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Harmonious Blend Building Corporation Pty Ltd v Keene

Harmonious Blend Building Corporation Pty Ltd v Keene

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Case Copied 18 December 2014 36 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST

S CI 2014 04511

HARMONIOUS BLEND BUILDING CORPORATION PTY LTD	Plaintiff
v
PATINA KEENE & ANOR	Defendants

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JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24 OCTOBER 2014
DATE OF RULING:	18 DECEMBER 2014
CASE MAY BE CITED AS:	HARMONIOUS BLEND BUILDING CORPORATION v KEENE & ANOR
MEDIUM NEUTRAL CITATION:	[2014] VSC 649

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Practice and Procedure – Amendment of pleading - Leave sought to amend statement of claim – Plaintiff claims reputational damage from conduct of defendants that was misleading or deceptive – Statements posted on product review website by defendants - Whether conduct in trade or commerce – Whether adequate cause of loss and damage from conduct pleaded.

Practice and Procedure – Security for costs – Plaintiff a corporate trustee of a unit trust – Enforcement of any right of indemnity against trust assets uncertain – Risk that plaintiff unable to pay costs on demand - Whether persons standing behind plaintiff taking benefit of proceeding should put up security – No risk of stultification – Merits of claim – Delay – Security ordered for future costs only – s 1335(1) Corporations Act 2001 (Cth), R 62.02 Supreme Court (General Civil Procedure) Rules 2005.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Castelan	Bruce Caldwell & Associates
For the Defendants	Mr S K Wilson QC	Robert Wood & Associates

HIS HONOUR:

Leave to further amend the statement of claim

The plaintiff sought leave to amend its statement of claim. It sought to plead two new causes of action against the first defendant arising from two publications by the first defendant on the website that occurred on 2 June 2011 and 11 December 2011. The plaintiff alleged that the first defendant contravened s 18 of the Australian Consumer Law by engaging in misleading or deceptive conduct in trade or commerce by those publications. The first defendant contended that the allegation that the publication was in trade or commerce was untenable and no arguable cause of action was disclosed.

The publications were in the nature of a critical review of the services provided by the plaintiff. The publication of 2 June 2011 read:

We have had to deal with these builders for two years to get our house built to lock up. We are still waiting for works to be completed so the house is totally sealed up. They have had so many staff resign and we are on the 4^th supervisor, we don’t even know who to communicate with anymore. The sales person sells the dream and the office administrators kill it. Responses are always in their favour and their office staff are rude and abrupt. We tried to cancel our contract prior to works beginning and was flatly refused. We have spent thousands of dollars outside of the money we have paid Clarks to fix problems they have left behind and now we need to spend thousands more because…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] VSC 649
Decision Date: 18 DECEMBER 2014

CaseChat Overview and Summary

Harmonious Blend Building Corporation Pty Ltd, a corporate trustee of a unit trust, brought an action against the defendants for misleading and deceptive conduct that allegedly caused reputational damage. The defendants had posted negative statements about the plaintiff's products on a product review website. The matter was heard in the Supreme Court of Queensland. The plaintiff sought to amend its statement of claim to include allegations of misleading or deceptive conduct in trade or commerce by the defendants, as well as to better particularise the loss and damage claimed.

The court considered whether the defendants' conduct constituted misleading or deceptive conduct in trade or commerce and whether the plaintiff had adequately pleaded the cause of loss and damage. The court also considered whether the plaintiff should be required to provide security for future costs, as it was a corporate trustee of a unit trust and the right of indemnity against trust assets was uncertain.

The court found that the defendants' conduct did constitute misleading or deceptive conduct in trade or commerce, as it was a form of commercial activity that could potentially influence the purchasing decisions of consumers. The court also found that the plaintiff had adequately pleaded the cause of loss and damage, as it had pleaded that the defendants' conduct caused it to lose customers and suffer reputational damage. The court further found that the plaintiff should be required to provide security for future costs, as the persons standing behind the plaintiff were taking a benefit of the proceeding and there was a risk that the plaintiff would be unable to pay costs on demand. However, the court found that there was no risk of stultification, as the merits of the claim had not been finally determined.

The court ordered that the plaintiff provide security for future costs only, in the amount of $25,000, pursuant to section 1335(1) of the Corporations Act 2001 (Cth) and Rule 62.02 of the Supreme Court (General Civil Procedure) Rules 2005. The court also granted leave to the plaintiff to amend its statement of claim as sought.

Orders