the article does not suggest that the rewarding of community advocates is identical to the bounty program and Dr Green's explanation of the companies rewards philosophy was included prominently in the article.
The statement in the article that 'the company continues to pay spruikers, which it calls community advocates, which promote its currency' was false. I have found that the defendants had no proper basis for making the allegation. The defendants' solicitors' response does not indicate any proper basis for the allegation in the article or for maintaining it. The defendants should have retracted that statement. Their failure to do so was improper and unjustified.
The concerns notice asserted that Dr Green was inaccurately and misleadingly quoted in the $2 billion article by stating that when Mr Patrick asked Dr Green 'how many buildings around the world use Power Ledger's system?', Dr Green replied 'I don't know exactly off the top of my head' but omitted to give the rest of her answer, 'but something a bit less than 100'. In their response the defendants' solicitors said that the recording in the article of Dr Green's response to Mr Patrick's question accurately portrays the uncertainty she projected about this issue at the time, that she may have then proffered an estimate of how many buildings, but that this was omitted is of no consequence. The defendants' solicitors said that Mr Patrick chose instead to quote the CEO, Mr Martin, on this issue, that Mr Martin was a participant in the same interview, and that he appeared to Mr Patrick to be more certain about the answer to the question. The defendants' solicitors said there is nothing misleading or inaccurate about the paragraph.
The quote attributed to Dr Green was misleading. It portrayed that she had no idea how many buildings use Power Ledger's system or was not willing to disclose the information whereas in fact she went on to give an estimate with some detail. The explanation that Mr Patrick chose to quote Mr Martin because he appeared to be more certain about the answer to the question is no answer. First, Dr Green's uncontradicted evidence of the interview shows that she gave more information on the matter than Mr Martin. Secondly, and more importantly, it is disingenuous to say that Mr Patrick chose to report Mr Martin's answer because he appeared to be more certain about the answer to the question. That does not explain why he chose to report part of Dr Green's answer and in a way which conveyed that she either did not know or was not willing to give an answer. The defendants' failure to correct the misleading statement in the article was improper and unjustified.
The matters described in [520] ‑ [552] above were matters in respect to the circumstances of publication of the defamatory matter and as such, warrant an award of aggravated damages so that pursuant to Defamation Act s 35(2), the maximum amount of damages for non‑economic loss pursuant to s 35(1) of the Act does not apply.
Further alleged aggravating conduct
Mr Patrick nominated himself for Westpac journalism award
Mr Patrick nominated himself for the digital disruption technology category of the Westpac Excellence in Financial Journalism Awards 2018 conducted by the National Press Club of Australia for the $2 billion article. Mr Patrick's nomination stated, amongst other things:
I would argue my article took a sober objective look at an important example of blockchain technology. In doing so, I made a significant contribution to IT journalism.
The nomination went on to refer to Power Ledger's ICO, questioning the company's strategy, using on the record quotes and independent reporting and raising questions about the way in which Power Ledger raised money and whether its impressive sounding electricity trading system is needed. The nomination makes no mention of Dr Green.
Dr Green gave evidence that when Mr Patrick's entry submission came to her attention:
I was so upset and angry that he would write the word 'objective' in that to suggest that what he wrote was objective because it was clear it was deliberate. He had deliberately done the opposite of objective and that he would portray this to try and win himself an award – I just thought it was disgusting and I – and at the expense of me and my company … I only saw this for the first time this week and I felt sick reading this.
Upon learning that Mr Patrick won the award, Dr Green contacted Westpac to advise them, amongst other things, of the falsities in the article. Nothing came of her intervention.
Mr Patrick's description of his article as 'a sober, objective look at an important example of blockchain technology' may be contested. I have noted earlier in these reasons that the subject of the article is Dr Green, and the tone is critical and colourful and dramatic. Nevertheless, the judges considered that the article merited the award. I do not consider it is open to find that the tone and tenor of the article went beyond the practice of contemporary journalism.
