Kazal v Thunder Studios Inc (California) - [2023] FCAFC 174

FEDERAL COURT OF AUSTRALIA
Kazal v Thunder Studios Inc (California) [2023] FCAFC 174

Appeal from:
Thunder Studios Inc (California) v Kazal (No 5) [2017] FCA 1572

Thunder Studios Inc (California) v Kazal (No 7) [2018] FCA 996

Thunder Studios Inc (California) v Kazal (No 9) [2020] FCA 846

Thunder Studios Inc (California) v Kazal (No 10) [2020] FCA 16

Thunder Studios Inc (California) v Kazal (No 12) [2022] FCA 110

File number(s): NSD 276 of 2022

Judgment of: WIGNEY, WHEELAHAN AND ABRAHAM JJ

Date of judgment: 3 November 2023

Catchwords:
PRACTICE AND PROCEDURE — appeal and new trial – apprehended bias – where some time prior to trial the primary judge found the second appellant guilty of contempt of court and sentenced him to a term of imprisonment – where before trial the appellants made an application to the judge that he disqualify himself from further hearing the proceeding on the ground of apprehended bias – where the primary judge refused to disqualify himself – no application by the appellants for leave to appeal at the time – not reasonable for the appellants to save up apprehended bias point as a ground of appeal from the primary judge’s final orders – point given up by the appellants.

PRACTICE AND PROCEDURE — appeal and new trial – apprehended bias – where the primary judge made findings in the final judgment adverse to the appellants and beneficial to the respondents – where the appellants appealed on the ground that the conduct of the trial and the primary judge’s findings disclosed a reasonable apprehension of bias – no apprehended bias established.

PRACTICE AND PROCEDURE — appeal – where the first appellant failed to comply with orders to provide verified answers to interrogatories – where against that background, the primary judge made a self-executing order that the first appellant’s defence be struck out if he did not provide verified answers to interrogatories by 15 September 2017 – where the first appellant failed to comply with that order – where the primary judge refused an application to extend time to comply with the self-executing order – interlocutory application for leave to appeal interlocutory orders dismissed – whether appellate jurisdiction of the Court exhausted – whether decision to refuse extension of time affected the final result – whether House v The King errors affected the judge’s refusal to extend time – no error shown.

STATUTORY INTERPRETATION – practice and procedure – where prior to trial an interlocutory application to stay the hearing of the proceeding was made to the primary judge on the ground that other proceedings in the docket of another judge of the Court gave rise to a risk of inconsistent findings – where neither appellant had a defence on foot – where the primary judge refused the interlocutory application, inter alia, because there was no substantive risk of conflicting judgments – no error by the primary judge in reaching that conclusion – where the primary judge concluded on the interlocutory application that r 16.07(2) of the Federal Court Rules 2011 (Cth) gave rise to deemed admissions of allegations in a statement of claim where no defence was on foot – primary judge’s construction of r 16.07(2) in error – previous first instance decisions should not be followed – not material to the disposition of the interlocutory application – orders on interlocutory application did not affect the final result – point not taken at trial – no reliance by trial judge on r 16.07(2) in making findings of fact at trial – no material error shown.

DEFAMATION — imputation – where the respondents alleged defamation by the appellants by the publication of matters on the internet – primary judge found that the first matter conveyed a meaning and representation that doing business with the respondents ran the risk of physical injury – challenge to imputation on appeal – no error by the primary judge.

DEFAMATION — excluded corporation – where the pleaded case of the first respondent was that it ceased to be an “excluded corporation” within the meaning of s 9(2)(b) of Defamation Act 2005 (NSW) on 11 October 2013 – where the appellants alleged that the primary judge erred in failing to find that the first respondent ceased to be an “excluded corporation” by that date and therefore erred in the assessment of damages for defamation of the first respondent – the primary judge erred as alleged – however the same conduct constituted a breach of s 18 of the Australian Consumer Law (ACL) and the same award of damages for such contravention of ACL was not limited by whether the first respondent was an “excluded corporation” – therefore the primary judge’s error was not material.

CONSUMER LAW — appeal – where the respondents alleged contraventions of s 18 ACL by the appellants in relation to matter published on the internet – where the primary judge found that the nature of the publications was to induce readers to click on hyperlinks to divert them to a website and its articles for the purpose of warning readers against engaging commercially with the respondents – where the primary judge found this to be misleading and deceptive conduct “in trade or commerce” within the meaning of s 18 of the ACL – where the appellants appealed on the ground that the primary judge erred in finding impugned conduct occurred “in trade or commerce” – the impugned conduct arose out of commercial disputation and was intended to have commercial effects in the way found by the primary judge – no error established.

PRIVATE INTERNATIONAL LAW — damages – where the primary judge found that the second appellant engaged in, or sanctioned, conduct in the United States that aggravated damage to the respondents – where that conduct had been found by the United States Court of Appeals for the Ninth Circuit to be constitutionally-protected under the First Amendment to the United States Constitution for the purposes of liability for the tort of stalking under the laws of California – where the appellants appealed on the ground that the Court of Appeals’ decision gave rise to an issue estoppel – no submission to the primary judge that an issue estoppel arose – in any event no issue estoppel established – false issue – conduct in aggravation of damage as a result of a tort does not itself have to be unlawful.

DAMAGES — defamation – where appellants appealed on the ground that the assessments of damages were excessive on the basis of various specific errors – where the primary judge made some errors but not others – where the only order sought by respondents was that a new trial be ordered – where the powers of the Full Court in exercise of its appellate jurisdiction under s 28 of the Federal Court of Australia Act 1976 (Cth) are extensive and include the power to reassess damages – where the errors of the primary judge were minor in broad context – where the Full Court would assess damages in sums no less that those assessed by the primary judge – primary judge’s awards not excessive.

EVIDENCE — appeal – where no defences on foot – where the appellants sought to cross-examine the second respondent on matters said to go to mitigation of damage in reliance on Burstein v Times Newspapers Ltd [2001] 1 WLR 579 – cross examination permitted on some matters but not others – no error by primary judge.

Legislation:
Competition and Consumer Act 2010 (Cth), ss 6(3), 131; Sch 2, ss 18, 232, 236, 237

Copyright Act 1968 (Cth), s 196

Evidence Act 1995 (Cth), ss 91, 174, 175

Federal Court of Australia Act 1976 (Cth), ss 24, 25, 28, 37M, 37P; Part VB

Legislation Act 2003 (Cth), s 15G(4)

Legislative Instruments Act 2003 (Cth), s 26 (as previously in force)

Trade Practices Act 1974 (Cth) (as previously in force), ss 52, 82

Federal Court Rules 2011 (Cth), rr 1.39, 5.21, 5.22, 5.23, 16.03, 16.07, 16.08, 16.11, 39.04, 42.22

Federal Court Rules 1979 (Cth) (as previously in force), O 10 rr 7 and 8, O 11 r 13, O 35A

Crimes Act 1958 (Vic), s 17

Defamation Act 2005 (NSW), ss 9, 36

Supreme Court Act 1970 (NSW), s 94

Chapter 1 of the Rules of the Supreme Court (Vic) (as previously in force), O 19 r 13

Uniform Civil Procedure Rules 2005 (NSW), r 14.26

Uniform Civil Rules 2020 (SA), r 67.6(6)

Rules of the Supreme Court of 1883 (England and Wales), O 19 r 13, O 27 r 11, O 36 r 37

Rules of the Supreme Court 1965 (England and Wales), O 18 r 14

California Civil Code, § 1708.7

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Australian Competition and Consumer Commission v Alice Car & Truck Rentals Pty Ltd [1997] FCA 920
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Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 794; 160 FCR 321
Australian Consolidated Press v Driscoll (1988) Aust Torts Reports ¶80–175
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Flamingo Park v Dolly Dolly (1986) 6 IPR 431
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Jiangyin Yinying Goods and Materials Trade Co. Ltd v Australia Victoria Capital Pty Ltd [2012] FCA 274
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Konica Minolta Business Solutions Australia Pty Ltd v Vongkeneta [2013] NSWSC 486
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Kumova v Davison (No 2) [2023] FCA 1
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Division: General Division

Registry: New South Wales

National Practice Area: Other Federal Jurisdiction

Number of paragraphs: 425

Date of hearing: 25-26 August 2022

Counsel for the Appellants: Ms G L Schoff QC
Ms H Jager

Solicitor for the Appellants: HWL Ebsworth Lawyers

Counsel for the Respondents: Mr P Gray SC
Mr M A Polden

Solicitor for the Respondents: Russell Kennedy Lawyers

ORDERS

NSD 276 of 2022

BETWEEN:
CHARIF KAZAL

First Appellant

ADAM KAZAL

Second Appellant

AND:
THUNDER STUDIOS INC (CALIFORNIA)

First Respondent

RODRIC MARC DAVID

Second Respondent

ORDER MADE BY:

WIGNEY, WHEELAHAN AND ABRAHAM JJ

DATE OF ORDER:

3 NOVEMBER 2023

THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.Subject to paragraphs 3 and 4, the appellants pay the respondents’ costs of the appeal.
3.Either the appellants or the respondents may seek a variation of the order in paragraph 2 by filing and serving by 4.00 pm on 13 November 2023 a written submission of no more than three pages, 1.5 spacing, 12 point font, in which event the other parties may by 4.00 pm on 20 November 2023 file and serve a responding written submission of no more than three pages, 1.5 spacing, 12 point font.
4.Subject to further order, any application for variation of the order for costs will be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
WIGNEY J:

I agree with the orders proposed by Wheelahan J. I also agree with his Honour’s reasons for concluding that the appeal should be dismissed.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Wigney.
Associate:
Dated: 3 November 2023
REASONS FOR JUDGMENT
WHEELAHAN J:

Introduction

[2]

Further background

[14]

The Emergent joint venture and the initiation of a proceeding in the Cayman Islands

[16]

Events in the UAE

[19]

The decision in the Cayman Islands proceeding

[23]

The ICAC investigation

[25]

The “Bad Company” article

[30]

Proceedings in California

[33]

Other proceedings in this Court

[35]

The four matters

[37]

The first matter

[38]

The content of the first matter

[39]

The imputations conveyed by the first matter

[67]

The second matter

[70]

The content of the second matter

[71]

The imputations conveyed by the second matter

[81]

The falsity of the first and second matters

[84]

The third and fourth matters

[86]

The appellants’ defences at trial

[88]

The decisions the subject of this appeal

[91]

)    Judgment No 5 – default in answering interrogatories(1

[93]

Judgment No 5 – is an appeal precluded by the refusal of leave to appeal?

