High Quality Jewellers Pty Ltd v Ramaihi (Ruling)
[2022] VCC 2240
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
Defamation List
Case No. Cl-22-00224
| High Quality Jewellers Pty Ltd (ACN 119428394) as trustee of DM & EE Harris Family Trust | First Plaintiff |
| and | |
| Darren Harris | Second Plaintiff |
| and | |
| Elvi Harris | Third Plaintiff |
| and | |
| Marc Salzmann | Fourth Plaintiff |
| v | |
| Hassan Ramaihi | Defendant |
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JUDGE: | Her Honour Judge Clayton | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 and 30 November 2022 | |
DATE OF RULING: | 16 December 2022 | |
CASE MAY BE CITED AS: | High Quality Jewellers Pty Ltd & Ors v Ramaihi (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 2240 | |
RULING
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Subject:DEFAMATION
Catchwords: Serious harm element of defamation – Google review published on plaintiffs’ Google business page
Legislation Cited: Defamation Act 2005 (Vic)
Cases Cited:Zimmerman v Perkiss [2022] NSWDC 448; Newman v Whittington [2022] NSWSC 249; High Quality Jewellers Pty Ltd (ACN 119 428 394) & Ors v Ramaihi (Ruling) [2022] VCC 1924; Rader v Haines [2022] NSWCA 198; Dhir v Saddler [2017] EWHC 3155 (QB); [2018] 4 W.L.R.1 [55]; George v Cannell and another [2021] EWHC 2988 (QB) [118]
Ruling: The second, third and fourth plaintiffs have not established serious harm to their reputations. Accordingly their claims against the defendant are dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J Hooper | ACI Legal |
| For the Defendant | Ms S Kearney | FJR Lawyers |
HER HONOUR:
1This is a trial to determine the new serious harm element of the tort of defamation.
2Section 10A of the Defamation Act 2005 provides:
(1)It is an element (the serious harm element) of a cause of action for defamation that the publication of defamatory matter about a person has caused, or is likely to cause, serious harm to the reputation of the person.
3The legislation was enacted as a reform to encourage certain types of claims to resolve without resort to litigation, in particular claims where damages might be modest and out of proportion to the costs of a proceeding.[1]
[1]Zimmerman v Perkiss [2022] NSWDC 448 [2] (‘Zimmerman v Perkiss’); Newman v Whittington [2022] NSWSC 249 [30]–[49]
4Where a party makes an application, the legislation requires the element to be determined prior to the trial unless there are special circumstances. The court can also determine the element prior to trial on its own motion as occurred in this case. The plaintiffs applied to adjourn the hearing to the trial of the proceeding. In my ruling,[2] I found there were no special circumstances to warrant postponement of the determination to trial,
[2]High Quality Jewellers Pty Ltd (ACN 119 428 394) & Ors v Ramaihi (Ruling) [2022] VCC 1924
5Evidence was given by way of affidavit. The second, third and fourth plaintiffs were cross-examined and the hearing was completed within a day, save for closing submission for which parties requested an opportunity to review transcript,.
The Parties
6The second, third and fourth plaintiffs are all involved in the same family-run jewellery business, High Quality Jewellers Pty Ltd, which is the first plaintiff in these proceedings. High Quality Jewellers Pty Ltd operates two Micheli Jewellery stores in Moonee Ponds and Armadale. The second plaintiff, Darren Harris, is a director and company secretary of the first plaintiff. The third plaintiff, Elvi Harris, is the wife of Mr Harris and co-founder of Micheli Jewellery. The fourth plaintiff, Mark Salzmann, is the son of the Ms Harris and a co-founder of Micheli Jewellery.
7Mr and Ms Harris and Mr Salzmann were all involved in the day-to-day operations and management of Micheli Jewellery and in customer service in both stores.
8The defendant, Mr Ramaihi, is the owner of a residential apartment which was previously leased by him to Mr and Ms Harris. Mr Ramaihi and Mr and Ms Harris had been involved in a dispute over the rent of that apartment.
The matter complained of
9The plaintiffs allege that, on 11 October 2021, Mr Ramaihi wrote and uploaded to ‘Google Reviews’ for Micheli Jewellery Moonee Ponds the following review (“the Ramaihi review”):
“my experience with Micheli Jewellery was disappointing. the customer service provided was rude and not helpful and when finally receiving a quote for what I was after I found that it was almost twice as expensive to the jewellery story up the road. I would recommend you shop elsewhere where you can save yourself money and enjoy being looked after.”
The Imputations
10The plaintiffs say the publication conveys defamatory imputations that each of them:
(a) engaged in such rude customer service towards a Micheli Jewellery customer, Hassan Ramaihi, that Hassan Ramaihi uploaded a one out of five-star review about his experience;
(b) engaged in such unhelpful customer service towards a Micheli Jewellery customer, Hassan Ramaihi, that Hassan Ramaihi uploaded a one out of five-star review about his experience;
(c) acted so unscrupulously by excessively quoting Micheli Jewellery customer Hassan Ramaihi almost twice as much as Micheli Jewellery’s competitor that Hassan Ramaihi recommends shopping elsewhere.
