High Quality Jewellers Pty Ltd (ACN 119 428 394) v Ramaihi (Ruling)

[2022] VCC 1924

IN THE COUNTY COURT OF VICTORIA

AT Melbourne

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

Case No. CI-22-00224

HIGH QUALITY JEWELLERS PTY LTD (ACN 119 428 394) (as Trustee of the D M and E E HARRIS FAMILY TRUST)	First Plaintiff
ELVI HARRIS	Second Plaintiff
MARC SALZMANN	Third Plaintiff
V
HASSAN RAMAIHI	Defendant

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JUDGE:	HER HONOUR JUDGE CLAYTON
WHERE HELD:	Melbourne
DATE OF HEARING:	3 November 2022
DATE OF RULING:	3 November 2022
CASE MAY BE CITED AS:	High Quality Jewellers Pty Ltd (ACN 119 428 394) & Ors v Ramaihi (Ruling)
MEDIUM NEUTRAL CITATION:	[2022] VCC 1924

EX TEMPORE RULING
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Subject:PRACTICE AND PROCEDURE

Catchwords:              Defamation – application to adjourn the hearing of the serious harm element to the trial of the proceeding

Legislation Cited:      Defamation Act 2005 (Vic), s10A(4)(a)

Cases Cited:              Wilks v Qu (Ruling 2) [2022] VCC 1503; Newman v Whittington [2022] NSWSC 249; Randell v McLachlain [2022] NSWDC 506; Martin v Najem [2022] NSWDC 479; Scott v Bodley [2022] NSWDC 459

Ruling:  Application to adjourn dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J C Hooper	ACI Legal
For the Defendant	Mr S E Kearney	FJR Lawyers

HER HONOUR:

1On the Court’s own motion, pursuant to s10A(4)(a) of the Defamation Act 2005 (Vic), I listed this matter for a hearing of the serious harm element.

2On 2 November 2022, the parties forwarded to the Court a Proposed Minute of Consent Order seeking to adjourn the hearing of the serious harm element to the trial of the proceeding.  The parties considered that the serious harm element might require a finding of fact in relation to the truth of allegations.  In Wilks v Qu (Ruling 2), I decided that it was inappropriate to proceed with a serious harm hearing if there was a prospect that a finding of fact in relation to the truth of allegations would be necessary.[1]

[1][2022] VCC 1503

3There are a number of factors that distinguish this case from the circumstances in Wilks v Qu.  In that case, there was no dispute that the allegations were capable of causing serious harm or that the plaintiff had suffered serious harm to his reputation.  In that case, the defendant made complaints of sexual harassment by the plaintiff to two individuals and to representatives of two organisations.  One of the issues in that case was causation -  whether the harm was caused by the plaintiff’s publication of the allegations, or whether the harm to the plaintiff’s reputation arose, for example, as a consequence of the plaintiff’s actions in having a sexual relationship with a much younger athlete he was coaching, or as a consequence of subsequent publicity about the allegations made. 

4A question then arose as to whether that subsequent publicity could be attributed solely to the legal proceedings or would have arisen in any event, and, if so, to what extent, as a consequence of, for example, the internal investigations launched.  There was some prospect in that case that the truth or otherwise of the allegations made by the defendant may have a bearing on the question of the natural and probable consequences of the publication.  For example, if the internal investigations had made findings that the allegations were not made out, whether nevertheless this would have resulted in further publication that would be likely to have caused serious harm to the plaintiff’s reputation.

5In contrast, this is a claim that relates to a single publication on a public Google reviews webpage – a review that remains available today.  The truth or otherwise of the publication may be relevant to the question of damages, and may be relevant to whether any defence is made out by the defendant.  However, it is not apparent that the truth of the allegation is relevant to the question of serious harm.

6The plaintiffs submit that, as the review was not a genuine review and was motivated by malice, the usual steps the plaintiff would take in relation to a negative review – to reach out to the disgruntled customer for example and try to resolve the issue – were not available.  The plaintiffs were also not able to have the review removed by Google.

7In those circumstances, the plaintiffs say the only available option was to issue these proceedings.  As a consequence of issuing these proceedings, there has been publicity about the case which may have caused additional harm to their reputations.  The plaintiffs submit that the fact the review was not true is a relevant issue and may require a finding of fact by the Court.

8The serious harm element is now a part of the tort of defamation.  Unless there is serious harm, there is no actionable claim.

9As determined by Sackar J in Newman v Whittington, it is a reversal of the previous position that harm to reputation is assumed.[2]  The legislation imposes a substantial burden on plaintiffs to prove the publication of the defamatory matter has caused, or is likely to cause, serious harm to the reputation of the person.