[96]

Judgment No 5 – consideration of the grounds of appeal

[105]

Judgment No 5 – first factual challenge

[128]

Judgment No 5 – second factual challenge

[131]

Judgment No 5 – third factual challenge

[135]

Judgment No 5 – was the decision unreasonable or plainly unjust?

[140]

(2)    Judgment No 7 – claimed apprehended bias

[146]

The findings of contempt of court

[147]

The application by Adam Kazal to be discharged from prison

[152]

The application to the primary judge

[154]

The appellant’s arguments on appeal

[163]

Judgment No 7 – consideration

[169]

(3)    Judgment No 9 – refusal of stay

[172]

Judgment No 9 – ground of appeal

[182]

Judgment No 9 – consideration

[186]

No substantial risk of conflicting judgments

[187]

Rule 16.07

[190]

(4)    Judgment No 10 – particulars of mitigation of damage

[235]

Judgment No 10 – the ground of appeal

[240]

Judgment No 10 – consideration

[243]

(5)    Judgment No 12 – the principal judgment following trial

[254]

Judgment No 12 – Ground 5 – apprehended bias

[255]

Ground 5(a) – issues of credit

[265]

Ground 5(b) – findings in relation to the judgment of Jones J in Re Emergent

[290]

Ground 5(c) – claimed differential treatment of the parties

[299]

Ground 5(d) – claimed error in awarding damages

[301]

Ground 5(e) – claimed error in treating Thunder Studios as an excluded corporation

[311]

Ground 5(f) – claimed derogatory observations giving the appearance of hostility

[313]

Ground 5 - conclusions

[329]

Judgment No 12 –contested imputation

[330]

Judgment No 12 – was the appellants’ conduct in trade or commerce?

[339]

Judgment No 12 – was Thunder Studios an excluded corporation after 11 October 2013?

[355]

Judgment No 12 – were the damages awarded excessive?

[375]

Disposition

[420]

Conclusions

[424]

Introduction

This appeal concerns the publication by the appellants of four sets of matters on the internet. The primary judge characterised the publications as being part of conduct of the appellants from 2013 up to trial that resembled a concerted, continuous campaign that was conducted as a vendetta to vilify and denigrate the respondents.
The two appellants are brothers: Charif Kazal, and Adam Kazal. The respondents to the appeal, who were the successful applicants below, are Mr Rodric David, and a company incorporated under the laws of California, Thunder Studios Inc (Thunder Studios). At the times relevant to the proceeding Mr David was the chairman and chief executive officer of Thunder Studios and was responsible for its day-to-day business.
The trial of the proceeding took place over the course of seven days in October 2020. Due to the COVID-19 pandemic, the trial was conducted by video link on Microsoft Teams, with the judge, counsel, and witnesses, in different locations.
Following trial, judgment was given for the respondents against the appellants for damages, and orders in the nature of permanent injunctions were made. The primary judge’s reasons for judgment on liability issues and damages following the trial are published: Thunder Studios Inc (California) v Kazal (No 12) [2022] FCA 110; 403 ALR 698 (Judgment No 12, or J12). His Honour subsequently gave reasons for granting permanent injunctions, reasons in respect of the extent of joint liability of the appellants, and reasons in relation to costs, which were awarded to the respondents on an indemnity basis: Thunder Studios Inc (California) v Kazal (No 13) [2022] FCA 256 (Judgment No 13, or J13).
The first and second of the four matters were published on a website titled the Kazal Family Story to which the judge referred as the Kazal website. His Honour held that these matters were defamatory of the respondents. His Honour also held that these matters were published maliciously and conveyed imputations that were false, and which had caused actual financial damage, thereby also giving rise to liability for injurious falsehood.
Thunder Studios and Mr David also alleged that the publication of the first and second matters on the Kazal website constituted conduct in the course of trade or commerce that was misleading and deceptive in contravention of s 18 of the Australian Consumer Law (ACL), which is Sch 2 of the Competition and Consumer Act 2010 (Cth), and by operation of s 131 of the Act has effect in relation to the conduct of corporations. Section 18 of the ACL is given extended effect by operation of s 6(3) of the Act to persons who are not corporations where the conduct involves the use of postal, telegraphic or telephonic services. The respondents relied on the extended operation of s 18 of the ACL¸ and this did not appear to be in issue at trial, and it was not in issue on the appeal. The primary judge did not make any specific findings in relation to whether the website publications contravened s 18 of the ACL, but his Honour must be taken to have found that those representations that were found to have been conveyed by the first and second matters engaged s 18 of the ACL, because his Honour referred to contraventions of s 18 of the ACL when assessing damages, and granted a permanent injunction in relation to them pursuant to s 232 of the ACL in terms to which the parties agreed: see J12 [354], [360] and J13 [3]. No point was taken on appeal in relation to the adequacy of findings in relation to the first and second matters.
Each of the appellants also had Twitter accounts. The publications on the Twitter accounts comprised the third and the fourth matters. The primary judge held that from about May 2013 the appellants published thousands of tweets on their respective Twitter accounts that purported to include links to headlines and news stories, but which instead took anyone who clicked on the links to the Kazal website which contained matter that was defamatory of the respondents. The judge held that the effect of readers being taken to the Kazal website was to drive up traffic, and consequently to raise the search engine optimisation ranking of the Kazal website when persons searched the internet for information about Mr David. The judge held that these Twitter publications constituted conduct in trade or commerce that was misleading and deceptive in contravention of s 18 of the ACL.
The primary judge assessed damages against the appellants in substantial sums. The awards against Adam Kazal were assessed in higher amounts than those assessed against Charif Kazal as a reflection of the greater degree of aggravation of injury that was attributed to him. In summary, the awards, together with the assessments of pre-judgment interest, are set out in the following table –

Charif Kazal

Adam Kazal

Thunder Studios

Damages

$50,000

$75,000

Interest

$15,000

$22,500

Total:

$65,000

$97,500

Mr David

Damages:

$400,000

$600,000

Interest:

$125,000

$225,000

Total:

