Huang v Zhi
[2017] VCC 1990
•22 December 2017 (Revised)
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
DEFAMATION LIST
Case No. CI-17-00018
| WENFENG HUANG | Plaintiff |
| v | |
| DA CHENG ZHI | First Defendant |
| and | |
| MURRAY VALLEY MEAT CO PTY LIMITED | Second Defendant |
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JUDGE: | HIS HONOUR JUDGE SMITH | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 and 17 November 2017 | |
DATE OF JUDGMENT: | 22 December 2017 (Revised) | |
CASE MAY BE CITED AS: | Huang v Zhi & Anor | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 1990 | |
REASONS FOR JUDGMENT
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Subject: DEFAMATION
Catchwords: Judgment in default of appearance – assessment of damages
Legislation Cited: County Court Civil Procedure Rules 2008, Rule 51.02(3); Defamation Act 2005
Cases Cited:Woolcott v Seeger [2010] WASC 19; Lemaire v Smith’s Newspapers Limited (1927) 28 SR (NSW) 161; Royal Society for the Protection of Cruelty to Animals, New South Wales v Davies [2011] NSWSC 1445; Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44; Belbin v Lower Murray Urban and Rural Water Corp [2012] VSC 535; Lower Murray Urban and Rural Water Corp v Di Masi; Lower Murray Urban and Rural Water Corp v Belbin; Lower Murray Urban and Rural Water Corp v Marciano [2014] VSCA 104; Cerutti and Anor v Crestside Pty Ltd and Anor [2014] QCA 33; Lew v Coles Myer Ltd & Anor [2002] VSC 535; Baxter v Obacelo Pty Ltd [2001] HCA 66
Judgment: Damages to the plaintiff assessed in the sum of $220,000 inclusive of $20,000 aggravated damages.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Garrett | United Associates Barristers & Solicitors |
| For the First Defendant | No appearance | - |
| For the Second Defendant | No appearance | - |
HIS HONOUR:
1 In this proceeding, commenced by Writ on 4 January 2017, the plaintiff claims damages, including aggravated damages, in respect of four publications which the defendant alleges were made by the first defendant, Da Cheng Zhi (“Zhi”) of and concerning him. He alleges that each of the publications is defamatory of him and seeks damages, including aggravated damages, in respect of them.
2 On 17 July 2017, Consent Orders were made by this Court dismissing the proceeding as against the second defendant. The proceeding continued against Zhi.
3 Zhi has not filed an appearance in this proceeding. Interlocutory judgment was entered against him in favour of the plaintiff on 7 July 2017 for damages to be assessed by this Court.
4 I am satisfied that Zhi has been properly served with the Writ and Statement of Claim in this proceeding and properly notified that damages were to be assessed on 16 November 2017 as required by Rule 51.02(3) of the County Court Civil Procedure Rules 2008.
5 There was no appearance by Zhi at the assessment hearing. I determined to proceed with the assessment of damages in his absence.
6 In a defamation proceeding such as this, where there has been a failure by a defendant to file an appearance, the plaintiff must, nevertheless, persuade the Court that the alleged imputations as set out in any statement of claim are capable of arising from the pleaded publications. If so, the defendant will be taken to have admitted that the publications bear those imputations.[1]
[1]Woolcott v Seeger [2010] WASC 19 at paragraph [10]
7 The first publication referred to in paragraph 9 of the plaintiff’s Statement of Claim was not pressed by Counsel for the plaintiff at the hearing of the assessment of damages, and I shall take it as being effectively withdrawn.
8 The second publication alleged in paragraph 10 of the Statement of Claim relates to an email sent on 22 November 2016 by Zhi to Jonathan Bayes, the export manager of Thomas Foods (“the second email”). The full text of the email was set out at paragraph 10 of the plaintiff’s Statement of Claim and a copy of it is annexed to the Statement of Claim and marked “B”. I shall not set out the full contents of the email here. It suffices to say that it contained the following statements:
“Henry is a crook full stop. …
Henry is offending every countries law by evading tax and smuggling!”