11There was no dispute by the defendant about the meanings conveyed and no application for a determination on the imputations. The current practice in Australia seems to be that, for the purposes of a serious harm hearing, the imputations are accepted as pleaded by the plaintiff, unless an application has also been made for a determination on meaning.
12This raises the theoretical, though perhaps unlikely, prospect that serious harm could be found where imputations are not conveyed, or where imputations are overturned on appeal. Presumably if the imputations are seriously in dispute, the defendant will seek a preliminary determination of meanings as part of the serious harm hearing, and this would certainly be desirable.
13Judge Gibson has raised this problem in Zimmerman v Perkiss:
“At some stage, Australian courts may need to consider the English case management practice of having the judge determine the imputations rather than being forced to accept the plaintiff’s drafting and, in addition, do so, as a matter of routine, “on the papers”. This would avoid the unfortunate result of lengthy trials on all issues when the imputations have been so poorly pleaded that they are not conveyed or, worse, when the findings concerning the imputations are reversed on appeal.”[3]
[3]Zimmerman v Perkiss (supra) [11]
14This hearing proceeded on the basis that the imputations were conveyed.
Serious Harm Element
15There are two kinds of harm envisaged by the legislation – harm that has already occurred and harm that is likely to occur. Evidence for each harm relies on propositions of facts which require investigation of the actual impact of the statement.[4] Collectively the harm, whether it has occurred, or is likely to occur, must objectively be serious.
[4]Zimmerman v Perkiss (supra) [28]
16In Radar v Haines, the Court considered the corresponding provisions in the Defamation Act 2013 (UK).[5] The following points emerged from that analysis:
(a) the harm that has been, or is likely to be, caused is generally measured by combination of the inherent tendency of the words and their actual impact on those to whom they were communicated;
(b) relevant considerations include: the meaning of the words, the extent of the publication, the nature of the recipients and their relationship with the plaintiff, and whether they (the recipients) believe the imputations;
(c) the harm is confined to reputation – injured feelings is not sufficient, no matter how great the injury to feelings is;
(d) serious harm involves harm that sits on a spectrum above ‘substantial’, though below ‘grave’. There can be harm which, though substantial, does not reach the level of ‘serious’ harm;
(e) it is the seriousness of the harm (ie the impact) of the publication which is in question; not the seriousness of the imputation. Thus a grave imputation may not result in serious harm, typically where the publication is to a small number of persons well acquainted with the plaintiff who are not disposed to believe it, and where any impact of the imputation on the plaintiff’s reputation is transitory or ephemeral;
(f) there may be serious harm without there being permanent harm;
(g) any “grapevine effect” would be relevant in establishing serious harm.
[5][2022] NSWCA 198
17The legislation requires the court to assess the harm caused by ‘publication of the defamatory matter’. What is required is an assessment of all of the circumstances, not just an examination of the words themselves.
18The plaintiffs concede that the words themselves might not have an inherent tendency to cause harm. They say that in all the circumstances of this case, which involves a highly competitive industry with high value and low volume trading, even one negative review has the capacity to cause serious harm to reputation.
Extent of Publication
19In Zimmerman v Perkiss, Gibson J held the extent of publication is a ‘central factor’ in determining serious harm.[6]
[6](Supra) [33]
20It is for the plaintiffs to establish the extent of publication. They say the Ramaihi review was published on 12 October 2021 and remains visible to the public to date. It was not published on a private forum and cannot be said to be transient or ephemeral.
21The plaintiffs argue the Court can infer it has been read by a substantial number of people, including potential customers of Micheli Jewellery because:
(a) between 21 October 2021 and 17 January 2022 when proceedings were issued, there were about 26,000 visitors to the Micheli Jewellery Moonee Ponds Google business page. Around 15,000 viewed the profile via Google Maps and around 13,000 viewed the profile via Google Search.
(b) between 11 May 2022 and 5 August 2022 there were about 27,200 visitors to the Micheli Jewellery Moonee Ponds Google business page.
(c) for at least a week after 12 October 2021 the Ramaihi review was the top result on the Micheli Jewellery Moonee Ponds Google review page when sorted by ‘most relevant’.
(d) as at 8 August 2022 the Ramaihi review had 14 ‘likes’.
(e) since the Ramaihi review there have been six one-star reviews posted which do not appear to be from genuine customers.
22The plaintiffs say it can be inferred that some number of potential customers accessed and read the Google business page, including the Google reviews attached to that profile and therefore the Ramaihi review. It can further be inferred that during the period when the Ramaihi review was the top result when sorted by relevance, it was likely to be more easily accessible and more readily seen by visitors to the Google review page.
23There was evidence of a grapevine effect. Mr Syzmanski gave evidence a client of his mentioned the Ramaihi review to him. Mr Salzmann said a number of customers, family members and friends had asked him about the Ramaihi review.
24The plaintiffs say they received a number of ‘hoax’ phone calls abusing them ‘in relation to the Ramiahi review’.[7]
[7]First Affidavit of Darren Harris dated 9 August 2022 [42] (‘Exhibit P1’)
Conclusions concerning extent of publication
25Evidence as to the raw number of views a Google business page has had does not shed a great deal of light on the number of people who have seen the Ramaihi review. There was no evidence as to the numbers of people who had clicked on the Ramaihi review.