However, I have found that the article contained incorrect statements of fact. The award judges would not have known that, but Mr Patrick and the AFR had been informed of the incorrect statements of fact by Dr Green's solicitors and knew that there was no proper basis for the incorrect facts in the article. In those circumstances it was improper for Mr Patrick to nominate himself for the award and state that the article was an objective look at blockchain technology. I infer that Fairfax Media knew that Mr Patrick had nominated himself for the award or received the award. In any event, whilst I find that Mr Patrick nominating himself for the ward is aggravating conduct, it does not add to the damages I would award in the absence of that aggravating factor.
Mr Patrick contacted former Power Ledger employees
Mr Patrick contacted a former employee of Power Ledger for information for another article about Power Ledger. I do not consider that the approach went beyond the practice of contemporary journalism. I am not satisfied that Mr Patrick's conduct was improper, unjustified or lacking in bona fides.
Mr Patrick contacted a Power Ledger Community Advocate, and two former employees of Power Ledger enquiring about the suicide of a former employee of Power Ledger. Such approaches are invasive and unpleasant. However, there is no evidence about these matters beyond the communications seeking information and that they came to the attention of Dr Green. In the absence of any further evidence about this matter I do not infer that these approaches went beyond the practice of contemporary journalism. I am not satisfied that Mr Patrick's conduct was improper, unjustified or lacking in bona fides.
Maintaining plea of justification
Dr Green alleges that an aggravating factor is that the defendants pleaded and maintained up to and including the trial defences of justification in respect of the articles complained of and cross‑examined Dr Green in respect of those defences for in excess of three days.
The cross‑examination of Dr Green was thorough and challenging. However, the cross‑examination was respectful, not offensive or insulting. A cross‑examination which challenges the plaintiff is an ordinary incident of contested litigation, particularly a defamation action in which the defendants advance a defence of justification. The cross‑examination did not amount to conduct by the defendants that was improper, unjustified or lacking in bona fides.
The defendants adduced substantial evidence which was relevant to the defence of justification of the $2 billion article. The defence failed for the reasons I have explained. However, I am not satisfied that in advancing and maintaining the defence the defendants conduct was improper, unjustified or lacking in bona fides.
I find that the maintenance of the defence of justification of the spruikers article was unjustifiable. Neither Dr Green nor Power Ledger denied that Power Ledger used undisclosed paid spruikers to promote Power Ledger and the POWR token. The contest was essentially twofold. First, did Power Ledger's conduct amount to unethical market manipulation? Secondly, did Dr Green cause Power Ledger to engage in that conduct?
The defendants adduced evidence from which they argued it could be inferred that Power Ledger engaged in unethical market manipulation. I have found that that inference should not be drawn. However, maintaining the argument based on the evidence adduced was not improper or unjustified.
However, the evidence adduced by the defendants from which they submitted it may be inferred that Dr Green caused the unethical market manipulation fell well short. It was not open, on the evidence adduced, to infer that Dr Green caused the alleged unethical market manipulation. The defendants adduced no evidence that Dr Green was directly involved in the bounty campaign. There was no proper basis for the justification defence. It was improper and unjustified to maintain the defence.
Mitigation
The court may consider evidence that is directly relevant to the particular sector of the claimant's life to which the defamatory statement relates. If such evidence goes towards justifying the defamatory statement, the amount of damages may be reduced. For instance, in Burstein v Times Newspapers Ltd[71], a newspaper published an article to the effect that the claimant used to organise groups of people to harass and disrupt modern atonal music performances. Evidence that showed that the claimant was a co-founder of a group of campaigners against atonal music, and that the group, including the claimant, had led the audience in booing at a particular performance, was considered by the court to be 'directly relevant' for the purposes of reducing damages.
[71]Burstein v Times Newspapers Ltd [2001] 1 WLR 579.
The damages should be reduced if the evidence establishes that the plaintiff has no reputation deserving of legal protection. For example, in Grobbelaar v News Group Newspapers Ltd[72] the House of Lords substituted £1 for the jury award of £85,000 because, although the claimant had not fixed matches (as alleged in the libel), he had entered corrupt agreements with a view to doing so. Lord Bingham explained:
The tort of defamation protects those whose reputations have been unlawfully injured. It affords little or no protection to those who have, or deserve to have, no reputation deserving of legal protection (3036).
[72] Grobbelaar v News Group Newspapers Ltd [2002] UKHL 40; 1 WLR 3024.