$525,000

$825,000

As between Charif Kazal and Adam Kazal, the primary judge held at J13 [24] that Charif Kazal and Adam Kazal should be held jointly and severally liable for $350,000 of the awards in favour of Mr David and $45,000 of the awards in favour of Thunder Studios, with a similar proportion of pre-judgment interest in each case.
The substantial awards of damages in favour of Mr David were due in no small part to the extensive conduct of the appellants in pursuit of a campaign of intimidation and vendetta against the respondents that was held to be improper, unjustified, and lacking bona fides and which aggravated the injury to Mr David by causing him additional hurt. The primary judge also assessed compensatory damages that were awarded to Thunder Studios on the basis that aggravation by the appellants of its injury was to be taken into account: J12 [361].
In awarding damages to Thunder Studios and Mr David, the judge excluded damage to their reputations from publications in the United States on the ground that the laws of that country were substantively different to the laws of Australia: J12 [340], [357]-[358].
I will set out some more background before identifying the array of issues that arise out of the grounds of appeal.
Further background
The proceeding has a lengthy history. The matters the subject of the respondents’ claims were first published in June 2013. The proceeding was commenced in August 2014. Prior to trial there were a number of interlocutory decisions, and there were findings of contempt of court against Adam Kazal: Thunder Studios Inc (California) v Kazal [2016] FCA 1598 (Judgment No 1, or J1). These findings resulted in an order by the primary judge that Adam Kazal be sentenced to concurrent terms of imprisonment, the longest of which was 18 months: Thunder Studios Inc (California) v Kazal (No 2) [2017] FCA 202 (Judgment No 2, or J2). Four of six findings of contempt were upheld by the Full Court, which re-exercised the sentencing power, imposing a total effective sentence of 15 months’ imprisonment, which Adam Kazal served: Kazal v Thunder Studios Inc [2017] FCAFC 111; 256 FCR 90. The interlocutory background and the contempt proceedings were referred to by the primary judge at J12 [7]-[23]. Three interlocutory decisions of a procedural nature are also the subject of this appeal. In addition, the appellants challenge an interlocutory decision of the primary judge not to disqualify himself on the ground of apprehended bias which was said to arise from his Honour’s findings of contempt against Adam Kazal.
The course of this proceeding is set against the context of a wider field of disputation and acrimony between the appellants, the respondents, and corporations with which they have been associated leading to what his Honour described at one point as a “farrago of litigation across the world”. The wider disputation was referred to by the primary judge at J12 [109]-[150], and aspects of it are summarised below.
The Emergent joint venture and the initiation of a proceeding in the Cayman Islands
In 2006, Mr David was living in Sydney and working in property development and construction. It was about this time that he was introduced to Charif Kazal.
In early 2008, Mr David and Charif Kazal agreed to participate in a joint venture in the UAE. They incorporated Emergent Capital Limited (Emergent) in the Cayman Islands as a vehicle through which to pursue the joint venture. Emergent had two corporate shareholders, which were also incorporated in the Cayman Islands: RAAL Ltd, controlled by Mr David, and KTC, which was controlled by Charif Kazal and at least one of his brothers, Mr Tarek Kazal, known as “Tony” Kazal. The share capital of Emergent was 50,000 shares of US$1 each. The issued capital comprised 100 shares, held in equal proportions by RAAL Ltd and KTC. I will refer to RAAL Ltd’s participation in the venture as the David side of the venture and to KTC’s participation as the Kazal side of the venture.
The relationship between the two sides disintegrated over time. Ultimately, there were disputes, inter alia, as to the nature of the joint venture and the obligations of the relevant parties, the performance or otherwise of those obligations, and allegations of shareholder oppression regarding Emergent. The David side of the venture claimed that the Kazal side had only provided about AU$600,000 of funding contra the approximately AU$5.8 million the David side asserted it had contributed. The Kazal side claimed that the David side was responsible for its oppression in the context of shareholding in Emergent. It was said that on 28 January 2010, Mr David convened a board meeting of Emergent. Another board member, Mr Nick Mavromanolakis, had provided the Kazal side notice of the meeting on 22 January 2010. Only Mr David and Mr Mavromanolakis attended the board meeting at which it was resolved that 49,000 shares in Emergent would be issued to RAAL Ltd at US$1 each, with a correlative reduction in RAAL Ltd’s loan to Emergent. This was said to have been a deliberate ploy by the David side to gain control of Emergent. These allegations led to the matter being litigated before the Grand Court of the Cayman Islands. A proceeding was commenced by the Kazal side in March 2010 in which the winding up of Emergent was sought on the just and equitable ground.
Events in the UAE
Mr David moved to the UAE for the purpose of pursuing the joint venture. In about April 2010, Tony Kazal made a complaint to the Department of Immigration in Dubai. He alleged that Mr David had absconded in breach of his visa. The primary judge found that this complaint was false.
On 6 May 2010, both a civil and a criminal complaint were lodged by Charif Kazal in the Court of First Instance of Abu Dhabi against Mr David. These complaints alleged embezzlement by Mr David in relation to the joint venture, and other financial misdeeds. The primary judge found that these allegations were false.
As a result of Tony Kazal’s complaint, Mr David was summoned to a police station in Abu Dhabi in May 2010. Upon his attendance, he was detained so that he could be transported to the Dubai authorities. He was detained for two nights by the Abu Dhabi authorities before being released while they investigated the criminal complaint. The primary judge drew the inference that “the purpose of Tony’s complaint was to humiliate Mr David and make it difficult for him to conduct any defence of the winding up petition in the Cayman Islands while he was detained in custody in the UAE falsely accused of conduct that contravened his visa conditions”: J12 [119]. While travelling back to Abu Dhabi after his release by the Dubai authorities, Mr David was telephoned by a journalist, Mr Linton Besser. This was their first contact. Mr David and Mr Besser spoke with one another sporadically thereafter. In 2013, Mr Besser published an article in The Sydney Morning Herald which detailed Mr David’s detention. I will address that article in more detail below.
On about 3 May 2012, the UAE Court acquitted Mr David of all criminal charges and rejected the civil proceeding brought against him by Charif Kazal. On 9 January 2013, the Court of Appeal of the UAE dismissed Charif Kazal’s appeal against the first instance court’s decision – in respect of both the criminal aspect and the civil aspect.
The decision in the Cayman Islands proceeding
The Cayman Islands proceeding came before Jones J in the second half of 2010, which ultimately resulted in the decision in Re Emergent 2011 (2) CILR 329. Jones J held, inter alia, that the issue of the new shares amounted to a breach of fiduciary duty by Mr David in effecting a transaction with the dominant purpose of protecting his own position vis-à-vis Emergent by diluting the shareholding of the Kazal side. Mr Mavromanolakis was also found to have breached his fiduciary duty. In consequence, Jones J ordered that Emergent’s register of members be rectified to reflect the original distribution between the two sides, in equal proportions, of 100 shares at US$1.
In the Cayman Islands Grand Court, Jones J further found that Charif Kazal’s denial, in evidence, that the Kazal side had an obligation to fund Emergent equally with the David side, was not credible. The primary judge in this Court accepted evidence from Mr David that the two sides had agreed to fund equally the joint venture run through Emergent. His Honour further accepted that the Kazal side “did not contribute [its] share of that funding to Emergent”. The primary judge noted at J12 [112] –
Importantly, s 91 of the Evidence Act 1995 (Cth) precludes evidence of the decision, or a finding of fact, of Jones J or any other court, from being admissible here to prove the existence of a fact that was in issue in such a proceeding. However, Jones J’s findings are relevant, not to establish the truth of those findings in this proceeding, but as evidence simply of what his Honour said about the dispute that he resolved and his reasoning process to arrive at those findings. The matters complained of purport to give a significantly distorted account of his Honour’s finding that Mr David breached his fiduciary duty. The findings are thus admissible to prove what Jones J found, but not to prove the correctness or otherwise of those findings, save as to the extent that they may create issue estoppels as between Mr David and his privies on the one hand and, on the other hand, Charif and his privies.
The ICAC investigation
Another axis to the wider disputation between the parties involves the Independent Commission Against Corruption (ICAC) of New South Wales. Mr David was subpoenaed in early 2011 to give evidence at a private hearing, and he and his lawyers provided documents and evidence to ICAC. The subject of ICAC’s inquiry was an allegation that there was an undisclosed conflict of interest between a Mr Andrew Kelly, a senior executive of the Sydney Harbour Foreshore Authority, and Charif Kazal, in relation to their discussions, from 2007 onwards, regarding the establishment of a joint venture in the UAE.
The primary judge found that during the period of the ICAC inquiry, Mr David was confronted by two members of the Kazal family at a bar in Sydney on 12 May 2011. They threatened Mr David, by saying “We’re going to get you” and by following Mr David and his companions out of the bar, yelling and swinging a bag that appeared to contain heavy cans or jars of protein powder. The primary judge further found that on 20 May 2011, a person whom the police said was a private investigator engaged by Tony Kazal, had been following Mr David’s wife in a car as she drove in the vicinity of Bondi Junction, Sydney. Mrs David alerted the police and she and her husband went to pick their children up from their school. Upon arriving at the school, Mrs David noticed the presence of the same car which had been tailing her. Mr David followed the car on foot, in an attempt to capture a photograph of the driver on his mobile phone. When Mr David got close, the driver lunged through the window of the car and snatched Mr David’s phone. As the car began to drive off, Mr David jumped onto the bonnet and held onto the windscreen wipers as the car accelerated away. Mr David eventually jumped off the bonnet and sustained head injuries.

