Kaplan v Go Daddy Group Inc

[2006] NSWSC 250

CITATION:	Kaplan & Anor v Go Daddy Group Inc & Ors [2006] NSWSC 250
HEARING DATE(S):	21 March 2006
JUDGMENT DATE :	6 April 2006
JUDGMENT OF:	Simpson J
DECISION:	Application to strike out amended statement of claim refused.
CATCHWORDS:	defamation - internet publication - first plaintiff claims in defamation - second plaintiff claims in injurious falsehood - application for order that amended statement of claim be struck out - whether plaintiff required to plead whole of publication in which matter complained of appears - balance of what was on website now lost - capacity of imputations pleaded to defame plaintiff - form of imputations
CASES CITED:	Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107 Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 World Hosts Pty Ltd v Mirror Newspapers Ltd [1976] 1 NSWLR 712
PARTIES:	Adam Kaplan - 1st Plaintiff Huntermotive Pty Ltd trading as Hunter Holden - 2nd Plaintiff Trent Andrew English - 2nd Defendant
FILE NUMBER(S):	SC 20283/05
COUNSEL:	T Molomby SC - Plaintiffs DR Sibtain - 2nd Defendant
SOLICITORS:	Humphreyes & Feather - Plaintiffs Paul A Curtis & Co - 2nd Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

SIMPSON J

Thursday 6 April 2006

20283/05

Adam Kaplan & Anor v Go Daddy Group Inc & 2 Ors

JUDGMENT

1 HER HONOUR: By amended statement of claim, filed on 19 January 2006, the first plaintiff claims damages for defamation arising out of certain material alleged to have been published on the internet. The second plaintiff claims damages in injurious falsehood arising out of publication of the same material.

2 Initially, three defendants were named. However, it seems that the first and third named defendants are United States corporations and have not been served with originating process. I was advised that the plaintiffs do not intend to proceed against either. Only the second defendant is actively pursued by them.

3 The second defendant seeks an order that the amended statement of claim be struck out. The circumstances in which he does so require the outlining of certain background and history and are as follows.

4 Annexed to the amended statement of claim, in traditional manner, is the matter complained of, which contains the alleged defamatory publication. It is presented in two formats: there is what is plainly a printout of material downloaded from the internet, in a form that is familiar to the computer literate; and there a typescript of the same material.

5 The printout has a large headline, which reads:

“Hunter Holden Sucks”

which is followed by a smaller heading:

“Share your comments about Hunter Holden Automotive here”

Following this is, in bold print, a yet smaller heading, reading:

“Recent posts”

6 There is then a series of boxes, each with its own heading or title. The first may be used to illustrate the pattern that follows. I will attempt to reproduce the box and its contents.

Received 06/09/2005 02:07
Warranty issues
Read comments and add your own comments
Comments: 1 | view | add permalink

7 Subsequent boxes are headed:

“Adam Kaplan Owner of Hunter Holden Automotive Direct Contact Details”
“Management”
“Overcharging”
“Fraud”
“Car stolen”
“Fraud” [which appears to be a precise repetition of the box in which the earlier heading of “Fraud” is contained]

Only three of the boxes (as printed) contain comments. Under both boxes headed “Fraud” appears:

“People say that over charging on customer cars is rife at Hunter Holden”

Under the box headed “Car stolen” appears:

“Adam Kaplan, Director of Hunter Holden Automotive refuses to admit liability for the theft of motor vehicle stolen from St Leonards dealership.”

8 There then appears a final segment, headed:

“Comments for post”

Under this heading appears an initial and name, (“N Barnier”) the date 9 June 2005, and the time, 21:23. Thereafter the following appears:

“\&quot; I bought a certified used car from HUNTER HOLDEN at St Leonard’s. Upon picking it up, the finance department got my contract wrong 3 times. They advertised ‘0 worth of free accessories’ and never delivered, had no pin code for the radio, and generally had the worst after sales service I have ever experienced. After chasing around for the radio PIN myself, I have now found the radio is broken! Something I am sure they were well aware off (sic). <br/>
I have asked for the radio to be replaced, but have been told their only responsibility is to fix it, and that could take up to 3 weeks. Have I received an apology or any offer of just supplying a new radio?? NO. They are rude, arrogant and generally unpleasant people..\&quot; N Barnier, NSW – ”

Under that entry appear the words “Not happy”, the same date and the time of 01:55.