9 I am satisfied that in its natural and ordinary meaning, the second email was defamatory of the plaintiff and was meant, and understood to mean, that the plaintiff:
(a) is a criminal;
(b) is corrupt;
(c)is contravening the laws of Australia and of other countries by evading tax;
(d) is contravening the laws of Australia and of other countries by smuggling;
(e)is misleading Thomas Foods and its export manager as to the nature of the relationship between the plaintiff’s company, JOC Australia Pty Ltd (JOC Australia) and JOC China;
(f)presents a risk to Thomas Foods, in that if Thomas Foods continues to deal with the plaintiff or the plaintiff’s company, JOC Australia, then Thomas Foods, is likely to be investigated by regulatory authorities in China in relation to smuggling.
10 On 28 November 2016, Zhi sent an email to the plaintiff’s solicitors, to Tim Sullivan of Sanger Australia and to Peter Lightfoot, the sales manager of Cedar Meats (“the third email”). The third email is set out in paragraph 11 of the Statement of Claim and a copy of it is annexed to the Statement of Claim and marked “C”. It states, in part:
“… I have informed abc four corners about Mr Huang posing to be Joc China to trick the poor aussie butchers like 533 plant.
…
I will have my lawyer goes to ATO Melbourne office to re complaint about Mr Huang not disclosing his overseas income … .”
(sic).
11 I am satisfied, that in its natural and ordinary meaning, the third email was defamatory of the plaintiff and was meant, and understood to mean, that the plaintiff is:
(a)misrepresenting his relationship with JOC China to persons with whom he and/or JOC Australia do business;
(b)evading tax by failing to declare his overseas income to the Australian Taxation Office; and
(c)engaging in crime.
12 On and after 14 November 2016, Zhi sent a series of messages on an internet-based messaging platform known as “WeChat” (“the WeChat messages”) to a group of at least sixteen persons (“the WeChat recipients”). Extracts of the Wechat messages are annexed to the Statement of Claim and marked “D”.
13 I am satisfied that in their natural and ordinary meaning, the WeChat messages were defamatory of the plaintiff and were meant, and understood to mean, that the plaintiff:
(a)is being investigated by regulatory authorities in China for smuggling activities and/or for misstating prices of goods on JOC Australia Pty Ltd invoices;
(b)has sources of money that are highly suspicious;
(c)engages in transactions which are highly suspicious;
(d)is contravening the laws of Australia by under reporting his income;
(e)is at risk of going to jail; and
(f)is engaging in other illegal activities.
14 The plaintiff tendered a USB and a disk of a video, which was referred to in paragraph 15 of the Plaintiff’s Statement of Claim as “the video”. The plaintiff alleged that the video was defamatory of him. Having viewed the video in Court, and since, I do not consider that it is defamatory of the plaintiff. It follows that I do not consider that the plaintiff is entitled to an award of damages in relation to the video.
15 The publications referred to and which I have found to have been defamatory of the plaintiff were published to persons directly or indirectly connected with the plaintiff’s business, JOC Australia, a business which purchased meat products in Australia and exported those products to China. Those meat products were supplied by a limited number of suppliers. In the event that some or all of those suppliers accepted the defamatory publications as being true, it was possible, if not likely, that they would cease to do business with the plaintiff as a consequence of the defamatory imputations. Further, I accept that the plaintiff, through his company, JOC Australia, required accreditation from the Chinese government in order to export meat products to China. Loss of that accreditation could mean that he would be unable to continue his export business.
16 Having found that the defamatory publications gave rise to the alleged imputations to which I have referred, Zhi, in having failed to file an appearance in the proceeding, is taken to have admitted that the publications do, in fact, bear those imputations.
Quantum of damages
17 I note that Zhi has made no offer to make amends to the plaintiff pursuant to s13 of the Defamation Act 2005 (“the Act”).