[2][2022] NSWSC 249 [47]

10That requires, in the words of Gibson DCJ in Martin v Najem, “fact rich proof of harm” which is or is likely to be serious.[3]

[3][2022] NSWDC 479 [70]

11It cannot be right that a plaintiff can issue proceedings and rely on subsequent harm caused by publicity consequent upon the litigation to establish serious harm.  The tort must be complete prior to proceedings being issued.  The publication itself must have caused, or be likely to cause, serious harm.

12If additional harm is caused by publicity generated by the legal proceedings, this is an element that may be appropriate to the determination of damages.  However, it cannot be the foundation for the tort itself.

13As Gibson DCJ said in Randell v McLachlain:

“…, for the plaintiff to commence proceedings, the ambit of the case needs to be determined.  Is it ‘serious harm’ or just ‘harm’?  … .”[4]

[4][2022] NSWDC 506 [25]

14The plaintiffs submit that the question of the defendant’s motivation, the matrix of facts that surrounds the background to his leaving the review, the element of malice involved in leaving the review and the fact that the review was untrue are all inextricably linked to the harm the plaintiffs suffered.  As a result, the plaintiffs say it is inevitable the Court would have to make findings about the truth of the review and the motivation of the defendant’s conduct.

15I accept that those matters may increase the harm the plaintiffs have suffered in terms of their hurt and embarrassment.  I cannot see that those matters have a role in determining whether serious harm has or has not been established. 

16The element of serious harm has to be determined having regard to evidence.  The serious harm threshold is assessed, at least in this instance, on the basis of the imputations the plaintiffs contend – that is, the imputations that may be conveyed at their highest by the words published.  The burden is on the plaintiffs to establish that the imputations for which they contend caused the necessary harm to their reputations.

17The harm to reputation will be harm in the eyes of persons who read the Google review or otherwise become aware of the review through the grapevine effect.  I am not persuaded that the defendant’s motives or the truth or otherwise of the content of the review is relevant to an assessment of the harm, nor that the Court will inevitably have to make a determination of truth in deciding the serious harm element. 

18The plaintiffs further contend that other special circumstances apply to this case which make it appropriate to adjourn the hearing to the trial.

19The first plaintiff pleads a claim in injurious falsehood which is not subject to a serious harm test.

20Many of the elements required to establish a defamation claim will be common to the injurious falsehood claim.  All the plaintiffs would be required to give evidence at trial and this would result in minimal cost savings if the serious harm element was determined prior to trial.

21Further, there would be significant prejudice, both in costs and in terms of the preparation and presentation of the case. The plaintiffs submit it is unfairly prejudicial for them to have to put on evidence at this point in the proceeding upon which they can be cross-examined, and to then have to give further evidence at trial. 

22Serious harm as an element of defamation is still in its infancy in Australia.  What will constitute special circumstances is still very much in the process of being determined by the courts.

23I am greatly assisted by the recent decisions of Judge Gibson in the New South Wales District Court who, more than anyone else, has been resolving some of the complex issues this new threshold issue raises.  In her decision in Scott v Bodley, she considers the factors which may be considered.[5]  That case, like this, involved a negative social media review about a business owned and operated by the plaintiff.

[5][2022] NSWDC 459, 15

24Her Honour notes factors against having a preliminary hearing may include where there is a significant amount of evidence to be heard and where that evidence would overlap with the trial.

25In this case, the serious harm hearing would not involve evidence about the motivations of the defendant or the rent dispute between the plaintiffs and the defendant.  The evidence would not extend to evidence about hurt to feelings, stress, distress and anxiety.  It would be confined solely to the harm to their reputation by the publication.  Affidavits have already been filed.  If the defendant seeks to cross-examine any of the witnesses who have filed affidavits, that cross-examination will be confined to issues directly relevant to evidence about the harm sustained.  This is not evidence that would then have to be given again at trial, albeit the plaintiffs would not be shut out from giving evidence about any additional harm to reputation.

26I accept that there is an overlap between the evidence in the defamation proceedings and the evidence in the injurious falsehood proceeding.  This will likely include evidence about the background to the dispute between the plaintiffs and the defendant in relation to rent and the motivation for the defendant’s review. 

27However, there is a prospect that the determination of the serious harm element would finally determine three of the four plaintiffs’ claims, which would result in a considerable saving of court time.  In the event the second, third and fourth plaintiffs established serious harm, there would still be some time saving at trial in not having to prove the serious harm element, albeit that saving would be modest and likely off-set against the time taken for the serious harm hearing itself. 

28Determining the serious harm element prior to trial could result in a significant saving of costs and resources, or could result in no cost or resource saving, but is unlikely to result in a significant additional cost or a significant drain on resources.

29On balance I am not persuaded that special circumstances exist so as to warrant postponing the determination of the serious harm element to the trial.  Consequently, the application to adjourn is dismissed.

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