9 The plaintiffs allege that it was the second defendant who posted these comments.

10 The first plaintiff pleads that the material published conveyed five imputations defamatory of him. They are:

“(a) as owner and Director of Hunter Holden Automotive he engages in fraud by overcharging on customer cars;
(b) as owner and Director of Hunter Holden Automotive he refuses to admit his liability for theft of a motor vehicle;
(c) as owner and Director of Hunter Holden he runs a business which is incompetent;
(d) as owner and Director of Hunter Holden he runs a business whose staff are rude, arrogant and generally unpleasant;
(e) as owner and Director of Hunter Holden he runs a business which should be avoided.”

11 The second plaintiff sues on the same material. It brings its case in injurious falsehood.

12 On its face, all material was published on 9 June 2005.

13 On 17 June 2005 the plaintiffs filed a summons in the Equity Division of this Court, naming the same two United States companies and the present second defendant as defendants. They sought a variety of orders concerning the website on which the material appeared. It is unnecessary to go into the detail of those proceedings. On that day Hamilton J granted to the plaintiffs, ex-parte, injunctions restraining the second defendant by himself, his servants and agents, from maintaining the domain site or displaying the material contained in that domain or similar material on any internet site; he ordered that the second defendant instruct the first defendant to shut down the domain site forthwith.

14 On 24 June White J discharged that injunction but made a further order restraining the second defendant by himself, his servants and agents from maintaining the domain site or establishing or maintaining an internet website of the same or similar name, and from publishing false statements of or concerning the second plaintiff.

15 In affidavit evidence filed in those proceedings, which was subsequently reproduced and relied upon in these proceedings, the first plaintiff deposed that he had learned of the website on 17 June 2005, when it was drawn to his attention by an employee, and that he had that day viewed the site. He continued to review the site, and, over the next several hours, observed that comments were added.

16 The second defendant also filed an affidavit in the Equity proceedings. He said that he had received the notice of those proceedings at 7.30 pm on the same evening. He immediately removed the comments that he had posted, and sent an email to “Go Daddy.com” requesting that the site be deactivated.

17 Although there was no direct evidence to this effect, both parties proceeded on the basis that the site was, with some promptitude, “deactivated” or “decommissioned”. Both parties also proceeded on the basis that any material that had appeared on the site that had not been downloaded by the plaintiffs is now irretrievable.

18 The second defendant’s application to strike out the amended statement of claim is based upon the principle, variously expressed, including in World Hosts Pty Ltd v Mirror Newspapers Ltd [1976] 1 NSWLR 712, that a plaintiff bringing defamation proceedings is required to plead the whole of the publication in which the matter complained of appears, and is not permitted selectively to extract those parts that support the claim and relegate to the sidelines those that do not. In World Hosts Glass JA said:

“I am satisfied that a general rule exists which stipulates that qualifying material appearing in the same publication cannot be disregarded.”

19 However, his Honour did not postulate this as an absolute rule and recognised that there might be room for argument in particular cases. That there may be argument about what properly constitutes a publication is apparent from the decision of the Court of Appeal in Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107.

20 Counsel for the second defendant sought to demonstrate that the same principle applies to the tort of injurious falsehood: see Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 at 417.

21 In my opinion there is no doubt that the general principle is correct, but it is not absolute and must accommodate the circumstances of any particular case.

22 On behalf of the second defendant it was argued that the evidence shows, or permits an inference, that, as at June 2005, the website contained more material than has been downloaded by the plaintiffs, and that the additional material might have had a bearing on the defamatory (or otherwise) nature of the material on which the pleading is based. So much was conceded on behalf of the plaintiffs. In the ordinary course, if this could be seen to be so, the plaintiffs would be required also to plead the additional material. Here, as I have said, the parties proceeded on a common assumption that the balance of what was, in June, on the website has been lost forever. Fairness to the second defendant dictates (on his submission) that since he cannot have the benefit of what might have been ameliorating material, the plaintiffs ought not to be allowed to pursue their actions. A subsidiary argument, possibly put in respect of discretionary factors, was that the first plaintiff knew, as early as 17 June 2005 (when he downloaded the material and commenced the Equity proceedings) that the material would or could be relevant, but that he did nothing to preserve it. He ought not now to be allowed to take advantage of the absence of the other material.

