Harmonious Blend Building Corporation v Keene (No 2) - [2015] VSC 276

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

MAJOR TORTS LIST

S CI 2014 0511

HARMONIOUS BLEND BUILDING CORPORATION PTY LTD (ACN 006 261 089)	Plaintiff
v
PATINA KEENE & ANOR	Defendant

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JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24 APRIL 2015
DATE OF RULING:	24 JUNE 2015
CASE MAY BE CITED AS:	HARMONIOUS BLEND BUILDING CORPORATION v KEENE & ANOR (NO. 2)
MEDIUM NEUTRAL CITATION:	[2015] VSC 276

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PRACTICE AND PROCEDURE — Amendment of pleading — Plaintiff claimed reputational damage and loss of business from conduct of defendants that was misleading or deceptive — Statements posted on product review website by defendants— Adequacy of particulars — Whether causation adequately pleaded — Whether adequate causal nexus alleged between reliance and the type of loss pleaded — s 236(1)(a) of the Australian Consumer Law considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Castelan with Ms L Papaelia	Bruce Caldwell & Associates
For the Defendant	Mr S Wilson QC	Robert Wood & Associates

HIS HONOUR:

In this proceeding, the plaintiff again seeks leave to amend its further amended statement of claim, specifically in relation to its claims that it suffered loss caused by the defendants contravening s 18 of the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct in trade or commerce.

The relevant conduct alleged concerns two publications posted on the internet. It is convenient to address the contentions on the application by reference to the conduct of the first defendant. The relevant publications by the first defendant were in the nature of a critical review of the plaintiff’s services on a product review website. The first publication on 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 they have tricked us into signing an amended plan that leaves yet more work for us to do for them! We would not recommend these builders to anyone we like. They not only rip off and stress out their clients, they must treat their sub-contractors the same way because they don’t seem to hang around either.

The second publication on 11 December 2011 was similar in nature. It read:

We have had to deal with these builders for nearly three years to get our house…

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: [2015] VSC 276
Decision Date: 24 JUNE 2015

CaseChat Overview and Summary

In Harmonious Blend Building Corporation v Keene (No 2), the plaintiff, a building corporation, sued two defendants for statements posted on a product review website that it claimed were misleading or deceptive. The defendants had posted negative reviews about the plaintiff’s building services, which the plaintiff argued caused it reputational damage and loss of business. The case came before the court on a preliminary issue concerning the adequacy of the plaintiff’s particulars.

The legal issues before the court were whether the plaintiff's pleadings sufficiently alleged a causal nexus between the defendants' conduct and the claimed losses. Specifically, the court had to consider whether the plaintiff had adequately pleaded causation under section 236(1)(a) of the Australian Consumer Law, which requires a causal connection between the misleading or deceptive conduct and the loss suffered.

The court held that the plaintiff's pleadings were deficient in establishing causation. The plaintiff had to demonstrate that the reliance on the misleading or deceptive statements caused the alleged damages. The court found that the plaintiff had not sufficiently pleaded how the negative reviews led to the specific losses claimed. The court emphasised the need for detailed particulars to show a clear link between the defendants' conduct and the harm suffered by the plaintiff.

The court ordered the plaintiff to amend its pleadings to more precisely articulate the causal connection between the defendants' conduct and the losses claimed. The plaintiff was required to provide further details on how the reliance on the negative reviews resulted in the alleged reputational damage and loss of business.

Orders