26The court can draw an inference that some number of people have seen the review. There are fourteen likes, and evidence of some grapevine effect. Not everyone who saw the review would have clicked the ‘like’ button, so the number of people who saw it would exceed this number. However the timing of those ‘likes’ and the timing of that grapevine effect is unclear. That is particularly relevant in this case as this proceeding was the subject of media attention in June 2022 and this media attention may have caused additional harm. The plaintiffs do not rely on harm caused by issuing the proceeding to establish serious harm though it would clearly be relevant to an assessment of damages. However the plaintiffs are entitled to rely on harm that has been caused since the proceedings were issued, that is not harm caused because the proceedings were issued. For example the fact that the review still exists and could continue to cause harm into the future is an appropriate matter to consider under the legislation which includes harm that is ‘likely to occur’. Harm caused because members of the public took a particular view about the merit of otherwise of the plaintiffs’ issuing legal proceedings is not harm of the kind envisaged by the legislation which requires the plaintiffs to have suffered serious harm to reputation arising from the publication.
27Obviously a review that appears as the top result is more accessible and more likely to be read than one that appears further down the list. However appearing as a top result when sorted for ‘relevance’ gives me little information to draw any inference as to how many people actually saw the review. There is no evidence of how many people sorted the reviews by relevance. I do not know whether that data is available though I am generally aware that businesses that have a Google Business page have access to some data in relation to search results, and page visits.
28The evidence as to hoax calls does not tell me anything about the extent of publication. There is no information about the volume or timing of these calls, and they may have occurred after the media publicity about the case. There is no evidence as to the content of these calls, other than that they were in relation to the Ramaihi review.
29I note the comments of McDonald J in Srecko and David Lorbek v Peter King which also involved a claim arising from a Google review.[8] In that case his Honour held there was no direct evidence regarding the number of people who had clicked on the Google reviews complained of. Nevertheless he was able to draw an inference that a proportion of the 1500 people who accessed the plaintiffs’ business website each day entered the website through a Google search engine. He inferred that those who found the website through a Google search would have seen the Google business page on which the Google reviews were posted. A proportion of those people would have ‘sorted’ the reviews so as to make the subject reviews visible. In that case there was no direct evidence of any third party having read any of the reviews complained of, there were no comments and no ‘likes’. His honour concluded that it was not possible to make any finding as to the actual number of people who accessed and read the review. The lack of evidence supported a finding that only a small number of people read and accessed the posts. He found that “beyond this finding there is no platform of facts on which an inference can be drawn as to the extent of the publication.”[9]
[8][2022] VSC 218
[9](Supra) [71]
30Given the nature of the platform upon which publication occurred, being a review on a Google business page that appears as part of a search engine function, I cannot be satisfied that all of those who visited the page saw or read the review. Plaintiffs’ counsel submitted that there would be no reason for a person to visit the business page, other than if they were potential customers of Micheli Jewellery and such persons would have an interest in reading reviews, particularly negative reviews. I do not consider that inference is open. There are many ways in which the business page can turn up as a result from a Google search, and, without more, I cannot draw an inference that all or most of the 26,000 visitors to the business page accessed or read the review.
31There is evidence that the Ramaihi review was seen by Mr Szymanski and a client of his prior to legal proceedings being issued. There is some evidence of a grapevine effect prior to legal proceedings being issued. However being available to a wide audience is not the same as being read by a wide audience and I cannot make any finding on the number of people who actually read the Ramaihi review.
32I accept that seriousness of harm is not ‘merely an arithmetical test’ and publication to a wide or small group of people does not equate to a finding of serious harm or otherwise.[10]
Evidence relied on to establish serious harm
[10]See Dhir v Saddler [2017] EWHC 3155 (QB); [2018] 4 W.L.R.1 [55]; George v Cannell and another [2021] EWHC 2988 (QB) [118]
Darren Harris
33Darren Harris says Micheli Jewellery website has only 6 one-star reviews, the lowest rating for a Google review. He says “these do not appear to be from genuine customers”. Prior to the Ramaihi review there were only 2 one-star reviews made approximately 3 years ago. Mr Harris says the veracity of the reviews could not be ascertained.
34Mr Harris says the turnover for Micheli Jewellery dropped by $121,000 when comparing the period 1 November 2020 to 30 April 2021 to the period 1 November 2021 to 30 April 2022.[11]
[11]Exhibit P1 [48]
35He says the actual reduction in turnover is greater because the COVID-19 pandemic affected the turnover of the business, so comparison with pre-COVID 19 turnover demonstrates a reduction of $286,000.[12]
[12]Exhibit P1 [48]
36He says gold buying transactions fell from $152,004.01 during the period 13 October 2020 to 4 April 2021 to $95,688.90 during 13 October 2021 to 4 April 2022, a reduction of about $56,000.[13]
[13]Exhibit P1 [49]
37He estimates the financial damage he has suffered is between $176,000 to $400,000.[14]
[14]Exhibit P1 [50]
38The lower end of this estimate appears to be calculated by adding the drop in revenue of $121,000 to the reduction in gold buying sales of $56,000. This cannot represent the loss to Mr Harris or the business.