23 Senior counsel who appeared for the plaintiffs sought to turn the same argument on the second defendant, arguing that he also has been aware since June 2005 of the potential relevance of the material, and that he had an equal opportunity to preserve it. He also argued that, if there had been any material on the website in June 2005 that had the effect for which the second defendant now contends, he would have raised it in the Equity Division proceedings.

24 The latter argument is of some substance, but there is, in my opinion, yet another answer to the second defendant’s contention. The plaintiffs sue the second defendant only upon the material which they allege he posted on the site. Whether there was material posted by others is not known; but, even if there were, it does not appear to be alleged that the second defendant bears responsibility for it. It appears to have been implicit in the argument that even material posted by others might have been relevant to assessing the defamatory effect (if any) of what the defendant is alleged to have published. That is probably correct. The context, even excluding material for which the defendant is not responsible, may affect the defamatory impact of that for which he was responsible. The second defendant is in the best position to know whether he published any material which may have altered, by ameliorating, the effect of what he is alleged to have published. He is not necessarily taken to have known whether there was other material which he had not posted.

25 In any event, no case was cited as authority for the proposition that, where it is not possible to plead any additional materials, the plaintiff ought to be locked out forever. There are less drastic ways of achieving fairness, such as directions to the jury (if the evidence reasonably permits such an inference) that some potentially relevant material is missing. I am satisfied that the second defendant has not made out his entitlement to relief in this respect. I refuse to strike out the amended statement of claim.

26 Other matters were raised, of which only three need now to be resolved. These concerned three of the imputations pleaded. On behalf of the second defendant it was argued that imputations (b), (d) and (e) are incapable of defaming the first plaintiff. These are the imputations which read:

“(b) as owner and Director of Hunter Holden Automotive [the first plaintiff] refuses to admit his liability for theft of a motor vehicle;”
“(d) as owner and Director of Hunter Holden [the first plaintiff] runs a business whose staff are rude, arrogant and generally unpleasant;”

“(e) as owner and Director of Hunter Holden [the first plaintiff] runs a business which should be avoided.”

27 The argument put in relation to imputation (b) was that the assertion that an individual refuses to admit liability for theft of a motor vehicle is not capable of conveying any imputation defamatory of that person because it is within the right of any individual to refuse to admit liability, and, indeed, there is no assertion that he wrongfully so refused. As a matter of logic, that is undoubtedly correct. However, it is a well-established principle that the ordinary reasonable reader is capable of a certain amount of loose thinking. The imputation as framed has the flavour of a wrongful refusal to make an admission of liability and that, in my opinion, is how the ordinary reasonable reader might well interpret it. The context in which it appears is to be taken into account. The website opens with the words “Hunter Holden Sucks”; and invites comments; it would not reasonably be thought by a jury that a report that the plaintiff refused to admit liability was merely anodyne; there would be no point in posting such a comment. The word “refuses” is also loaded; if the comment were merely intended to represent a first statement that the plaintiff exercised a right not to admit liability, a word such as “declined” might have been employed. If it is established that the imputation is conveyed, then, in my opinion, it is capable of being defamatory. In any event, it appears that the first plaintiff is amenable to redrafting the imputation to accommodate the second defendant’s criticism. I do not propose to interfere in this imputation.

28 It was also argued that imputation (d) is capable of defaming the first plaintiff because, it was said, it carries an accusation against his staff, but not against him. Again, in my opinion, this cannot be accepted. The owner and director of a business is ultimately responsible for the staff of that business and will carry the odium for any unacceptable behaviour on their part whilst acting in their capacity as employees. This imputation is capable of defaming the first plaintiff.

29 Finally, it was argued that imputation (e) is bad in form because of the use of the words “should be avoided” which, it was contended, are rhetorical in that the imputation does not explain why the business should be avoided.

30 In my opinion it is not necessary that it do so. It is sufficient to assert that the first plaintiff runs such a business. I do not think the words are rhetorical. They do not create any difficulties in interpretation.

31 Criticisms were also made of the injurious falsehood claim but these are the subject of additional particularisation by the second plaintiff and do not require further resolution.

32 I decline to make any orders with respect to the amended statement of claim.

**********