The police and the ICAC organised surveillance security for Mr David and his family and Mr David employed a private security firm to provide him and his family physical protection.
During the public hearings conducted by the ICAC in July 2011 a friend of Mr David, a Mr Mike Hammond, who was giving evidence, was accosted in the hearing room by Charif Kazal.
As a result of fears for his and his family’s safety as a result of the matters just described, Mr David and his family left Australia towards the end of 2011. The primary judge accepted Mr David’s evidence that he and his family “were terrified”.
The “Bad Company” article
Mr Besser used the information imparted to him by Mr David over the course of his interviews in relation to Mr David’s detention in the UAE in 2010 and related matters, to publish an article in The Sydney Morning Herald on 16 March 2013. That article was titled “Bad Company”. The article commenced as follows –
The stench - a gagging foulness of human sweat and faeces from filthy squat toilets - overwhelms Rodric David as he’s led, handcuffed, into a dank cell block crammed with 300 unwashed men. The Australian business tycoon - son of former grocery magnate John David, of IGA fame - tries his best to remain calm, but under his label shirt beads of sweat are trickling down his back. The shortish, stocky 40-year-old is the only Westerner in the cell at Abu Dhabi’s Port Zayed police station. And certainly the only one wearing a Zegna suit.
Knowing that any sign of weakness could be perilous, David keeps his eyes fixed firmly on the concrete floor. He spots a spare little table, sits down, and pulls out a notebook and pen from his jacket. He starts writing- and writing. When he runs out of pages, he starts scribbling over the writing between the lines.
“The chairman will see you now,” a fellow prisoner in a kendora, a traditional cream-coloured Arab gown, announces to him in English. David, at a loss as to what else to do, follows the man into a separate cell. Sitting on the bed is a fresh-shaven Arab, who looks David up and down and, in a plummy British accent, pronounces: “You are under my protection.” He issues David with a series of instructions. Don’t go to the showers. Don’t go to the toilet. Don’t leave your cell.
Amongst other things, the article proceeded to give an account of –
(a)the germination, and structure, of the Emergent joint venture;
(b)the falling out between the David side and the Kazal side;
(c)the 28 January 2010 board meeting;
(d)the complaint lodged by Tony Kazal with the UAE authorities;
(e)Mr David’s detention by the UAE authorities;
(f)the history of the Kazal family, presenting a narrative which in the words of the primary judge, “asserted numerous less than flattering accounts of their personal and business ethics and dealings”, including an allegation tying Tony Kazal to dealings with Hezbollah;
(g)the judgment of Jones J in the Cayman Islands proceeding;
(h)the ruling of the UAE Court at first instance;
(i)the ICAC hearings, including the incident involving Mr Hammond; and
(j)the incidents of 12 May 2011 and 20 May 2011, as outlined above.
In cross-examination, Mr David said that he had been interviewed from time-to-time by Mr Besser, but had not provided all the information contained in the article. He also gave evidence, accepted by the primary judge, that there was a difference between the conditions of his detention on his first night of detention with the Abu Dhabi authorities and his second night of detention with those authorities, which was at a different location to the first.
Proceedings in California
There were further proceedings brought by Thunder Studios and Mr David against Charif Kazal, Adam Kazal, and their brother Tony Kazal in the United States District Court for the Central District of California at Los Angeles in February 2017. In that proceeding, Thunder Studios and Mr David made claims against the Kazals for the tort of stalking under California Civil Code § 1708.7. I will refer to the circumstances that gave rise to this claim later in these reasons. The proceeding was tried by a jury in December 2018, which found that Adam Kazal and Tony Kazal were liable to Mr David for US$100,000 in compensatory damages, and US$1,000,000 in punitive damages. The jury also awarded US$2,600 against Charif Kazal in favour of Thunder Studios for copyright infringement.
Adam and Tony Kazal appealed the judgment to the United States Court of Appeals for the Ninth Circuit. On 15 September 2021, and following the conclusion of the hearing before the primary judge, the Court of Appeals allowed the appeal: Thunder Studios Inc v Kazal 13 F.4^th (9^th Cir, 2021). The appeal was allowed on the ground that the Californian stalking statute excluded “constitutionally protected activity”, which included speech, protest, and assembly protected by the First Amendment to the United States Constitution. One of the issues that was determined was whether the conduct fell outside First Amendment protection on the ground that it constituted a “true threat”. I will return to the decision of the Court of Appeals for the Ninth Circuit later in these reasons.
Other proceedings in this Court
At the time the proceeding below was being prepared for trial, there were two other proceedings on foot in this Court involving parties to this appeal and which were in the docket of Perram J. The first proceeding (the Re.Group proceeding) was NSD 2080 of 2016 in which the applicants were Re.Group Pty Ltd and Naveen David Singh, and the respondents were Adam Kazal, Charif Kazal, and Tawfik Elgazzar. Neither Mr David nor Thunders Studios was a party to this proceeding. The second proceeding (the KTC proceeding) was NSD 555 of 2019 in which KTC, the company incorporated in the Cayman Islands and controlled by at least Charif Kazal and Tarek Kazal to which I referred at [17] above, was applicant, and Mr David together with other parties were respondents.
The immediate relevance of the existence of the other two proceedings is that prior to trial the primary judge refused an interlocutory application by the appellants to transfer the proceeding below to the docket of Perram J, or to stay the proceeding until the other two proceedings had been determined: Thunder Studios Inc (California) v Kazal(No 9) [2020] FCA 846 (Judgment No 9, or J9). That decision is challenged on this appeal.
The four matters
It is against the above background of disputation that, as the primary judge held, the appellants published matter on the Kazal website and by thousands of Twitter posts that contained hyperlinks directing readers to the Kazal website all of which comprised the four matters. Save for one imputation that I will identify, the meanings held to have been conveyed by the first and second matters and the misleading representations conveyed by the third and the fourth matters were not the subject of challenge on appeal. I will identify the four matters, the meanings held to have been conveyed, and the primary judge’s findings as to publication.
The first matter
The first matter was a page on the Kazal website to which the primary judge referred as the “landing page”.
The content of the first matter
There were seven screenshots which comprised the first matter. The primary judge referred to the first screenshot as “shot A1”. The words “Kazal Family Story” appear at the top of the screenshot as they do for the next three screenshots relevant to the first matter. Underneath those words appear the words “Know the truth”, which are not clearly visible from the screenshot. The further words “RipOff 101 with the Corporate Thief John David” appear in the screenshot. Those words include an unexplained reference to Mr David’s father.
Handwritten numerical annotations were added to the copies of the screenshots for reference purposes. The primary judge referred to each annotation as “par X”, and I adopt that terminology.
Shot A1 is as follows –
The individual in the three photographs in shot A1 is Mr David. The far-left photograph is captioned “Rodric David Biography – ‘The Great Pretender’”. That text is hyperlinked to par 11 in shot A5, which is referred to below.
Shot A2 is as follows –
Par 6 reads “In business with Rodric David, an Australian living in the USA” and is a hyperlink to par 16 in shot A5, which is referred to below.
Shot A3 is as follows, and depicts a masked man reaching out with his hand –
Par 10 reads “Rodric David is a deft hand at character assassination, especially when he has so much corporate …” and contains a hyperlink to par 19 in shot A5, referred to below.
Shot A4 is as follows –
Shot A4 depicts a graphic device entitled “Failure Types”. Par 8 is a caption which reads “Another hopeless act by the corporate thief Rodric David” and is a hyperlink to par 22 in shot A5, referred to below. At the high-end of the “Perm[anent]” axis of the graph is a picture of Mr David. Arrows depict an upwards progression from “Harmless” to “Catastrophic” to the picture of Mr David next to a caption “Rodric David The Corporate Thief”.
Shot A5 is as follows –
Pars 11, 16, 19, and 22 are the places to which hyperlinks from the pars in shots A1, A2, A3, and A4 lead.
There are further hyperlinks on the right-hand side of shot A5. Par 26 links to par 11; par 27 to par 16; and par 28 to par 19. The primary judge noted at J12 [37] –
Each of the passages of text below the hyperlinked headings in pars 11, 16, 19 and 22 is introductory to another, presumably longer, passage of text on a subsequent webpage not in evidence. However, the passages have a common theme that disparages Mr David. For example, par 15 begins by referring to Mr David’s biography on his blog and tells the reader that this glossed “adroitly… over the truth behind his alleged successes Con artists exist because the world is full of gullible people who believe everything they hear or read because it is very, very…” and is followed by a hyperlink box entitled “read more”.
Par 16 has the heading “In business with Rodric David, an Australian now living in the USA?” and introduces the following text in par 18 –
If you are currently doing business with Rodric David, or even thinking about it, you need to visit our website – – to learn just how Mr David conducts business. Our so-called partnership experience with Mr David ended in court proceedings that found him guilty of a Breach of Fiduciary Duty exposing his
read more
The photograph at par 25 is of Charif Kazal.
The text of par 21 purports to explain the purpose of the website, being “to provide the public with the other side of the story so that they can come to an understanding of what was actually behind the smear campaign conducted in the Sydney Morning Herald. It explains how the journalist, Linton Besser, aided and abetted Rodric David in his mission to destroy the reputations …”.
Shot A6 is as follows –
The person depicted in the image to the right of par 30 is Mr David.
The text above par 31 refers, and provides a link to a letter written by Mr David’s lawyer, which sought that the website’s publisher “Cease and Desist and to Retract Libel”.
The headline to par 32 states, “Will Sydney Morning Herald correct the record as they promised?”.
Par 34 replicates the opening text of an email sent by Charif Kazal on 16 July 2013 alleging that Mr Besser had “written a complete fiction …”.
Pars 35-37 relate to an email sent by Charif Kazal to Mr Besser on 5 July 2013. The opening text of that email is above par 37. To the right of par 36 is an image captioned “TRUTH OR DARE”.
Shot A7 is as follows –
It was accepted by the parties before the primary judge that elements of the above screenshots which appear orange were actually red.
To the right of par 40 is a red box containing the words “WARNING” and a picture of Mr David captioned “The Corporate Thief Rodric David”.
The text above par 41 reads –
If you are currently involved in a business venture with Rodric David or are contemplating doing business with him, it can be injurious to your health.
Based on Experience, our advice is to RUN the other way … and fast!
Par 42 is linked to the narrative comprised of pars 21, 32-34, and 35-7 and to the “Intro” article which is linked to pars 42-44. The full title of that article is “Intro – How the Mercenary Journalist Linton Besser Aided & Abetted the Corporate Thief Rodric David” and appears to the right of par 42. The text above par 44 reads –
The story you are about to read is one of deliberate character assassination and how members of my family were, and currently are, portrayed in Sydney Morning Herald (SMH) newspaper on its digital website. Both the newspaper and digital website are owned by Fairfax Media Limited, the leading multi-platform media company in Australasia. It…
READ MORE
Pars 45-47 are related and introduce an article. To the right of par 45 is the heading “Chapter 1 – a brief history about the Kazal’s business endeavours”. To the right of par 46 is a picture of Charif Kazal. Above par 47 is the introductory text to the article.
The imputations conveyed by the first matter
The primary judge held that the first matter conveyed the following defamatory imputations concerning Mr David. For convenience, the judge’s own numbering of the imputations used at J12 [48] is noted in square brackets –
(1)Mr David is a corporate thief [6(b)];
(2)Mr David was convicted of breach of fiduciary duty as a result of not fulfilling his partnership obligations to the Kazal family [6(c)];
(3)Mr David is so lacking in integrity that he paid the journalist Linton Besser to publish deliberately invented lies in The Sydney Morning Herald about the Kazal family and their business dealings [6(d)];
(4)anyone doing business with Mr David runs the risk of physical injury if they do not go along with him [6(e)]; and
(5)Mr David paid the journalist Linton Besser to smear the Kazal family in an attempt to cover up his own criminal theft [6(f)].
The primary judge also held that the first matter conveyed the following defamatory imputations concerning Thunder Studios, again noting the primary judge’s numbering used at J12 [49] –
(1)Thunder Studios is run by a corporate thief [7(b)];
(2)Thunder Studios is run by Mr David, who was convicted of breach of fiduciary duty as a result of not fulfilling his partnership obligations to the Kazal family [7(c)];
(3)Thunder Studios is run by Mr David, who is so lacking in integrity that he paid the journalist Linton Besser to publish deliberately invented lies in The Sydney Morning Herald about the Kazal family and their business dealings [7(d)];
(4)anyone doing business with Thunder Studios runs the risk of physical injury [7(e)]; and
(5)Thunder Studios is run by a person who paid the journalist Linton Besser to smear the Kazal family in an attempt to cover up his own criminal theft [7(f)].
As to imputations 7(d), (e), and (f) concerning Thunder Studios, there were no express findings by the primary judge at J12 [69], [71], or [72] as to whether they were conveyed when the primary judge was considering those imputations together with the corresponding imputations 6(d), (e), and (f) concerning Mr David. However, a fair reading of the reasons for judgment as a whole shows that his Honour did find that imputations 7(d), (e), and (f) were conveyed because his Honour’s consideration of the question of identification of Thunder Studios at J12 [56], and his consideration of the falsity of the imputations at J12 [303]-[305], proceed on the premise that the imputations were conveyed.
The second matter
The second matter was referred to by the primary judge as the “Intro article”. Like the first matter, it was published on the Kazal website.
The content of the second matter
The Intro article is reproduced as “Annexure A” to these reasons. The Intro article was featured on the landing page and pars 5-6 in shot A2, and pars 16-18 and 25 in shot A5 relate to that article. At the top of the article is a photograph of a City of Los Angeles street sign captioned with the words “In business with Rodric David, an Australian now living in the USA?”. The headline reads “How the Mercenary Journalist Linton Besser Aided & Abetted the Corporate Thief Rodric David”. The words “Charif Kazal” appear to the bottom-right of par 1. Below those words appears a photograph of Charif Kazal and brief biographical notes appear adjacent to par 24.
The opening paragraph, par 2, begins “The story you are about to read is one of deliberate character assassination” in the portrayal of members of the Kazal family in The Sydney Morning Herald. Par 3 states that since 1 September 2010, that newspaper and Fairfax’s website had published over 24 “well-constructed articles” that Mr Besser and Fairfax “carried out [as] this prolonged smear campaign… purely to assist Rodric David, the David family and their business interests”. According to par 4, the reader “will finally discover the truth” on the Kazal website. Charif Kazal, in par 5, tells the reader that Mr Besser initially set out to denigrate three members of his family, namely himself and his brothers, Tony and Karl, but the targets expanded to include his parents and, later, his pregnant wife. At par 6, the reader is given a definition of “defame” and then told that Mr Besser “clearly worked directly for and with Rodric David to frame the distorted content of his articles defaming my family to apply inordinate pressure on us during legal proceedings we had commenced” against Mr David in May 2010 in the UAE and later in the Cayman Islands. At par 8, the reader is told that the articles were planned to coincide with and influence steps in those two proceedings. At par 8, Mr Besser’s photograph is captioned “The Mercenary Journalist”.
The Intro article provides some biographical details about Mr David, and his father John, at par 9. At par 10, the article tells the reader of John David “openly advising us to drop our court cases against Rodric and he [John David] would ensure that all the adverse media and attention towards the Kazal family would cease” and, at par 12 –
We did not take up Mr David’s offer and the overall consequences of us seeking justice through the courts have been severe. My brothers and I have been threatened, our business have been threatened, bullying of our children in school and sporting activities has occurred and continual stress is caused to all other family members awaiting the next unwarranted attack to be published in the Sydney Morning Herald against the family.
At par 12, the Intro article described the UAE proceeding as being based on Mr David’s corporate fraud as well as his breach of fiduciary duty as a director of a company in which the Kazal family had a financial interest.
At par 14, the article tells the reader that Mr David “designed the media smear campaign” to destroy the Kazals’ credibility during critical stages of the two foreign legal proceedings. It stated that he had annexed to his affidavit of 27 September 2010 in the Cayman Islands proceeding nine articles published between 1 and 17 September 2010 and referred in the affidavit to negative publicity about the Kazals. The article asserts that if that proceeding were dismissed swiftly, Mr David would benefit from “a much more rewarding business deal” of which the Kazal family was then ignorant.
At par 15, the article tells the reader that Mr David worked “closely” with Mr Besser to time the publications to “disguise secret financial deals of significant benefit to him”. It also asserts that Mr David used his training as an actor, the media, and other proceedings, including in the New South Wales Independent Commission Against Corruption (ICAC), to shift the focus away from his corporate fraud.
The Intro article informs the reader, at par 16, that the “deceptive attacking front page” publicity was “excruciating” and distracted the Kazal family’s focus from other important business matters. In par 17 under the sub-heading “Power of the news media” the reader is told, at par 17a, 17b, and 18, about how news media can influence and manipulate public perception and how the adverse publicity affected the Kazals.