39In cross examination Mr Harris said purchasing less gold resulted in less profit for the business. He said “for every $50,000 that we buy from the public we make probably $30-$40,000 extra”[15]. He then said “If we bought $100,000 of gold in the previous year we potentially would have made – sold that and made $200. In the year after the review if we bought 50 we would have made 80 or 90”.[16]
[15]Transcript (“T”) 72, Line (“L”) 10-12
[16]T71, L17-21
40What I understood Mr Harris was saying was that Micheli Jewellery buys gold from the public and sells that gold at a profit. Because they bought less gold in the approximately six month period after the review was published than in the comparable period the year before, they did not have as much gold to sell and could not make as much profit.
41So much makes sense. However his evidence as to what the actual loss occasioned to the business amounted to is confusing and cannot be accepted.
42The business spent $56,000 less on gold in the approximately six month period after the review than in the same period the previous year. He said the business could sell $50,000 worth of gold it had purchased for $30,000 or $40,000 more, a profit of 60-80%. He then said it could sell $100,000 of purchased gold for $200,000, a profit of 100%.
43If the business spent $56,000 less buying then on Mr Harris’ evidence the profit loss to the business would be somewhere between $33,600 and $56,000. There is no basis for adding the $56,000 to the $121,000 he claims for reduction in turnover. One is a loss of profit to the business of $56,000. The other is the reduction in turnover for a period.
44Presumably, on Mr Harris’ evidence, the reduction in gold buying would have resulted in a loss of turnover of between $89,600 and $112,000. This figure must already be accounted for in the $121,000 he claims as the reduced turnover, albeit that the periods cited do not entirely overlap.
45There are further difficulties. Mr Harris has made calculations based on turnover rather than profit. He defended this decision on the basis that expenses did not change much from year to year. There was a ‘break even point’ to cover expenses and “once you go past that, generally it’s nearly all profit”.[17] He said “turnover for this year might be $2million and…expenses are $1.1 or $1.8 mil; next year our turnover may be $3million but our expenses still might be $1.8, or $1850”.[18]
[17]T75, L7-10
[18]T75, L15-17
46The calculation of loss has been made by adding together a reduction in turnover with a reduction in profit. Because the actual profit or loss is not in evidence, the turnover tells me nothing about the loss to the business. He cites turnover for the period 1 November 2020 to 30 April 2021 as $1,448,383.24 and turnover for the period 1 November 2021 to 30 April 2022 as $1,327,997.45. Turnover for the same period pre-COVID 19 was $1,613,955.14.
47It is impossible to conclude anything from this evidence in the absence of the actual data about what expenses the business did incur.
48Although the documents exhibited to Mr Harris’ affidavit are headed ‘Profit and Loss’ in fact all they show is the trading income, or turnover, and not the outgoings and expenses.
49It would have been a simple matter to put before the court evidence of profit for the business. Not doing so leaves open an inference that the profit and loss statements that must be available to the plaintiffs did not assist their case.
50Turnover comparison was provided for a period from 1 November to 30 April in respective years. Gold buying comparison was provided for a period of 13 October to 4 April in respective years. Why gold buying was not provided for the same period as turnover was not explained. This choice leaves open an inference that the time period was selected to assist the case, rather than to assist the Court.
51Finally, Mr Harris’ evidence was that single transactions could range from $10,000 to $40,000.[19] Even on his own evidence, a handful of transactions could account for the difference in turnover as between the 2020 November period and the 2021 November period. In a business such as Micheli Jewellery, which is described as a high value, low turnover business, profits must necessarily vary significantly from month to month. It is not possible to draw an inference based on such a small window.
[19]T75, L19
52I accept that the evidence as to financial loss was based on estimates to support the claim of serious harm to reputation, and is not intended to provide the detailed forensic accounting evidence that would be required to substantiate a claim for pecuniary loss. Nevertheless, to claim that a financial loss has been suffered consequent upon reputational damage, plausible evidence of loss must be provided.
53The evidence does not establish any actual loss to the business. I draw an inference that other evidence that would be available to the plaintiffs would not have assisted their case.
54Mr Harris gave further evidence of serious harm to reputation he says he suffered. He says a friend and business partner started referring to him as ‘Mr Rude’ after media publicity about the case. He said prior to the media publicity he was on good terms with his business partners in Aberline Rd Unit Trust, a separate business venture, and had no difficulties obtaining information about the operations of the unit trust, or conducting business on behalf of the unit trust. After the media publicity he was ‘frozen out’ from the business venture, was unable to obtain information about or conduct business on behalf of the unit trust. He believes this was because his business partners were concerned about the potential that vendors would not trust him or any entity he was involved with.[20]
[20]Exhibit P1 [44]
55As a result his business reputation has been “greatly damaged” and he has been exposed to “significant potential financial losses to an estimated value of $1.6 million”.[21] He said he has had to “resort to commencing a formal mediation process”.[22]
[21]Exhibit P1 [44]
[22]Exhibit P1 [44]
56In cross examination he said the difficulties with his business partners had commenced after the media attention about this defamation proceeding.[23]
[23]T66, L8-12
57This leaves open the question of whether people who saw the media publicity formed a view, adverse or otherwise, about the plaintiffs in relation to the proceedings, rather than in relation to the Ramaihi review. The former would not be something the plaintiffs could rely on in establishing the serious harm element.