The defendants submit that to the extent the court finds any facts are proved in support of their justification or honest opinion defences, these are facts that are to be taken into account in mitigation of Dr Green's damages. What is not clear is how they are to be taken into account.
The evidence does not establish that Dr Green contributed to the publications or the damage to her reputation caused by the publications. There was no evidence, for example, that Dr Green provoked the publications or the defamatory statements in the publications. Dr Green's evidence shows that she offered to answer any questions which Mr Patrick wished to put to her but Mr Patrick declined to take that course.
The evidence adduced does not go to Dr Green's actual reputation, that is, they do not establish any bad reputation. The evidence goes to conduct of Power Ledger in failing to disclose the use of paid bounty participants or spruikers and challenges, weaknesses or vulnerabilities in Power Ledger's business model. The evidence is that Dr Green was chairman of Power Ledger and at material times a part‑time employee of Power Ledger. I take into account the matters established by the evidence. However, I do not consider that they call for any reduction in the damages that should be awarded to Dr Green. Matters established by the evidence in support of the honest opinion and justification defences advanced by the defendants do not establish that Dr Green has no reputation deserving of protection or that the damages awarded should be reduced because of any matters proved by that evidence.
Damages should be assessed as single sum
It is appropriate to assess Dr Green's damages for her causes of action in relation to the publications sued on in a single sum for the following reasons.
First, the spruikers article and the second website article are substantially the same, and the $2 billion article and the first website article are substantially the same.
Secondly, the two print articles appeared in the same edition of the AFR Weekend newspaper and the second website article was posted to the AFR website soon after the first website article. The reader of the AFR Weekend is pointed to the two print articles by the picture of Dr Green and block caption on the front cover.
Thirdly, all of the articles are about Dr Green and her role in Power Ledger's allegedly flawed business model and unethical or deceitful business practices.
Fourthly, all of the articles defame Dr Green in her professional and business character and reputation.
Extent of publication
Copies of the 28 December 2018 edition of the AFR Weekend Newspaper were sold in every state and territory of Australia. A total of 66,563 copies were sold. The first website article was accessed or 'clicked' on (including by subscribers to the AFR website) 20,098 times. The second website article was accessed or 'clicked' on (including by subscribers to the AFR website) 7,368 times.
I note that the number of copies of the AFR Weekend newspaper sold is more than double the number of copies sold of the edition of the AFR newspaper which gave rise to the judgement in Stead v Fairfax Media Publications Pty Ltd where Lee J observed:[73]
Publication was very extensive. There were 32,418 copies sold of the edition of the AFR newspaper which contained the First Article, the estimated number of readers of which was 283,000. As at 10 February 2020 there were 8,591 page views of the webpage on which the First Internet Matter appeared. The figures for the Second Matter were similar: 32,919 copies were sold of the addition containing the Second Article (with an estimated readership of 300,000). As at 10 February 2020, there were 6,244 page views of the Second Internet Matter.
[73] Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15; (2021) 387 ALR 123.
I do not know from what evidence Lee J estimated readership of the articles. There is no evidence which allows such an estimate to be made in this case. However, the AFR describes itself as the authority on business, finance and investment news in Australia and as having a reputation for independent, award-winning journalism and being essential reading for Australia's business and investor community. That is consistent with the facts of which I take judicial notice.
Mr Patrick admits that he continues to maintain a publication of the second website article via his publicly accessible Twitter account, having retweeted a post on 27 December 2018 uploaded by another user which contained a link to the second website article.
I infer that the matters conveyed by the articles complained of would have spread beyond those who read them. That is confirmed by the evidence of Dr Green. She said her staff were being asked about the articles. At the time of the publication Dr Green was a research fellow at Curtin University. She gave evidence that her director told her there was a big conversation going on in the university administration about her and that she was seen as tainted and the university wanted to disassociate itself from her. Dr Green gave evidence that Power Ledger was negotiating a contract with a US company listed on the NASDAQ and they raised concerns about the articles. Dr Green said she was queried by businesspeople she was negotiating with internationally, including in Malaysia, as to the truth of the articles. Dr Green gave evidence that the Lord Mayor of the City of London came to Perth as part of a trip around Australia and the UK Consular General's office reached out to her and asked her to meet with the Lord Mayor in her capacity as chairman of Power Ledger. After the meeting had been arranged the Consular General's representative contacted Dr Green and said she wanted to know what the AFR articles were about and was there any truth to them. Dr Green gave evidence:
I just thought that it doesn't matter where I go, this is following me around everywhere. It's like, I can't escape from it.… It's just every juncture there is something and I'm just waiting for it to happen. So I felt on tenterhooks all the time. Like somebody even like brought it up to me yesterday, not knowing about this trial, and I just felt like it's not going away…I can't escape. I feel trapped.