18 In assessing damages, the Court is entitled to consider the defendant’s conduct after the date of the publications sued upon, and up to the date of judgment.[2]
[2]Lemaire v Smith’s Newspapers Limited (1927) 28 SR (NSW) 161 at 165
19 After the date of the publications which I have found to have been defamatory of the plaintiff, Zhi sent numerous emails to the plaintiff’s solicitors which, in my opinion, conveyed threats to make further defamatory statements concerning the plaintiff if he did not pay money to other non parties. Some of these emails also contained further defamatory statements concerning the plaintiff:
(a)an email to employees of Murray Valley Meat Co Pty Limited (“MVMC”) on 18 September 2017 stating that the plaintiff engages in “dirty activities tricking innocent people to fall into his traps”;[3]
[3]Plaintiff’s affidavit, exhibit “HH:1” at page 39
(b)an email to the same employees of MVMCC on 18 September 2017 describing the plaintiff as “dumb greedy Henry” and stating that he was “a crook and a shark: pretending to be JOC, pretending he runs the Chinese government CNCA, trying to blackmail people and trying to rip people off”;[4]
[4]Plaintiff’s affidavit, exhibit “HH:1” at page 40
(c)an email to Woodward of MVMC on 26 September 2017 describing the plaintiff of having “lied to everyone” and describing him as a “Conman” and a “shark”, who engaged “deceiving actions and … blackmailing tactics”;[5]
[5]Plaintiff’s affidavit, exhibit “HH:1” at pages 41-44
(d)an email to William Zhang and Nancy Han on 26 September 2017, stating that:
“Henry’s mistake is: he believed to be smart is better than to be honest and honourable … try to lie and try to be smart will eventually get you(SIC) !”;[6]
(e)an email to Woodward on 14 November 2017 stating that he would “expose Henry’s tricks”;[7]
(f)a message which appears to have been sent to a person at JOC China on 14 November 2017 stating, of the plaintiff, “this person is really poor quality and rascally!”[8]
(g)an email sent to four senior offices of MVM and to Nancy Han of Li Yuan Foods on 15 November 2017 describing the plaintiff as a “dishonest person” and stating that Zhi would “further expose Henry’s tricks”;
(h)an email sent to four senior offices of MVM on 15 November 2017 reporting to list the plaintiff’s “wrongdoing”, including that he “misleads public”, bribes, fails to report his income, and profits from harming the China and Australia Quarantine Certificating System.
[6]Plaintiff’s affidavit, exhibit “HH:1” at page 54
[7]Affidavit of Mr Yuyuan Zhang sworn 15 November 2017, exhibit “WZ:2” at pages 4-5
[8]Affidavit of Mr Yuyuan Zhang sworn 15 November 2017, exhibit “WZ:2” at pages 17-18
20 Further, exhibit “WZ:6” to an affidavit sworn by Yuyang Zhang on 1 December 2017 to various named individuals who appear to be associated, one way or another, with the plaintiff’s meat exportation business, or to his solicitor, or to this Court. It is not necessary for me to set these out in full here. It suffices to say that twenty-two post writ emails all contain comments concerning the plaintiff and alleging misconduct, breach of the law, and/or dishonesty on his part.
21 I accept that the commencement by the plaintiff of this proceeding against Zhi has not resulted in any lessening of these defamatory publications. Rather, they appear to amount to acts of retaliation or reprisal against the plaintiff for commencing this proceeding. I accept that such conduct is likely to have aggravated the harm caused by the publications the subject of this proceeding.
22 On 25 November 2016, Zhi sent a further message to a number of persons, including the plaintiff’s solicitor, which purported to be an “apology”. It reads as follows:
“Dear all, it is my sincere apology to Henry for threatening him with tax evasion and smuggling accusations which I believe I have evidence. As I said as long as Hernry pay his debt, I will sease all actions and embrace him. I also promise to help him to make 560,000 dollars to assist him to recover from the stress caused. No hard feelings at all. In the end, we are brothers.
Regards
Eddie Zhi.”[9]
(sic)
[9]Plaintiff’s affidavit, exhibit “HH:1” at page 30
23 I consider this not to have been a genuine apology at all. It is a statement which indicates that Zhi has evidence of the plaintiff’s tax evasion and smuggling.
Damages
24 The three purposes of an award for damages in defamation are:
(a) consolation for the plaintiff’s personal distress and hurt;
(b) reparation for the plaintiff’s personal and business reputation; and
(c) vindication of the plaintiff’s reputation.[10]
[10]Royal Society for the Protection of Cruelty to Animals, New South Wales v Davies [2011] NSWSC 1445 at paragraph [45]
25 The plaintiff’s evidence was that he had experienced personal distress and hurt at the publications, which caused him concern and upset. He was, understandably, concerned that the publications may have damaged business relationships of his, and his company. The recipients of the messages included representatives of significant suppliers of meat products to his business, including Jiansgu Overseas Corporation in China.