58However, setting that to one side and assuming that the harm he alleges was caused solely by the Ramaihi review, the evidence does not support his claim.
59Mr Harris conceded in cross examination that he had been in dispute with his business partners for over three years. He said the communication had stopped ‘well before’ June 2022.[24] He had initiated the mediation prior to the media publicity about the defamation case, although in cross examination he then said that even though he had sent the letter initiating the mediation process, he had still been talking to his partners. His evidence on this point was frankly confusing and evasive.
[24]T66, L15
60Mr Harris’ counsel submitted he no longer relied on any of his evidence about the deterioration of the relationship with his partners to establish serious harm, and that no adverse findings should be made against him in relation to this unsatisfactory evidence as it was a traumatic period and it was understandable that his evidence about exact timing and dates could be confused.
61However his affidavit evidence is unequivocal in that he sought to lay the entirety of the blame for the deterioration in his relationship with his business partners on the reputational damage he says he sustained as a result of the Ramaihi review. In his affidavit he did not say that his relationship worsened after the review, but said he was on “good terms” with his partners and had “no difficulty” in relation to operations of the unit trust.[25]
[25]Exhibit P1 [44]
62His later attempts to resile from this evidence do not alter the fact that his affidavit was not a truthful account of the situation with his partners. His attempt to bolster his case by including this evidence in his affidavit does raise a real issue as to his credit and reliability.
63Other than the evidence as to financial loss and the relationship with his business partners, Mr Harris put on no other evidence of serious harm to his reputation.
Elvi Harris
64In her affidavit Ms Harris says her primary role in the Micheli Jewellery Business is management and overall operations. She is its “creative force”.[26] From time to time she will also provide customer assistance at Micheli Jewellery Moonee Ponds.[27]
[26]Affidavit of Elvi Harris dated 9 August 2022 [8] (‘Exhibit P3’)
[27]Exhibit P3 [8]
65She says in her experience as a business owner a “growing number” of customers are using the internet to shop and conduct pre-purchase research before coming into the shop to view products.[28] She says she has been mentioned by name in eighteen complimentary reviews. She says the Ramiahi review ‘severely undermined the business reputation of the Micheli Jewellery Business’.[29] She says the imputation that she had provided rude and unhelpful customer service:
“has reduced my customer lifetime value and killed my conversion rates, with the cost and efforts I have put into generating sales leads being wasted. This is both a financial loss to the business and to me personally as a business owner.”
[28]Exhibit P3 [11]
[29]Exhibit P3 [12]
66She says the imputation that she overcharges “has severely eroded customers’ trust in our business and very likely driven customers away to our competitors”.[30]
[30]Exhibit P3 [15]
67She says the negative rating will affect the Google search engine rankings which means Micheli Jewellery Business is less likely to “organically appear on the front page of searches for retail jewellery stores by potential customers”.[31]
[31]Exhibit P3 [17]
68She says the subsequent media reporting and “fake one-star Google Reviews by online trolls” have damaged her personal reputation by creating distrust and gossip aimed at her, her husband and son.[32]
[32]Exhibit P3 [22]
69She says Marisa Giarrusso told her that her son, Anthony Giarrusso was considering putting in a custom order for an engagement ring with Micheli Jewellery but decided not to do so ‘due to the Ramaihi Review’.[33]
[33]Exhibit P3 [23]
70She says she has lost close personal friends because of the review “due to increased distrust” with two families no longer frequenting the business.[34] One customer Maria Simon, claimed jewellery she left with the business was lost and “referred to the Ramaihi Review left on Micheli Jewellery Moonee Ponds Google Review page to discredit our response and give greater weight to her position in this matter”.[35]
[34]Exhibit P3 [24]
[35]Exhibit P3 [24]
71Another large family, the Giulemino family, has stopped patronising the business and the loss of their custom has cost thousands of dollars.[36]
[36]Exhibit P3 [24]
72She says she would usually get about twenty requests for donations each year, and would usually make donations totalling about $25,000 a year. Since the Ramaihi review she has had only one request for a donation.[37] She attributes this reduction in requests for donations to the Ramaihi review.
[37]Exhibit P3 [26]
73In cross examination Ms Harris explained that since having COVID 19 earlier this year, her memory has been affected and she has difficulty recalling dates.[38]
[38]T80, L20-L23
74Ms Harris was asked whether, after previous negative reviews, requests for donations had similarly declined. She said she did not know the answer and could not recall, she could only remember that after the Ramaihi review the request for donations declined.[39]
[39]T83, L11-L30
75There is no information available to the court about these requests for donations, for example whether requests were from the same organisations each year such as local schools or charities. There is no evidence that any of the persons or organisations who would typically solicit a donation were aware of the Ramaihi review and it is not apparent to me why this review would deter someone soliciting donations. I accept it is not always possible to obtain direct evidence from individuals about reputational damage, or to obtain evidence as to the motivation for an individual taking some particular action. The court must sometimes draw inferences to reach conclusions. However, in this case it seems implausible that a person or organisation which would otherwise have solicited a donation from Micheli Jewellery, would not do so because of the Ramaihi review. The evidence is insufficient for me to draw an inference that the reason for the decline in requests for donations is the Ramaihi review.