I accept Dr Green's evidence of these matters.
Dr Green's evidence of the reaction of others to her demonstrates the 'grapevine effect'. The extent of the damage to Dr Green's reputation calls for an award of damages of a significant magnitude so as not only to provide consolation to her for the harm done, but also to act as vindication of Dr Green 'for where the poison has reached and where it may yet be lurking.'[74]
[74] Cassell & Co Ltd v Broome [1972] AC 1027, 1071.
Injury to feelings
Dr Green's testimony as to her subjective hurt was compelling. On the evening the website article first appeared on the AFR website, Dr Green was with her husband and her two small children at Myalup in the south-west of Western Australia. Dr Green gave evidence:
Just after Christmas on 27 December, I was down south with my family for a Christmas and New Year break and I received an email from one of my staff members, Aimie Rigas, sharing news that the article from [Mr Patrick] had been published.… I was devastated.… I couldn't believe that he would publish something that was so manifestly wrong deliberately.… I was really concerned when I read it because it only covered a segment of our correspondence and… I felt like he was going to write more articles and they were going to be equally wrong and inaccurate.
The following day Dr Green learned of and read the second article. She gave evidence:
I was completely in shock … I couldn't function … I was with my kids and … I couldn't actually see properly because I was so distressed, and my husband had to take the kids and … I was just distraught … My father died when I was 14 and I was as upset … from when I learned of his dying as I was from reading the second article.
and
We were supposed to go down there for New Year's and just relax as a family, because … At that stage I was pregnant and I wasn't feeling that well anyway, and then I just couldn't cope. I couldn't take care of the kids, and so Andrew thought it would be better … if we came home to Perth so mum could help look after the kids and me.
The articles continued to severely impact Dr Green's life:
I just locked myself away to try and get this sorted. So I tried to keep track of all the places online where the article was being published. And if I didn't get lucky contacting somebody, I was trying to find other people and then I saw that the article was being re-shared on Facebook and Twitter and LinkedIn and I started to contact all the people that were sharing it and asked them to take it down. I just tried to do everything that I could to make it go away.
and:
I stopped doing everything in my life. I didn't want to go out anywhere anymore because I didn't want to see people in them asking me about the article and I didn't want to have to explain myself. So I just stop doing all the things that I normally would do and didn't want to go out at all anymore. My husband was getting really annoyed because he was having to take on more and more of the burden of looking after our children and I used to be interested in like going out and socialising with my friends, and I didn't want to do that anymore. I was just at home obsessing over what I could do to get the articles taken down.
Dr Green has received professional counselling from January or February 2019 and continues to receive counselling in relation to the impact of the articles on her.
The defendants submitted that Dr Green should not be compensated for the full effect of the defamations on her because she misinterpreted the articles and overreacted. The defendants submit that Dr Green thought that the articles meant she was a fraudster and charlatan, which they do not, and hence in effect the full effect of the injury to Dr Green's feelings was not caused by the articles but by her misinterpretation of them.
In some cases a claim for extreme injury to feelings will raise the question of whether the plaintiff is unduly sensitive in her reactions to the defamatory publication. It is true that as a general proposition, a defendant must take a plaintiff as it finds her but there must be some correlation between the gravity of the defamation and the reaction of the plaintiff.[75] As I have said, the defamations were very serious. I find that Dr Green's reaction to the defamations was not so disproportionate that the publications were not the cause of the full injury to her feelings. To the contrary, I find that the publications caused the full extent of the injury to Dr Green's feelings of which she gave evidence.
[75] Ali v Nationwide News Pty Ltd [2008] NSWCA 183 [77] ‑ [78]; Humphries v TWT Ltd (1993) 120 ALR 693.