26 I accept, despite limited evidence, that the publications have caused significant damage to the plaintiff’s reputation.
27 The High Court has said:
“… the minimum necessary to signal to the public the vindication of the appellant’s reputation. ‘The gravity of the libel, the social standing of the parties and the availability of alternative remedies’ are all relevant to assessing the quantum of damages necessary to vindicate the appellant’.”[11]
[11]Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 at 61 per Mason CJ, Deane J, Dawson J and Gaudron J; quoting from Fleming, The Law of Torts , 8th ed. (1992), at 595
28 I am of the view that as a consequence of these publications, there is likely to have been a “grapevine effect”. This concept was described by Kaye J in the Supreme Court in the following terms.
“The ‘grapevine’ phenomenon, referred to in those cases, is no more than the realistic recognition by the court that, by the ordinary function of human nature, the dissemination of defamatory material is rarely confined to those to whom the matter is immediately published … the law recognises that, in an ordinary society, members of the community talk to each other about matters of public interest and concern. In that way, it is recognised and understood that the ‘poison’ of a liable may spread well beyond the confines of the person to whom it was immediately published.”[12]
[12]Belbin v Lower Murray Urban and Rural Water Corp [2012] VSC 535
29 Note, this decision was upheld by the Court of Appeal.[13]
[13]Lower Murray Urban and Rural Water Corp v Di Masi; Lower Murray Urban and Rural Water Corp v Belbin; Lower Murray Urban and Rural Water Corp v Marciano [2014] VSCA 104 at 108-112
30 The plaintiff’s counsel has submitted that this is a case where aggravated compensatory damages should be awarded as the case involved a defendant’s conduct being improper, unjustifiable, and/or lacking in bona fides. I accept that an award of aggravated damages can be based on a defendant’s conduct from the date of the publications sued upon up to the date of judgment.[14]
[14]Cerutti and Anor v Crestside Pty Ltd and Anor [2014] QCA 33 at paragraph [37]
31 I accept that the publications sued upon indicate that Zhi published them for the improper purpose of attempting to pressure and intimidate the plaintiff into paying money to MVMC.
32 I accept Counsel’s submission that the insincere “apology” previously referred to is a further fact of justifying an award of aggravated damages.
33 The imputations of the publications in question are, on any view, serious. It is difficult to imagine more serious allegations against a businessman than that he is a conman, corrupt, a criminal and that he is dangerous to deal with. These publications were, in my view, likely to have been calculated to cause maximum damage to the plaintiff’s business reputation and to his business itself. They were sent to the plaintiff’s major customers. I accept that the publications did cause considerable stress to the plaintiff. Indeed, Zhi, in his “apology” seems to acknowledge that he would have suffered stress.
34 I take into account that Zhi has made no attempt to justify his publications or to defend this proceeding. His continued sending of emails defamatory of the plaintiff, virtually up until the eve of the hearing, is an indication of his outrageous and unrepentant behaviour.
35 Taking all of the evidence into account, it is my view that fair and reasonable damages providing fair consolation for the plaintiff’s personal distress, hurt, reparation for his personal and business reputation, and vindication of his reputation, is $200,000.
The First proceeding – CI-16-04865
36 During the course of the assessment hearing, it came to my attention that in October 2016, MVMC had commenced an earlier proceeding in this Court against JOC Australia claiming that it was indebted to it in relation to a contract for the sale of beef: proceeding number CI-16-16-04865 (“the first proceeding). The plaintiff in that first proceeding (MVMC), had claimed against JOC Australia a sum of USD369,958. As previously noted, JOC Australia is a company owned by the plaintiff in the current proceeding.
37 The first proceeding was settled on 26 June 2017. Terms of settlement were tendered in this assessment proceeding. The terms of settlement were entered into between MVMC, JOC Australia (the defendant in that proceeding) and also Wenfeng Huang (the current plaintiff).