The par 19 sub-heading, “Truth will prevail”, introduces the reader to the purpose of the Kazal website, outlined at par 20, being to present “the other side of the story” so that the public will understand “what was actually behind the smear campaign conducted in the Sydney Morning Herald”. The reader is told that the Kazal website would explain how Mr Besser aided and abetted Mr David “in his mission to destroy our family for financial gain” in the multi-million dollar range.
The Intro article asserts that Mr Besser only contacted the Kazal family for their responses as “impartiality pretences”, but, even then, nothing that they said was included in any of Mr Besser’s articles. It tells the reader that every attempt that the Kazal family made to get The Sydney Morning Herald to report the story fairly “was summarily rebuffed” and at par 21 states –
[t]hat is why my preference for a title for our heretofore unknown side of the story is “The Corporate Thief and The Mercenary Journalist” but then, that is just my opinion of a very appropriate headline.
The Intro article concludes with the promise that the Kazal family will continue to challenge openly “the abominable treatment” they had received from Mr David, Mr Besser, the newspaper, and Fairfax “until we obtain justice”: pars 20-23. The Intro article web page also contains links to other pages on the Kazal website.
The imputations conveyed by the second matter
The primary judge held that the second matter conveyed the following defamatory imputations concerning Mr David –
(1)Mr David was responsible for the children of Charif Kazal and each of his brothers being bullied at school and at sporting activities, because he paid Linton Besser to publish unwarranted attacks upon members of the Kazal family for having sought justice against him through the courts [9(f)];
(2)Mr David attempted to pervert the course of justice, by threatening Charif Kazal and each of his brothers and their business, because the Kazal family sought justice through the courts [9(g)];
(3)Mr David committed corporate fraud in the United Arab Emirates [9(h)];
(4)Mr David paid the reporter Linton Besser to lie about the Kazal family and their business dealings [9(i)]; and
(5)Mr David paid the journalist Linton Besser to smear the Kazal family, in an attempt to cover up his own corporate fraud and theft [9(j)].
The primary judge also held that the second matter conveyed the following defamatory imputations concerning Thunder Studios –
(1)Thunder is run by a corporate criminal who was responsible for the children of Charif Kazal and each of his brothers being bullied targeted at school and at sporting activities, because he paid Linton Besser to publish unwarranted attacks upon members of the Kazal family for having sought justice against him through the courts [10(f)];
(2)Thunder is run by a corporate criminal who attempted to pervert the course of justice, by threatening Charif Kazal and each of his brothers and their business, because the Kazal family sought justice through the courts [10(g)];
(3)Thunder is run by a person who committed corporate fraud in the United Arab Emirates [10(h)];
(4)Thunder is run by a corporate criminal who paid the reporter Linton Besser to lie about the Kazal family and their business dealings [10(i)]; and
(5)Thunder is run by a corporate criminal, Rodric David, who paid the reporter Linton Besser to smear the Kazal family in an attempt to cover up his own corporate fraud and theft [10(j)].
Although there was no express finding that imputation 10(h) was conveyed, the judge stated at J12 [82] that the respondents accepted that imputation 9(h) concerning Mr David was conveyed by the second matter. As with three of the imputations concerning Thunder conveyed by the first matter, fairly read, his Honour relied on the admission of imputation 9(h), and is to be understood as finding that Thunder Studios was identified by the second matter, thereby supporting a finding that 10(h) was conveyed. There is a further point, which is that there were no specific findings by the primary judge as to the falsity of imputations 9(h) or 10(h): see J12 [307]-[308]. This was likely an oversight, because the judge found at J12 [299] that each of the imputations that was found to have been conveyed was false. No party took any point about these issues on appeal, and they need not be pursued any further.
The falsity of the first and second matters
Mr David gave evidence, and was cross-examined. The appellants did not give evidence, and otherwise did not call any witnesses at trial, but did tender some documentary evidence. The primary judge found that each of the imputations conveyed by the matters was false on the ground that he accepted Mr David’s evidence: J12 [299]. Further, the primary judge made the following specific findings as to falsity at J12 [300]-[309] –
300Imputations 6(a) and 7(a): Mr David was not “convicted” of any crime. Moreover, he did not run away to California because of any conviction. There is no evidence or basis to say that Mr David’s conduct that Jones J found to be a breach of his fiduciary duty as a director in causing the diluting share allotment was a crime. Imputations 6(a) and 7(a) are false.
301Imputations 6(b) and 7(b): Mr David is not a corporate thief and, accordingly, imputations 6(b) and 7(b) are false.
302Imputations 6(c) and 7(c): For the reasons I have given in respect of imputations 6(a) and 7(a), Mr David was not convicted of anything. Moreover, there is no evidence that he did not fulfil any of his partnership obligations to the Kazal family. Jones J’s finding (which is not in evidence in this proceeding of the true position) was that Mr David had breached his fiduciary duty as a director owed to Emergent in exercising the power to make the allotment of shares that his Honour set aside. Imputations 6(c) and 7(c) are also false.
303Imputation 6(d) and 7(d): Mr David did not pay Mr Besser to write his articles. Moreover, there is no evidence that anything in those articles for which Mr David was responsible was “deliberately invented” or other kind of lie. Accordingly, imputations 6(d) and 7(d) are false.
304Imputation 6(e) and 7(e): There was no evidence to support any suggestion that Mr David posed any risk to anyone or that he caused or threatened, or even would cause or would threaten, physical injury to anyone at all, including anyone doing business with him. Imputations 6(e) and 7(e) are false.
305Imputations 6(f) and 7(f): There is no evidence that Mr David paid Mr Besser anything or that Mr David had committed any criminal theft. Accordingly, imputations 6(f) and 7(f) are false.
306Imputations 9(f) and 10(f): As I have found above, there is no evidence that Mr David paid Mr Besser anything. Nor is there any basis to suggest that Mr David was a corporate criminal or responsible for any conduct affecting Charif’s or his brothers’ children, or that any involvement of Mr David with Mr Besser’s articles had a purpose that had anything to do with members of the Kazal family seeking justice through the courts. Thus, imputations 9(f) and 10(f) are false.
307Imputations 9(g) and 10(g): There was no evidence to suggest that Mr David had threatened Charif or any of his brothers or their businesses at all, let alone as an attempt to pervert the course of justice. Imputations 9(g) and 10(g) are false.
308Imputations 9(i) and 10(i): These imputations are false for the same reasons as imputations 6(d) and 7(d) are.
309Imputations 9(j) and 10(j): These imputations are false for the same reasons as imputations 6(f) and 7(f) are.
The primary judge found that for the purposes of the action for injurious falsehood the publication of the matters was malicious, and that Mr David and Thunder Studios had suffered special, or actual damage in the sense discussed by Bowen LJ in Ratcliffe v Evans [1892] 2 QB 524 at 527-533 as the intended and reasonably probable result of the publication of the matters.
The third and fourth matters
The third and fourth matters comprised some thousands of publications made on the Twitter accounts maintained by Charif Kazal and Adam Kazal respectively. The causes of action that were alleged were misleading and deceptive conduct in contravention of s 18 of the ACL. There were no claims in defamation or injurious falsehood in relation to the matters published by the appellants on their Twitter accounts. As I have indicated, the third and fourth matters comprised entries on the appellants’ Twitter accounts that had the appearance of links to ordinary commercial newsfeeds, but which in fact contained shortened hyperlinks in the form of bitlinks that took a reader to the Kazal website, including to the landing page. “Annexure B” and “Annexure C” to these reasons provide some indicative examples by way of screenshots. Those examples are the same as those which the primary judge reproduced in his Honour’s reasons in J12.
The primary judge found at J12 [102] that once a reader was taken to the Kazal website, he or she could, and some did, move to the Intro article. The primary judge found at J12 [103] that the purpose of each of the appellants in posting large numbers of tweets with these characteristics was to mislead and deceive anyone who took such a tweet at face value into being presented with the landing page, as the home page of the Kazal Family Story, and its attacks on Mr David.
The appellants’ defences at trial
At trial, the appellants were represented by senior and junior counsel. The trial proceeded without the appellants having any pleaded defences before the Court. In the case of Charif Kazal, he had filed a defence and then an amended defence, but his defence was struck out in consequence of his failure to comply with a self-executing, or “guillotine” order directed to the provision of verified answers to interrogatories. A subsequent application for an extension of time nunc pro tunc within which to comply with the order was dismissed: Thunder Studios Inc (California) v Kazal (No 5) [2017] FCA 1572 (Judgment No 5, or J5). An application for leave to appeal was dismissed: Thunder Studios Inc (California) v Kazal [2018] FCA 593 (Bromwich J). On this appeal, Charif Kazal seeks to challenge the primary judge’s decision to refuse the extension of time within which to comply with the self-executing order.
In the case of Adam Kazal, he did not file a defence, and an application to file a defence out of time was dismissed: Thunder Studios Inc (California) v Kazal (No 3) [2017] FCA 1170 (Judgment No 3, or J3). There was no application for leave to appeal the dismissal of that application and the correctness of that decision is not in issue on this appeal.
The consequences for the appellants of having no defences on foot, and whether the absence of defences gave rise to deemed admissions as a result of the operation of r 16.07(2) of the Federal Court Rules 2011 (Cth) is a question in issue on this appeal. Although the appellants had no defences on foot, the primary judge permitted the appellants to cross-examine, to tender evidence, to make submissions in opposition to the respondents’ claims for relief, including as to mitigation of damage, and to put the respondents to their proof. Charif Kazal also had the ability to lead evidence in support of a cross-claim that he brought against Mr David. During the course of the trial the cross-claim was dismissed with costs on an indemnity basis upon Charif Kazal electing to call no evidence: Thunder Studios Inc (California) v Kazal (No 11) [2020] FCA 1656.
The decisions the subject of this appeal
Before going to the grounds of appeal and the issues in more detail, I will identify the subject matter of the appeal. There are five decisions of the primary judge that are challenged by the appellants –
(1)In Thunder Studios Inc (California) v Kazal (No 5) [2017] FCA 1572 (to which I have referred as Judgment No 5, or J5), the primary judge dismissed an application by Charif Kazal for an extension of time within which to comply with the self-executing order that resulted in his defence being struck out. As I mentioned above, the application prior to trial for leave to appeal that decision was dismissed. On the leave application it was held that none of the errors that was asserted was viable and that any appeal was doomed to fail: Thunder Studios Inc (California) v Kazal [2018] FCA 593 at [21] (Bromwich J). Charif Kazal challenges on this appeal the primary judge’s exercise of discretion to refuse his application for an extension of time on the ground that the claimed errors affected the final orders.
(2)In Thunder Studios Inc (California) v Kazal (No 7) [2018] FCA 996 (Judgment No 7, or J7), the primary judge dismissed an application that he disqualify himself from hearing the proceeding on the ground of apprehended bias. No application for leave to appeal Judgment No 7 was made prior to trial. The claimed errors attending that decision are now relied on by the appellants in order to challenge the final orders.
(3)In Thunder Studios Inc (California) v Kazal (No 9) [2020] FCA 846 (to which I have referred as Judgment No 9, or J9), the primary judge refused an application by the appellants for orders that the proceeding be stayed pending the hearing and determination of two other proceedings in the docket of Perram J. Alternatively, the appellants sought orders that the proceeding be transferred to the docket of Perram J. No application was made prior to trial to appeal that decision. The appellants now seek to challenge that decision as affecting the final orders.
(4)In Thunder Studios Inc (California) v Kazal (No 10) [2020] FCA 1636 (Judgment No 10, or J10), the primary judge ruled in the course of the trial that some particulars of mitigation of damage that had been relied on by the appellants be struck out, and that in consequence a particular line of cross-examination of Mr David that was said to go to the assessment of damages be disallowed.
(5)Thunder Studios Inc (California) v Kazal (No 12) [2022] FCA 110; 403 ALR 698 (to which I have referred as Judgment No 12, or J12) is the principal judgment following trial. In addition to the challenges to the interlocutory decisions to which I referred above, the appellants challenge the final orders on the following grounds –
(a)that there was a reasonable apprehension of bias having regard to the conduct of the proceeding and to various features of the principal reasons for judgment on which the appellants relied;
(b)that the primary judge was in error in holding that the first matter conveyed imputations 6(e) and 7(e);
(c)that the primary judge was in error in holding that the impugned conduct occurred in trade or commerce for the purposes of s 18 of the ACL;
(d)that the primary judge erred in finding that Thunder Studios was an excluded corporation for the purposes of s 9(2)(b) of the Defamation Act 2005 (NSW); and
(e)that for several specific reasons the assessments of damages were excessive.
I will address the grounds of appeal by reference to the decisions to which they are directed, although noting that in an omnibus way the amended notice of appeal embraces an appeal against the final orders relying on all of the grounds of appeal.
(1) Judgment No 5 – default in answering interrogatories
On 7 September 2017, the primary judge made the following interlocutory orders which were of a self-executing nature –
4.[Charif Kazal] provide sufficient answers, verified by affidavit, to the Applicants’ interrogatories 13, 15, 36(b), 38 and 44 on or before 4.00 pm on 15 September 2017.
5.In the absence of compliance with Order 4 above, [Charif Kazal’s] Defence (including any amended pleadings) be struck out.
The background to the making of these orders was set out clearly and in detail by the primary judge at J5 [9] to [15]. Of particular note is that the orders were made against a background where Charif Kazal had defaulted in complying with earlier orders of the Court that he make verified answers to interrogatories.
Charif Kazal did not comply with the orders of 7 September 2017, as a result of which by operation of those orders his defence was struck out. Mr Kazal then made an application to the primary judge on 4 December 2017 that the time for compliance with the orders be extended to 22 September 2017, by which time he had filed his verified answers to interrogatories. That application was dismissed, with the primary judge giving ex tempore reasons for his decision which were subsequently revised and published on 31 January 2018. Charif Kazal then sought leave to appeal the dismissal of his application for an enlargement of time within which to comply with the orders of 7 September 2017. As I mentioned above, the application for leave to appeal was dismissed. One of the issues that arises is whether, in consequence of the refusal of leave to appeal the primary judge’s interlocutory decision in Judgment No 5, the Court’s appellate jurisdiction has been exhausted.
Judgment No 5 – is an appeal precluded by the refusal of leave to appeal?
The first issue to address is whether it is open to this Court to entertain a challenge to the orders made in Judgment No 5 in circumstances where the application by Charif Kazal for leave to appeal those orders was refused.
There is a separation embedded in the text and architecture of the Federal Court of Australia Act 1976 (Cth) between the Court’s original jurisdiction and its appellate jurisdiction. The Court’s appellate jurisdiction is conferred by s 24. Under s 24(1A), an appeal cannot be brought from an interlocutory judgment of a court unless the Court or a Judge gives leave. Under s 25(2), applications for leave to appeal to the Court must be heard and determined by a single Judge unless a Judge directs that it be heard and determined by a Full Court, or the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers that it is appropriate to hear and determine the application. Applications for leave to appeal are heard in the Court’s appellate jurisdiction, and not its original jurisdiction. A party may apply to a single judge or a Full Court for leave once and only once, and no appeal lies to a Full Court from a refusal of leave by a single judge: see, Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424 at 431-433 (Bowen CJ, Lockhart and Sheppard JJ).
A decision to give or refuse leave to appeal involves the exercise of an unfettered discretion in s 24(1A) of the Act: see, Décor Corporation Pty Ltd v Dart Industries Pty Ltd [1991] FCA 844; 33 FCR 397 at 399 (Sheppard, Burchett and Heerey JJ). The legal effect of a decision refusing leave to appeal is to deny permission to appeal the interlocutory order. In this case, the reasons of Bromwich J for refusing leave to appeal the orders made in Judgment No 5 were that his Honour held that the proposed grounds of appeal had no serious prospect of success, and that the appeal was doomed to fail. However, while the merits of a proposed appeal from an interlocutory order are usually relevant to the question of leave, a refusal of leave is not an adjudication on an appeal itself. Leave might be refused for a range of discretionary reasons including, for instance, that an appeal from an interlocutory decision made during the course of a trial would interfere with the proper conduct of the trial and hamper the proper administration of justice.
By their notice of appeal, the appellants challenge the primary judge’s final orders made on 21 March 2022 and a number of interlocutory orders made during the course of the proceeding, including those consequent upon Judgment No 5. The Court’s appellate jurisdiction in relation to an appeal directly from those interlocutory orders has been spent, because leave to appeal was refused. However, no leave is required to appeal the final orders, and on an appeal from final orders an appellate court can correct any interlocutory order that affected the final result, at least where it is shown that the error resulted in a miscarriage of justice: see, Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; 209 CLR 478 at [4]-[8] (Gaudron, McHugh and Hayne JJ). Indeed, as long ago as 1859 the Judicial Committee of the Privy Council, in a judgment delivered by Dr Lushington in Maharaja Moheshur Sing v The Bengal Government (1859) VII Moore Ind App 283 at 302-303, stated –
We believe there have been very many cases before this Tribunal in which their Lordships have deemed it to be their duty to correct erroneous interlocutory Orders, though not brought under their consideration until the whole cause had been decided, and brought hither by appeal for adjudication.