Dr Green's evidence of the impact of the articles on her when she first learned of them was confirmed by her husband, Mr Andrew Morton:
The whole idea of us going away was to be down there as a family with the kids. We had both been working late hours throughout the year and we just wanted a celebration together as a family … She withdrew herself from myself and the children. She just seemed to disappear into another corner of the room as she read the article and became increasingly upset.
…
Over the course of the next couple of days she became more and more withdrawn. The way I would explain it would be she would be in the room with us but, you know, she would be preoccupied in her mind with the article and seeing how many times it may or may not have been republished. And she just lost all presence to us, so we decided I think within a day or 2 to pack out things up and leave and come back to Perth where she had more support around her.
Mr Morton said that before the publication of the articles Dr Green used to be the one who made the plans for the family but after the publication of the articles she didn't want to do anything:
She was upset. She was crying. And she would swing between kind of anger and emotional outbursts, crying, sobbing, things like that. There would be periods where she just over the next few days where she just wouldn't talk.
Mr Morton gave evidence of Dr Green's changed socialising:
My wife … comes from a large Italian family and they get together very regularly to do things like make pasta sauce and preserves of vegetables and they get together as a family. Also, she would socialise with a lot of her friends, her girlfriends from Uni days. That stopped. I discussed it with her for a little while as to why the family aspect had stopped and it was that she was concerned that people would bring it up and that it would trigger her to be upset … She just withdrew from most of those extracurricular social activities in her life.
Mr Morton explained the effect of the articles on their marriage and children:
I didn't quite know how to deal with her upset … And I realised … I couldn't be there for her in the way that she needed … It started to affect her interaction with our children. She would be quite short tempered at times, quite moody. The children would misbehave to get mum's attention and I found that she wasn't listening to me either. She just stopped acknowledging things that I would say to her just in general conversation. So over a period of time … And because she was up late at night sometimes, just checking to see how many times articles were republished on the Internet. I used to find it frustrating because the glow of her phone used to wake me up and I decided to start sleeping in a separate room.
Mr Morton also sought professional help.
Mr Bulich gave evidence that he observed that Dr Green was distraught and crying as a result of the articles and that it was all they talked about for the next few weeks. Mr Bulich gave evidence that the effect that he observed on Dr Green had not passed with the passage of time:
I don't think it has. It has sort of left a scar, I think.
Dr Green suffered a high degree of subjective hurt to her feelings aggravated by the conduct of the defendants towards her.
Gravity of allegations
In assessing damages for injury to reputation the gravity of the libel is an important factor. Indeed, in John v MGN Ltd[76] the Master of the Rolls, Sir Thomas Bingham, said that it is the most important factor. The defendants' defamations of Dr Green attack her personal integrity and professional reputation. Those are core attributes of her personality. The deformations are very serious.
[76] John v MGN Ltd [1997] QB 586; [1996] 3 WLR 593, 607.
The spruikers article imputes to Dr Green unethical market manipulation. That is a grave allegation to level at a businessperson and a person in public life – Deputy Lord Mayor of the City of Perth and a member of the board of the Water Corporation.
The $2 billion article imputes to Dr Green that she made substantial gains by deceiving people to buy tokens without disclosing to them the true nature and risk of the investment. Dishonesty in business is a very serious libel to level at a businessperson, particularly one who is involved in an innovative sector of social and economic activity, where standing and reputation are of particular importance.
Effect on reputation
The defendants correctly submitted that Dr Green adduced no evidence of her reputation prior to the publications complained of. It was not necessary for Dr Green to do so because her good reputation is assumed.
There is substantial evidence of the allied concept of Dr Green's standing in the community before the publications. Dr Green was elected as a councillor of the City of Perth and became Deputy Lord Mayor. She established The Green Enterprise, consulting on sustainability. She was appointed to the board of the Water Corporation. She was an advisory board member for Carbon Tracker. She was appointed founding chairman for Climate KIC, a knowledge innovation centre involving multisector disciplines to try and solve issues around climate change and commercialise climate change technologies. She was a founding member of the board for Australia's first fossil fuel free superannuation which she also help to establish. She was a founding member of the Global Blockchain Business Council and became a fellow of Blockchain Australia. She was a research fellow at Curtin University. She was awarded the EY National Fintech Entrepreneur of the Year and Sir Richard Branson Extreme Tech Challenge awards.