76Ms Harris also gave evidence that there had been a drop in sales since the review and that she had taken an average of the sales she estimates she lost and come to a figure to calculate the financial loss caused by the Ramaihi review.[40] The value of each sale would vary significantly, from $10,000 to $80,000.[41]
[40]T84, L22
[41]T84, L19-L27
77Although the range of the loss she arrived at was the same as the range Mr Harris had arrived at based on turnover and reduction in gold sales, Ms Harris said she arrived at hers independently, “with some help from him”.[42]
[42]T86, L11
78Her evidence on this point suffers from the same difficulty as Mr Harris’ evidence. There must be better evidence available that could demonstrate a loss, whether it is profit and loss statements, or data to show a decline in sales each month.
79I am not satisfied that the evidence supports a finding that there has been a financial loss.
80Ms Harris however also relied on evidence of specific losses, including the loss of the business of Ms Guirusso’s son, and the loss of the business of the Giulemino family and the loss of business from Maria Simon. Ms Guirusso told Ms Harris that her son did not go ahead with the purchase of an engagement ring because there had been so many negative reviews lately. This was admissible as evidence that Ms Guirusso was aware of the Ramaihi review, not as evidence that Micheli Jewellery lost the custom of Ms Guirusso’s son. For the purpose of this hearing this establishes only that Ms Guirusso was aware of negative reviews of Micheli Jewellery.
81In relation to the Giulemino family, the evidence went no further than that this family is no longer frequenting Micheli jewellery stores. There was no evidence that any member of the family, or anyone else, had said this was because of the Ramaihi review.
82In relation to Maria Simon, it appears there was a separate dispute over an allegedly lost ring. Ms Simon allegedly referred to the Ramaihi review to “discredit our response and give greater weight to her position in the matter’”.[43] Ms Simon allegedly claimed in May 2022 to have left jewellery with Micheli Jewellery for which they had no record and to then allege Micheli Jewellery had lost the jewellery.[44] It is difficult to see that the Ramaihi review had caused harm to Ms Harris’ reputation prior to Ms Simon’s own dispute with the business, given that the Ramiahi review was posted in October 2021 and Ms Simon allegedly left the jewellery in around May 2022.
[43]Exhibit P3 [24]
[44]Exhibit P3 [24]
83Ms Harris also gave evidence of negative feedback from several clients who had read media reports on the Ramaihi review and had questioned “our business ethics…and our customer service engagement’.”[45] She said suppliers had also “questioned our credibility and are concerned about whether their products should be distributed within the Micheli Jewellery business”.[46]
[45]Exhibit P3 [23]
[46]Exhibit P3 [26]
84There is no evidence that those clients who had negative feedback stopped coming to Micheli Jewellery. There is no evidence that suppliers who raised questions stopped supplying or took any other action. The evidence is expressed in general terms and lacks the sort of specific particulars that would identify serious harm to reputation.
85Having questions raised about ones ethics and receiving negative feedback is undoubtedly unpleasant and distressing. I have no doubt that Ms Harris has been deeply affected and upset by the Ramaihi review. This hurt has no doubt been exacerbated by her sense of injustice, as in her view the review was not just undeserved but was malicious and designed to do harm.
86It is not difficult to understand why, in the context of reading a negative review which feels maliciously motivated, she would feel enormous concern at the potential for damage to her business. This does not equate to serious harm.
Marc Salzmann
87Mr Salzmann says he is the “key face” of the business and appears in promotional material on the Micheli Jewellery website and social media pages.[47] He has been mentioned by name in 67 Google reviews for providing excellent customer service.[48] He says it is ‘inevitable’ that customers would think the Ramaihi review was indirectly referring to him.[49]
[47]Affidavit of Marc Salzmann dated 9 August 2022 [9] (‘Exhibit P4’)
[48]Exhibit P4 [9]
[49]Exhibit P4 [15]
88He says Google reviews are the business’ “number one” marketing tool.[50] He says the review has reduced customer confidence in the brand and he has had “multiple customers question me about what the Ramaihi review is about”.[51] He says the business has lost sales and he has “lost respect from customers with the hurt to my business reputation”.[52]
[50]Exhibit P4 [13]
[51]Exhibit P4 [13]
[52]Exhibit P4 [13]
89He says he has been asked by customers, family members and friends “whether I was at fault and what I had done to provoke the defendant to leave such a review”.[53]
[53]Exhibit P4 [14]
90He says he has noticed a reduction in online queries for products and services.[54]
[54]Exhibit P4 [19]
91He has had to spend valuable time and resources on:
“increasing staff training on responding to trolls or unfair negative feedback, create incentives for our staff to actively request for customers to leave Google reviews to present a truthful image of our business, actively monitor the mental health well-being of our staff in the face of the trolling attacks we were under and respond to all the fake Google trolls and go through the lengthy reporting process with Google”.[55]
[55]Exhibit P4 [18]
92It is not clear what he is referring to when he references “all the fake Google trolls”. In Mr Harris’ second affidavit he says that after the Ramaihi review there were 6 one-star reviews posted, all of which have been reported to Google as not being genuine.[56] Prior to the Ramaihi review there were two one-star reviews which were also reported as being non-genuine.[57] (Whether or not these were genuine or fake reviews was the subject of inconsistent evidence from the plaintiffs, but ultimately does not matter for the purposes of this hearing.)