38 The Deed of Settlement recited that:
(a)MVMC had commenced proceedings against JOC Australia seeking orders, inter alia, that JOC Australia pay it the sum of USD258,970.61 or the equivalent amount in Australian dollars, together with interest and costs;
(b)that in the current proceeding (CI-17-00018), Mr Huang had claimed damages against MVMC and Zhi in relation to the publication of allegedly defamatory material.
39 The Deed of Settlement provided that MVM, JOC Australia and Huang had agreed to settle the disputes, the subject of the first proceeding and the second proceeding, on the following terms including:
·JOC Australia shall pay the sum of USD159,000 to MVMC;
·Upon payment of the settlement sum being made, the parties would take steps to have the first proceeding dismissed and the second proceeding dismissed insofar as it related to MVMC;
·that JOC Australia, Mr Huang and MVMC released and forever discharged the other parties from and against any claim arising under the first proceeding or the second proceeding.
40 I was initially concerned that the settlement of the first proceeding for a sum considerably less than that claimed by MVMC against Mr Huang may have reflected, in effect, a payment of some damages by MVMC in respect of the defamatory publications the subject of the second proceeding. Had that been the case, it was my view that any damages awarded against Zhi in the current proceeding should take into account damages that the plaintiff may already have received in respect of the same defamatory publications.
41 Counsel for the plaintiff referred me to the High Court decision in Baxter v Obacelo Pty Ltd.[15] I accept that the question should be considered by reference to the objective evidence as to the terms of the settlement of the other proceeding and the conduct of the parties to it, rather than by subjective evidence of the parties’ intentions.
[15][2001] HCA 66 (“Baxter”)
42 Here, as in Baxter, the terms of settlement and the Deed of Release clearly showed that it was contemplated that the plaintiff would pursue his claim against Zhi, and that he was not accepting any sum in satisfaction of his loss and damage caused by the defamatory publications.
43 In Baxter, Gleeson CJ and Callinan J made it clear that the Court did not know why one party decided to settle with the other for a particular sum. They did not consider that this was their concern.
44 The recitals to the Deed of Settlement of the first proceeding included the following:
“E. Subsequent to commencement of the First Proceeding and Second Proceeding, JOC has provided valuable advice to MVMC and has assisted MVMC to obtain audit accreditation for the export of MVMC meat products to China.
F. In recognition of that advice and assistance, and to avoid further costs and uncertainty of litigation, the parties have agreed to settle the First Proceeding and the second proceeding on the terms set out herein.”[16]
[16]Exhibit “F”
45 In the circumstances, I consider that it is not open to me to infer that the Deed of Settlement reflects payment or an allowance for any compensation paid by MVMC to Mr Huang. Such a conclusion would, in my view, be pure speculation.
46 Accordingly, it is not appropriate to reduce the damages that I have found are fair and reasonable to be awarded against Zhi in the current proceeding by reason of the terms of settlement of the first proceeding.
Application for injunction
47 The plaintiff seeks a permanent injunction restraining Mr Zhi from further distributing the publications sued upon and from publishing any further material to the effect of the imputations alleged to arise from those publications.
48 On the evidence before me it appears clear that, unless restrained, Zhi will continue to publish similar imputations against the plaintiff.
49 Notwithstanding that it is unclear as to whether Zhi currently resides in Australia or out of the jurisdiction, I consider it appropriate that such an injunction should be granted. It appears clear upon the evidence before me that Zhi has failed to make any genuine apology for the relevant publications, and has continued to make similar defamatory publications after the commencement of this proceeding. He has made no attempt to defend the plaintiff’s claim in this proceeding or justify the publications. On the basis of his more recent correspondence, it is unlikely that he will cease such publications unless restrained from the Court from doing so. He appears to have a desire to repeatedly vent his comments concerning the plaintiff.
50 In all of the circumstances, I consider that injunctive relief of the sort sought by the plaintiff is appropriate. I shall hear counsel as to the appropriate form of such injunction.
Conclusion
51 There shall be an award of damages in the sum of $220,000 in favour of the plaintiff against the defendant, Da Cheng Zhi, which sum includes $20,000 by way of aggravated damages.
52 I shall hear submissions concerning the form of Orders and ancillary orders sought, including interest and costs.
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