The evidence discloses that at the time of the publications Dr Green had a professional standing of a high order both in Australia and internationally.
As I have already referred to, the publication of the articles was very extensive and the publications were in Australia's foremost publisher of business news. Furthermore, Mr Patrick was awarded the digital disruption technology award at the Westpac Excellence in Financial Journalism Awards – which would have confirmed in the minds of those who knew of the award that the $2 billion article was a fair, objective and accurate report of the matters in it, including the matters conveyed about Dr Green.
The law places a high value upon reputation. One area in which the law places a high value upon reputation is where a person's professional standing is affected.
Damage to Dr Green's reputation has occurred in circumstances where her professional standing is affected. Her professional standing was an important part of her life.
I have referred to some of Dr Green's evidence in relation to people who contacted her or Power Ledger about the articles. Mr Bulich gave evidence that he, Dr Green and other Power Ledger employees frequently had to explain the articles to clients. He observed that Dr Green had to keep explaining and trying to make the staff understand what the article meant. Having regard to the extensive publication of the articles, the nature and standing of the AFR newspaper, Dr Green's business and public standing, the nature of the imputations conveyed by the articles and the sort of people who contacted Dr Green or Power Ledger in relation to the articles, it is open to infer and I do infer that the articles had a seriously adverse affect upon Dr Green's reputation, and in particular her reputation in the business community and persons involved in public administration. Dr Green has suffered real reputational damage in the business community in which she works.
Vindication
There is a need for the damages awarded to be such as to provide a proper vindication of Dr Green's reputation so as to convince some bystanders, at least in the business and cryptocurrency communities, of the baselessness of the allegations made. There may be cases where the reasons for judgment will provide a sufficient vindication but whether they do so is a fact specific question. In Cairns v Modi[77] Lord Judge CJ, Lord Neuberger and Eady J said:
It is more likely, as in so many cases, that the general public (or rather, interested 'bystanders' who need to be convinced) will be concerned to discover what might be called the 'headline' result. What most people want to know, and that includes those who read the judgement closely, as Mr Caldecott submitted, is simply 'how much did he get?'
[77] Cairns v Modi [2012] EWCA Civ 1382; [2013] 1 WLR 1015 [32].
I agree. To paraphrase Rares J in Chau v Australian Broadcasting Corporation (No 3),[78] the ordinary reasonable reader of the AFR newspaper and its website and those to whom its imputations about Dr Green were repeated are not likely to spend hours reading these reasons and nor is anyone else except the parties and their lawyers and any appellate court. The public are interested in what amount the Court awards, not the legal reasons.[79]
[78] Chau v Australian Broadcasting Corporation (No 3) [2021] FCA 44; (2021) 386 ALR 36 [133].
[79] Montgomery v Thompson [1891] AC 217, 225.
Comparable awards
There must be an appropriate and rational relationship between the harm sustained and the amount of damages awarded because the only measure or yardstick against which the required relationship may be measured are decisions placing a value by way of an award of damages to harm to reputation and feelings. There is a need to have some regard to 'comparable awards'. This not only allows the Court to fix upon a sum which reflects the necessary statutory relationship but serves the allied purpose of providing some consistency in damages between closely comparable cases.[80]
[80] Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15; (2021) 387 ALR 123 [230] (Lee J).
However, a sum which represents an appropriate and rational relationship between the harm sustained and the amount of damages awarded depends upon the circumstances of each case. 'Headline' comparisons between different awards cannot reflect the circumstances of each assessment.
Both parties referred to the decision in Stead v Fairfax Media Publications Pty Ltd. The defendants submitted that if the Court finds that the plaintiff's damages are aggravated, any award of aggravated damages should be fixed at the lowest end of the range, having regard to the decision in Steadwhere the circumstances of aggravation were far more serious than any circumstances that may be found in the present case. Counsel for Dr Green submitted that the damages awarded should be higher than in Stead, and further, that the damages awarded in Stead were on the low side. It is difficult to make direct comparisons between the injury to plaintiffs in these cases. In both cases the defamations concerned the plaintiff's professional or business reputation. The matters complained of in both cases were widely distributed, although more copies of the newspaper were distributed and there were more hits on the website in this case. I regard the defamations in this case to be more grave than in Stead.