The factual foundation for that determination was that –
The Kazals hired protestors, organized leafletting, hired a van to drive around Los Angeles with a message on its side, and published emails online to ‘‘openly and vigorously [ ] mak[e] the public aware’’ of their views of David’s business practices.
The prima facie position was that this activity constituted protected free speech. However this would be otherwise if its content rose to the level of a “true threat”. A “true threat” is a concept developed in US constitutional cases which refers to threats that are not protected by the First Amendment. The majority opinion stated at [12‑14] that true threats were, “statements where the speaker means to communicate a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals”, though the speaker “need not actually intend to carry out the threat”. The majority stated at [18] that in civil cases the test was objective, with the Court only asking “whether a reasonable person would foresee that the statement would be interpreted by those to whom the maker communicates the statement as a serious expression of intent to harm or assault”. This was referred to as the “reasonable speaker” test, citing Planned Parenthood of the Columbia/Willamette Inc v American Coalition of Life Activists, 290 F.3d 1058 (9th Cir, 2002) and United States v. Orozco–Santillan, 903 F.2d 1262, 1265 (9th Cir, 1990). The Court did not decide whether a subjective element that was required in criminal cases also needed to be satisfied in a civil case, being a subjective intent to threaten. The Court held that the conduct of Adam and Tony Kazal did not satisfy either test, stating at [19] –
A reasonable speaker could not conclude that David would understand these communications to threaten anything more than a continuation of this campaign to provide their side of the story. Nor is there any evidence that Tony subjectively intended to threaten violence. Tony wrote in an email to his investigator that he intended to “screw with” David. In context, this did not show an “intent to commit an act of unlawful violence.”
The above findings were made by reference to a standard of review under which the Court made an independent de novo examination of the whole record in order to determine for itself whether speech constituted a “true threat” and was therefore unprotected by the First Amendment to the US Constitution.
Therefore, there were two issues of relevance that were determined by the US Court of Appeals that were essential to its disposition of the proceeding. The first was whether, by reference to an objective standard, the reasonable speaker would conclude that the communications by Adam Kazal would be understood as threatening a serious intent to commit an act of unlawful violence. The second issue was, on the hypothesis that a subjective intent to threaten had to be shown, whether Adam Kazal subjectively intended to threaten violence. Both issues were determined in favour of Adam Kazal.
The issue before the primary judge was in what sum should damages be assessed in respect of publications that occurred outside the United States. As I have mentioned, his Honour excluded from the assessment of damages publications within the United States on the ground that the evidence showed that the laws of that country in relation to damage to reputation by defamatory publications was substantively different from that in Australia such that no reliance could be placed upon the common law presumption of fact that the laws are the same: see, Walker v W A Pickles Pty Ltd [1980] 2 NSWLR 281 at 284–285 (Hutley JA); Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; 223 CLR 331 [16] (Gleeson CJ, [115], [125] (Gummow and Hayne JJ), [249] (Callinan J) and [275] (Heydon J). The legally indispensable issues that the US Court of Appeals determined were different from the relevant issues before the primary judge, which were: (1) whether in relation to torts committed outside the United States the appellants had engaged in conduct that was unjustified, improper, or lacking bona fides such that it aggravated the respondents’ harm and could be taken into account in assessing compensatory damages in accordance with the principles referred to in Triggell v Pheeney [1951] HCA 23; 82 CLR 497 at 514 (Dixon, Williams, Webb and Kitto JJ); and (2) whether the respondents’ conduct should otherwise be taken into account in assessing compensatory damages in accordance with the well-known principle stated by Lord Esher in Praed v Graham (1889) 24 QBD 53 at 55 that in assessing damages for defamation the whole of the publisher’s conduct down to judgment may be relevant: see, Nationwide News Pty Ltd v Rush [2020] FCAFC 115; 380 ALR 432 at [428]-[429] (White, Gleeson and Wheelahan JJ). The determination of these issues did not require any findings that the aggravating conduct, or conduct that might otherwise inform the assessment of damages, be unlawful or itself constitute a civil wrong: Nationwide News Pty Ltd v Rush at [441]. Nor was the objective “reasonable speaker” test that was applied by the US Court of Appeals relevant. And whether Adam Kazal had an actual intent to threaten violence was not the issue. In determining whether there was aggravating conduct that should be taken into account in assessing compensatory damages the issue was whether, for the purposes of the law of tort in Australia, the conduct of Adam Kazal was not justifiable as between the parties and had the result of increasing the hurt to Mr David in relation to torts that had occurred outside the United States. And in assessing compensatory damages generally, there is a broad range of circumstances that may be taken into account.
The judge’s findings concerning the Los Angeles conduct were concerned with what Adam Kazal did, and its effect on Mr David and his family. Neither inquiry involved determining whether Adam Kazal exercised a right to constitutionally-protected free speech in the United States by reference to the objective standard of the “reasonable speaker”, and neither inquiry was dependent upon establishing that Adam Kazal committed the tort of stalking under Californian law. Further, the judge’s findings had as their focus the fact that the conduct of Adam Kazal was inseparably linked to parallel conduct in Sydney: see J12 [356]. There is therefore nothing about the primary judge’s findings on damages that suggests that the US Court of Appeals decision was erroneous. What Adam Kazal did was not put in issue. And the decision of the US Appeals Court did not operate as a preclusion on the primary judge accepting Mr David’s unchallenged evidence, during which he broke down in tears. Mr David gave evidence of his reaction to Adam Kazal’s email of 28 October 2016, that he was traumatised, and that he was in fear of his life and the lives of the members of his family: see J12 [227], [232] and [355].
Counsel for the appellants also submitted that the primary judge erred at J12 [313]-[316] in imputing to Charif Kazal the conduct of Adam Kazal. The judge’s findings were as follows –
313Charif asserted that there was no evidence of his being involved in Adam’s conduct in October and November 2016. However, two of the orders that I made by consent on 11 November 2016 had required Adam to cease publishing on the Kazal website and YouTube and remove from the website a video entitled “STREET PROTESTS AND VANS EXPOSING THE CORPORATE THIEVES RODRIC DAVID AND DAVID SINGH”. The Full Court set aside the convictions that I entered against Adam for breaching those orders. They also found that, although there was no doubt the video continued to be available on the website and YouTube after 11 November 2016, Adam’s convictions had to be set aside because as they said (Kazal 256 FCR at 121 [66]):
[i]n this case, aspects of the available evidence positively suggested that the appellant [Adam] did not in fact have control of the Family Website, in particular because it was operated by his brother, Charif. It was a reasonable possibility therefore that the appellant may not have had the control and thus capacity to determine whether or not the video continued to be on the Family Website. The suggestion at least followed that, rather than him, his brother or perhaps somebody else also had control of the means by which the video was on YouTube, although that is less clear.
(emphasis added)
314Thus there was an inference consistent with Adam not being in a position to bring about compliance with the orders to take the video down and so there was a reasonable doubt as to his guilt.
315However, because Charif, as he admitted in this proceeding, controlled the Kazal website, he was a publisher of the video showing the street protests and vans. I infer that this video was, or was similar to, the video in evidence which Mr MacCallum played from the website during the trial, that I described at [245] above. It is also safe to infer that Charif posted that video on the website because he intended to disseminate more widely how Adam and he were “exposing” the alleged conduct of Mr David and Mr Singh. In addition, he made or authorised the posting of content on the Kazal’s website during the period of Adam’s conduct in contempt, that repeated, yet again, the imputations, that I infer he knew at all times after 11 November 2016, Adam had given undertakings not to publish. For example, on 27 November 2016, Charif posted on the Kazal website an email he had sent to Mr Singh entitled “Charif Kazal Queries why David Singh a corporate fraud who stole $180 million, has nothing to say? – Day 62”. The post commenced by asserting that for nearly nine weeks Charif had “highlighted to you the many crimes you and Rodric David committed”. He wrote to Mr Singh:
… the best you could come up with to respond to the most damaging allegations a businessman could face was for you to have your wife seek an AVO against my brother Adam because he is driving a van around time [sic] exposing you for being a Corporate Fraud who stole $180 million from our family…
My website is tracking all of the despicable acts Corporate Thief #1 (C1) Rodric David and Corporate Thief #2 (C2) David Singh committed against Tony & I.
(emphasis added)
316Moreover, Charif continued the publication on the Kazal website of the stream of emails that he and his brothers, including Tony, wrote to Mr David, Mr Singh and their employees that repeated one or more of the imputations that the landing page and or the Intro article conveyed up to March 2017 and have remained accessible to anyone visiting the Kazal website since then (see [244] above).
Counsel for the appellants submitted that these findings were contrary to the respondents’ own case. Counsel relied on the following exchange at trial between the primary judge and senior counsel for Thunder Studios and Mr David at T28/20-27 –
SENIOR COUNSEL: Your Honour asked me, secondly, do we say that the conduct of 20 October/November 2016 which was, of course, not just vans but posters, placards, videos and so on is something that we rely upon as impugning Charif. And the answer is no; we don’t have that evidence.
HIS HONOUR: So but you were just relying on that against Adam, so - - -
SENIOR COUNSEL: Yes.
Contrary to the appellants’ submissions, the primary judge did not at J12 [313]-[316] impute Adam Kazal’s conduct to Charif Kazal. The judge’s findings were concerned with the publication of those activities on the Kazal website, which Charif Kazal had admitted to controlling.
(p)The primary judge erred in finding, at [230], that the Appellants physically threatened David;
This ground of appeal was not supported by any submissions on behalf of the appellants and is without merit. The ground is not a fair reflection of the primary judge’s findings at J12 [230], as it strips the reference to physical threats from its context. At J12 [230] the judge addressed credit issues affecting Mr David’s evidence, in the course of which his Honour stated –
Most of his evidence, apart from his state of mind, was consistent with objective facts or satisfied me as to its inherent plausibility. I have said that some of his account is coloured by the hurt and pain of the abusive conduct of the Kazals beginning with his arrest in the UAE, and continuing with the online and then physical threats and harassment to which he was exposed.
The physical threats and harassment, as opposed to those that were online, included the use of the vans, the protestors, and the placards that were the subject of his Honour’s findings.
(q)The primary judge erred, at [245], in finding that the YouTube video played by Mr MacCallum during the trial was available for viewing though the Kazal Website and, at [315], that Charif Kazal had continued to publish that video, or one similar to it, after the Court had enjoined its publication on 11 November 2016;
This ground of appeal was also not the subject of any submissions. The primary judge did not find in terms at J12 [245] that the YouTube video that was downloaded and viewed during the course of the trial was “available for viewing through the Kazal website”. At J12 [245] his Honour referred to a “Google article on the Kazal website” thereby suggesting that a Google page was the source of the reference to the YouTube video, although the position is not entirely clear, as this Court has only the written record of the trial and the recordings of the YouTube videos that were tendered. There were references in the transcript of the trial when the YouTube videos were played to a “YouTube link” (at T211/19) and to a “Google page” (at T212/34). What does appear from the evidence is that Charif Kazal had a YouTube account, and the evidence at trial was that the videos that were played in Court were from his YouTube account. I do not consider that this matter of detail is material to the most relevant aspect of the judge’s findings at J12 [315], namely that Charif Kazal posted the video showing the street protests and vans, which became exhibit B, because “he intended to disseminate more widely how Adam and he were ‘exposing’ the alleged conduct of Mr David and Mr Singh”.
(r)The primary judge erred, at [325], [326] and [327], in his characterisation of the findings of Jones J in Emergent;
Counsel for the appellants made submissions about the primary judge’s characterisation of the findings of Jones J in Re Emergent in support of Grounds 5(a)(v) and (vi) and 5(b), claiming that his Honour’s characterisation gave rise to a reasonable apprehension of bias. At [277]-[279], [291], and [294]-[295] above I rejected the underlying foundation for the submissions.
(s)The primary judge erred in holding, at [339], that there was no evidence that anyone to whom the matters complained of were published knew of the actual findings of Jones J in Emergent or had read a fair report of them;
(t)As a consequence of the error identified in paragraph (s) above, the primary judge erred in finding, at [324], that the Appellants’ case in mitigation of damages had no proper basis;
At J12 [339] the primary judge considered, for the purpose of assessing damages, whether account should be taken of the possibility that Mr David’s reputation could have been affected, to a minor extent, in the eyes of persons who had knowledge of the findings of Jones J in Re Emergent. The judge held that there was no evidence that anyone to whom the matters complained of were published knew of the actual findings of Jones J or had read a fair report of them, and nor was there any evidence of any effect of the findings on Mr David’s reputation. Counsel for the appellants on appeal did not develop any submissions in support of the above grounds, and I reject them.
(u)The primary judge erred, at [341], in finding that the Appellants’ submission that the following allegations and finding made against David and Thunder were the cause of any actual loss of business they claimed to have suffered was unjustifiable:
(i)the finding of Jones J in Emergent that David was not always truthful in his evidence and had breached his fiduciary duty;
(ii)a jury finding of fraud against David in proceedings brought by a former business associate; and
(iii)the Focus of Cars proceeding against David and Thunder which included allegations of fraud against them;
(v)As a consequence of the error identified in paragraph (u) above, the primary judge erred in finding, at [341], that in making the submission the Appellants had aggravated the damages suffered by David;
Grounds 10(u) and (v) challenge the judge’s findings at J12 [341] that the conduct of counsel for the appellants in cross-examining Mr David and making submissions about other court proceedings in which a jury in the United States made a finding of fraud against him, and about the character of Mr Panos, whom Mr David called as a witness, aggravated the damage. The findings at J12 [341] were as follows –
I reject the respondents’ submission that Mr David had had a number of most serious allegations and findings against him in the conduct of his business, and had chosen to associate with others, such as Mr Panos, of the same ilk. In my opinion that submission was unjustifiable and aggravated the damages. First, the proposition that Mr David had made such a conscious choice was not put to him. I doubt that the respondents intended the submission to include his unfortunate business association with Charif, Tony and other members of the Kazal family. And, had Mr David had any inkling of how they behaved in business and elsewhere, it is unlikely that he would never be where he is now. Secondly, the respondents referred in cross examining Mr David to a jury finding in a proceeding that Carey Martell brought. Thunder had employed him as a vice president from January 2015 to late 2016. Mr David and Mr Martell had a falling out and Mr Martell took proceedings that Mr David “didn’t attend”. The jury made a finding of fraud, but the judgment was vacated by agreement. The circumstances of that proceeding and the settlement are not in evidence. The jury’s findings were vacated by consent. There is no sufficient basis on which to make any findings about Mr David’s conduct in relation to his dealings with Mr Martell, who agreed to the jury’s findings being vacated. Nor is there any evidence of the effect, if any, of the jury’s finding on Mr David’s reputation.
It is plain that the judge rejected the submissions that were put, and did not think much of the submissions. However, in my view the judge was in error to treat the submissions and the cross-examination as aggravating the damage. Such a finding would have required subordinate findings that the cross-examination and submissions were unjustified, improper, or lacked bona fides in the way discussed by Walsh JA in Rigby v Associated Newspapers [1969] 1 NSWR 729 at 740, cited with approval by the Full Court in Nationwide News Pty Ltd v Rush [2020] FCAFC 115; 380 ALR 432 at [433]. No specific findings of this nature were made. As the Full Court explained in Rush at [432] –
... The reason for the requirement that conduct in the course of defending a proceeding must meet the threshold of being unjustified, improper or lacking bona fides in order to qualify as a basis for awarding aggravated damages is the unfairness that would result if proper conduct in the pursuit of a legitimate defence exposed a publisher to increased damages on that account
In support, the Full Court referred to Coyne v Citizen Finance Ltd [1991] HCA 10; 172 CLR 211 at 237 (Toohey J), citing Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348 at 379 where Samuels JA stated –
It is quite clear, in my opinion, that the vigorous persistence in a legitimate defence cannot be used to aggravate the damages. The manifest unfairness of any contrary view is obvious.