[56]Exhibit P2 [6]
[57]Exhibit P2 [7]
93It is not clear how this evidence is relied on to prove serious harm. It might form part of a claim for pecuniary loss.
94Mr Salzmann says he believes he lost sales “due to customer uncertainty”’.[58] He says he has had a reduced number of customer referrals from his personal network.[59] He recalls conversations “generally” with customers questioning what the one star review was, but could not recall whether that happened before or after the media reports about the case.[60]
[58]Exhibit P4 [16]
[59]Exhibit P4 [21]
[60]T101, L1-8
95He says the harm to his reputation is particularly serious as he is young, at the beginning of his career and does not have the option of “giving up and walking away from this trade”.[61]
[61]Exhibit P4 [21]
96He reported the same financial loss as Mr Harris.[62]
[62]Exhibit P4 [24]
Dariusz Szymanski
97Mr Szymanski is a friend of the Harris’ and Mr Salzmann, and an employee of the first plaintiff. He worked for Micheli Jewellery from 2015 to 2019. He then left to do his own work.
98He says he heard about the Ramaihi review from one of his clients and then read it himself sometime between October and December 2021.[63]
[63]Affidavit of Dariusz Szymanski dated 2 November 2022 [5] (‘Exhibit P5’)
99He said he understood the review to be about one of Mr Harris, Ms Harris or Mr Salzmann because one of them was always involved with customer service.[64] Prior to the review he held a very high opinion of each of them.[65]
[64]Exhibit P5 [6]
[65]Exhibit P5 [7]
100After he read the review he felt very awkward knowing that they had overcharged clients and been rude to this person. He felt embarrassed as he still had a professional association with them.[66]
[66]Exhibit P5 [8]
101At around this time Ms Harris asked him to return to work for them. He said he was hesitant because of the Ramaihi review. He was not sure whether his business and personal values still aligned with the plainitiffs.[67] He says Mr and Ms Harris told him it was a fake review but he was not fully convinced because “it seemed a bit excessive for someone to lie on a Google review”.[68] Nevertheless because he had known them for many years he decided to give them the benefit of the doubt and returned to work with them.
[67]Exhibit P5 [9]
[68]Exhibit P5 [11]
102He said he paid more attention to their behaviour in the workplace to see if they were rude or overcharging customers. He satisfied himself there was no truth to the Ramaihi review. He says if there had been any truth he would not have kept working for them, as he would not want to risk his own reputation.[69] He says based on his own observations, each of Mr and Ms Harris and Mr Salzmann maintain excellent customer service and are fair and reasonable in their quotes and pricing.[70]
[69]Exhibit P5 [12]
[70]Exhibit P5 [13]
Legal Principles
103I note and adopt the comments of Judge Gibson in the decision of Zimmerman v Perkiss about the circumstances in which the serious harm element has been added to the tort of defamation.[71]
[71](Supra) [137]-[141]
104It is clear that the intention of the legislature was to raise the threshold of seriousness required to pursue a defamation claim.
105The construction of serious harm should take place in the context of the legislation as a whole. In Zimmerman v Perkiss, Gibson J noted, “Caution should be exercised not to define serious harm disjunctively for the reasons explained by Basten AJA in Rader v Haines]”.[72]
[72](Supra) [138]
106Other jurisdictions which have adopted a “serious harm” threshold may offer guidelines in how to approach the test but should be treated with some caution.
107“Serious harm” is not a new term and is widely used in legislation. It has an ordinary English meaning which depends on and is interpreted within its own context. The test must be carefully and consistently applied. Tests for serious harm in other statutes are not necessarily relevant to the test as it applies to defamation claims, but will require “the same careful delineation of its elements, in terms of facts and law, as would be expected in other legislation where such a test is posed”.[73] As Gibson J notes:
“It should not be a case of “business as usual” with defamation claims being indulgently waved through on the basis of an asserted “serious” imputation and/or a large audience being sufficient to establish what was intended to be a test of the magnitude identified by Brereton J in Rader v Haines.”[74]
[73]Zimmerman v Perkiss (Supra) [141]
[74](Supra) [141]
108From Rader v Haines, the following principles can be distilled:[75]
(a) Serious harm sits on the spectrum above “substantial” but below “grave”. Importantly there can be harm which, though substantial, does not reach the level of serious harm.
(b) The tendency of the words themselves to cause harm is a factor to be considered.
(c) Even where words amount to a grave allegation against a plaintiff, more than a ‘mere tendency’ of the words is required to establish the element. Special emphasis is placed on the circumstances and extent of publication.
(d) Serious harm should not be conflated with hurt to feelings, however distraught the plaintiff may be as a result of the publications.
(e) There may be serious harm without permanent harm.
(f) The extent of publication, including the grapevine effect, is a factor to be considered in assessing serious harm, as is the likelihood that the publication will come to the notice of other people.
[75](Supra) [28]
Application of the serious harm test to the facts of this case
109The plaintiffs concede that the inherent tendency of the words used in the Ramaihi would not necessarily tend to cause harm. However they submit that an examination of all the circumstances of the publication demonstrate why, in this instance, they did cause serious harm.