In a recent case in this court, Jensen v Nationwide News Pty Ltd [No 13],[81] a jury found that matters published in the Australian newspaper, on its website and the subject of a Tweet conveyed of the plaintiff, a former member of Federal Parliament, the defamatory meanings that by leaving the family home to live with his new girlfriend, he is a person devoid of the family values and the high moral standard expected of a Member of Parliament, and that, by abandoning his electorate to live in Halls Head, he failed to act in the best interests of persons residing in the division of Tangney for whom he was elected to represent. Chief Justice Quinlan awarded the plaintiff noneconomic damages of $325,000, including aggravated damages.
[81] Jensen v Nationwide News Pty Ltd [No 13] [2019] WASC 451.
O'Neill v Fairfax Media Publications Pty Ltd[82] arose out of a boxing match between Danny Green and Anthony Mundine. The plaintiff, a doctor, sued the defendants for an article published in the Sydney Morning Herald and online. Justice McCallum found that whilst the articles did not identify Dr O'Neill by name, the articles were published to persons who identified Dr O'Neill as one of the ringside doctors referred to. Her Honour found that the articles conveyed defamatory imputations that Dr O'Neill incompetently allowed Danny Green to continue fighting after Mr Green suffered bleeding on the brain; negligently endangered Mr Green's life by allowing him to continue fighting when he obviously had brain damage; and was such a reckless ringside doctor that he failed to stop a fight despite the fact that one of the boxers obviously had concussion. Justice McCallum awarded damages of $385,000 made up of $350,000 in general damages with an addition of 10% for aggravated damages.
[82] O'Neill v Fairfax Media Publications Pty Ltd (No 2) [2019] NSWSC 655.
I have had regard to the awards in the cases to which I have referred and to a number of other cases.[83] However, the calculation of damages for the hurt, injury and harm caused to the feelings and personal, professional and business reputation of the plaintiff is not the product of a rigid and formulaic exercise. This case must be assessed on its own set of facts, matters and circumstances.
[83] see Wagner v Harbour Radio Pty Ltd[2018] QSC 201; Pahuja v TCN Channel Nine Pty Ltd (No 3)[2018] NSWSC 893; Chau v Fairfax Media Publications Pty Ltd [2019] FCA 185; Wagner v Nine Network Australia Pty Ltd[2019] QSC 284; Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496, Nationwide News Pty Ltd v Rush[2020] FCAFC 115; (2020) 380 ALR 432; Tavakoli v Imisides (No 4) [2019] NSWSC 717; Darwin v Norman [2020] NSWSC 357; Cheng v Lok[2020] SASC 14; Poniatowska v Channel Seven Sydney Pty Ltd (No 2) [2020] SASCFC 5; (2020) 136 SASR 455; Chau v Australian Broadcasting Corporation (No 3)(2021) 386 ALR 36; Murphy v Nationwide News Pty Ltd [2021] FCA 381.
Conclusion
The level of damages should reflect the high value the law places upon reputation and, in particular, upon the reputation of those like Dr Green whose work and life depend upon their honesty and integrity[84].
[84] See Cerutti v Crestside Pty Ltd [2014] QCA 33; [2016] 1 Qd R 89 [55] Applegarth J citing Ali v Nationwide News Pty Ltd[2008] NSWCA 183 [74].
Having regard to the gravity of the defamations, the extent of their publication, the injury to Dr Green's reputation and feelings, the need for vindication of her reputation and the aggravated injury caused to her by the conduct of the defendants, the award should be in the upper range of damages.
I will order that the defendants pay the plaintiff $400,000, inclusive of aggravated damages, in respect of the publications complained of.
Injunction
I will defer the question of whether an injunction should be granted restraining the defendants from repeating the statements complained of or statements to a similar effect until after I have delivered these reasons and the parties have had an opportunity to consider them. If Dr Green then presses for an injunction, I will consider whether it should be made in light of the evidence then before the court.
I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
CR
Associate to the Honourable Justice Le Miere
23 DECEMBER 2021
2
28
0