In circumstances where Mr David had been the subject of a finding of breach of his fiduciary duties as a director, had been the subject of a finding of fraud by a Californian jury, albeit in an undefended proceeding that was later compromised on appeal, and where counsel for Mr David called as a witness Mr Panos, who had reached a compromise with the United States Securities and Exchange Commission in relation to claims of creating fraudulent shelf companies, I cannot agree that it was outside the bounds of legitimate advocacy to raise these matters as issues affecting the assessment of damages. The fact that the judge rejected the submissions, and that one of the submissions of counsel for the appellants misfired because its substance was not put to Mr David in cross-examination, did not for these reasons render the appellants’ conduct of the trial, as between the parties, unjustified, improper, or lacking bona fides. I would therefore uphold Grounds 10(u) and (v).
(w)The primary judge should have taken the findings of Jones J in Emergent into account as mitigating any damage.
No separate submissions were made on behalf of the appellants in relation to Ground 10(w). The ground is a loaded one, because it likely rests on an assumption that the findings of Jones J were far more serious than the primary judge considered them to be at J12 [178] and [327], and also upon an assumption that the findings were known to persons to whom the matters were published, which the judge did not accept. For the reasons I have given, I am not persuaded that the judge was in error in his characterisation of the findings of Jones J, or in relation to his finding that there was no evidence that the findings were known to persons to whom the matters were published. It follows that Ground 10(w) should be rejected.
Disposition
The appellants’ submissions that the judge was in error in treating the publication of the Kazal website as having continued beyond mid-2017 and up until judgment have been accepted. So too have the submissions in support of Grounds 10(u) and (v), which challenged the judge’s findings at J12 [341] that the cross-examination and submissions at trial that were referred to by the judge were to be taken into account as aggravating the damage.
The only substantive order sought by the appellants in relation to the disposition of the appeal was an order remitting the matter for retrial. However, the powers of the Court in the exercise of its appellate jurisdiction under s 28 of the Federal Court of Australia Act 1976 (Cth) are extensive. They are not limited to ordering a new trial. During the hearing of the appeal, the Court raised with senior counsel for the appellants the fact that the grounds of appeal gave rise to different possibilities in terms of disposition of the appeal. Counsel for the appellants accepted that if the appellants succeeded only in relation to Ground 10, then it may be possible for this Court to reassess damages. The Court also raised with senior counsel for the appellants the possibility that a reassessment of damages by this Court might result in a higher amount being awarded. For his part, senior counsel for the respondents resisted any order on appeal in the event that there was some error concerning the assessment of damages. It was submitted that the primary judge’s awards of damages were to be regarded as conservative, if not modest, when regard was had to what was characterised as the utter and shocking flagrancy of the aggravating conduct.
In Dakhyl v Labouchere [1908] 2 KB 325 at 327, Lord Loreburn LC said that a retrial “is a most deplorable result, not to be entertained upon any but the most solid grounds, as the only means of redressing a clear miscarriage”. Dakhyl v Labouchere was an appeal in a libel case which had been tried by a jury where it was held that the trial miscarried as a result of the trial judge’s directions to the jury and a retrial was ordered. That is not the situation here, where the errors that have been identified are not errors that go to the conduct of the trial, but are errors of fact-finding made by a judge sitting without a jury that have been found upon a real review of the evidence and the judge’s reasons for judgment. If the Court concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings: Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 550 at [43] (French CJ, Bell, Keane, Nettle and Gordon JJ); Devries v Australian National Railways Commission [1993] HCA 78; 177 CLR 472 at 480-481 (Deane and Dawson JJ), citing the following passage from Coghlan v Cumberland [1898] 1 Ch 704 at 704-705 (Lindley MR, Rigby and Collins LJJ), which was an appeal from a case tried without a jury –
Even where, as in this case, the appeal turns on a question of fact, the Court of Appeal has to bear in mind that its duty is to rehear the case, and the Court must reconsider the materials before the judge with such other materials as it may have decided to admit. The Court must then make up its own mind, not disregarding the judgment appealed from, but carefully weighing and considering it; and not shrinking from overruling it if on full consideration the Court comes to the conclusion that the judgment is wrong. When, as often happens, much turns on the relative credibility of witnesses who have been examined and cross-examined before the judge, the Court is sensible of the great advantage he has had in seeing and hearing them. It is often very difficult to estimate correctly the relative credibility of witnesses from written depositions; and when the question arises which witness is to be believed rather than another, and that question turns on manner and demeanour, the Court of Appeal always is, and must be, guided by the impression made on the judge who saw the witnesses. But there may obviously be other circumstances, quite apart from manner and demeanour, which may shew whether a statement is credible or not; and these circumstances may warrant the Court in differing from the judge, even on a question of fact turning on the credibility of witnesses whom the Court has not seen.
Neither of the errors that I have identified at [420] above involves substituting any findings of fact that turn on the credibility of witnesses: cf, Waterways Authority v Fitzgibbon [2005] HCA 57; 221 ALR 402 at [132]-[134] (Hayne J). Moreover, the two errors are of small moment in the scheme of things, and they do not lead me to the view that the awards of damages by the primary judge were excessive, which is the claim made by the appellants in Ground 10 on their notice of appeal. If I were called upon to reassess damages myself, they would be in sums no less than those awarded to the respondents by the primary judge. The imputations found to have been conveyed by the first and second matters were very serious, and required high awards of damages as vindication. In addition, the appellants’ aggravating conduct that was the subject of the detailed findings by the primary judge was quite extraordinary, and caused increased harm to Mr David. As to Thunder Studios, the award of damages or compensation in its favour was modest, and I am not persuaded that it was excessive. There was a submission made at the hearing of the appeal by senior counsel for the appellants that the primary judge had awarded aggravated damages to Thunder Studios when this had not been pleaded. This claim was not raised as a ground of appeal or the subject of any written submissions. For the avoidance of doubt, no aggravating conduct of the appellants informs my assessment that the damages awarded to Thunder Studios were not excessive.
Conclusions
Appeals are made against orders, and not reasons: Lower Murray Urban and Rural Water Corp v Di Masi [2014] VSCA 104; 43 VR 348 at [108] (Warren CJ, Tate and Beach JJA). No error has been shown in the orders made by the primary judge. The following orders should be made –
1. The appeal is dismissed.
2.Subject to paragraphs 3 and 4, the appellants pay the respondents’ costs of the appeal.
3.Either the appellants or the respondents may seek a variation of the order in paragraph 2 by filing and serving by 4.00 pm on 13 November 2023 a written submission of no more than three pages, 1.5 spacing, 12 point font, in which event the other parties may by 4.00 pm on 20 November 2023 file and serve a responding written submission of no more than three pages, 1.5 spacing, 12 point font.
4.Subject to further order, any application for variation of the order for costs will be determined on the papers.