110They say that, in the high-end jewellery business in which they operate, maintaining a good reputation as persons who deliver fair pricing and good customer service is acutely important. An attack on these very important aspects of their reputations is therefore serious.
111Further, even a single negative Google review can have a devastating effect on the reputation of a high-end jeweller because of the nature of the industry, being high-value and low turnover, and the discerning customer base.
112The defendant submits the evidence does not rise to the required level. Much of the affidavit material made broad assertions of harm to reputation without more.
113I accept the proposition that a single review could cause serious harm. This may be especially so where the business involves the sale of high value goods and where customers are especially concerned with pricing. I accept that, when comparing two businesses, a business with a negative review might be passed over for a business without such a review.
114It is necessary to say something about the nature of Google reviews, and the context and forum in which they are published. Google reviews require no verification that the person leaving the review has any relationship with the business being reviewed. Any member of the public can leave a Google review for any purpose. When a business signs up for a Google business page, it presumably hopes that happy customers will leave positive reviews but understands this carries with it the risk that unhappy customers might leave negative reviews. The risk of negative reviews can be partially managed by ensuring customers are happy and have nothing to complain about or, as the plaintiffs attest, contacting those who have left negative reviews to address their concerns. So if a person who is not a customer leaves a negative review, the business understandably feels it has no way to control that risk and no way to deal with it. This results in an injustice to the business or person being negatively reviewed and is one of the many unpleasant side effects of the digital space in which we now live. There is little a business can do to protect itself from unwarranted attacks, brought for ulterior motives such as the plaintiffs allege occurred in this case.
115I understand that the plaintiffs in this case feel particularly aggrieved because they believe the review posted was fake, and motivated solely by malice. However this is not a factor in assessing whether there has been serious harm. The legislation does not carve out an exception to the requirement to establish serious harm for plaintiffs where the publication was motivated by malice.
116What is necessary is a careful examination of the evidence to assess whether the plaintiffs have objectively established serious harm to each of their reputations.
117I have already found that I cannot reach a conclusion about the extent of publication. I am satisfied that it was to more than a single person, or a handful of people, given the evidence as to various members of the public raising the review in conversation with the plaintiffs. However even publication to a large audience is insufficient to establish serious harm without more.
118There is no evidence of any financial loss to the business, and therefore I cannot draw an inference from this as to damage to reputation.
119Mr Harris did not rely on the deterioration in his relationship with his business partners as evidence of serious harm. Had he sought to do so I would not have accepted that evidence. As there is also no evidence of financial loss, Mr Harris has not established serious harm to reputation.
120There was specific evidence of a friend and customer, Ms Maria Guiarusso, raising the review with Ms Harris. Ms Guiarusso remains a friend of Ms Harris’ so it is not clear that there was any harm caused to Ms Harris’ reputation. This does demonstrate some grapevine effect.
121There is no evidence that the loss of custom from the Guilamino family was caused by the review. There is simply insufficient evidence for this inference to be drawn.
122I am not persuaded that the conversation Mr Salzmann had with Mr McIntyre demonstrates any harm to his reputation. It appears to have been a conversation about the potential for Google reviews to cause such harm.
123The concerns Mr Szymanski had did not lasted very long. The review was published in October 2021. He had returned to work for the plaintiffs by January 2022. Even though he may have harboured some residual doubts, they were not sufficient for him to turn down the job. As would be expected, he put his own personal experience and observations of the plaintiffs above the opinions (genuine or otherwise) of a stranger on the internet, in assessing the plaintiffs. Evidence that one person harboured some concerns, awkwardness and embarrassment for a short period does not amount to the level of “seriousness” envisaged by the test.
124Much of the rest of the evidence relied on by the plaintiffs was in the form of broad assertions without any particulars. Mr Salzmann says he has noticed a reduction in online queries for products after the Ramaihi review. It would be a relatively simple matter to set out, at least, the alleged reduction. As the evidence stands I do not know if the reduction was large or small.
125Similarly, a broad assertion that the Ramaihi review has ‘killed’ Ms Harris’ conversion rate, or caused Mr Salzmann to lose sales is insufficient. What was Ms Harris’ conversion rate pre and post the review? What were the sales Mr Salzmann lost? There is no information upon which I can assess the degree of the claimed loss and therefore no evidence to draw inferences about the seriousness of harm to reputation that was conducive of such a loss. In any event the evidence is insufficient for me to draw an inference that the Ramaihi review was the cause of the lost sales and reduction in conversion rate, and therefore serious harm.
126This is the type of case the legislation was intended to address – a single Google review on the internet by an individual. As noted above, this does not mean a single Google review can never cause serious harm, but the burden rests on the plaintiffs to make out the element.
127On the evidence, it is clear the plaintiffs have suffered distress and hurt. They have most likely suffered some harm. I accept that in a business such as theirs, reputation is very important and any negative reviews are likely to cause a degree of harm.
128However they have not discharged their burden to establish that the harm they have suffered is more than substantial and rises to the level of serious.
129Accordingly, the second, third and fourth plaintiffs have not established serious harm to reputation pursuant to s 10A of the Defamation Act 2005. Their claims against the defendant are dismissed.
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