I certify that the preceding four hundred and twenty-three (423) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan.
Associate:
Dated: 3 November 2023
REASONS FOR JUDGMENT
ABRAHAM J:

I agree that the appeal should be dismissed for the reasons given by Wheelahan J, and with the orders proposed.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Abraham.
Associate:
Dated: 3 November 2023

ANNEXURE A
ANNEXURE B
ANNEXURE C

ORDER MADE BY:	WIGNEY, WHEELAHAN AND ABRAHAM JJ
DATE OF ORDER:	3 NOVEMBER 2023

Introduction	[2]
Further background	[14]
*The Emergent joint venture and the initiation of a proceeding in the Cayman Islands*	[16]
*Events in the UAE*	[19]
*The decision in the Cayman Islands proceeding*	[23]
*The ICAC investigation*	[25]
*The “Bad Company” article*	[30]
*Proceedings in California*	[33]
*Other proceedings in this Court*	[35]
The four matters	[37]
*The first matter*	[38]
The content of the first matter	[39]
The imputations conveyed by the first matter	[67]
*The second matter*	[70]
The content of the second matter	[71]
The imputations conveyed by the second matter	[81]
*The falsity of the first and second matters*	[84]
*The third and fourth matters*	[86]
*The appellants’ defences at trial*	[88]
The decisions the subject of this appeal	[91]
) Judgment No 5 – default in answering interrogatories(1	[93]
*Judgment No 5 – is an appeal precluded by the refusal of leave to appeal?*	[96]
*Judgment No 5 – consideration of the grounds of appeal*	[105]
Judgment No 5 – first factual challenge	[128]
Judgment No 5 – second factual challenge	[131]
Judgment No 5 – third factual challenge	[135]
Judgment No 5 – was the decision unreasonable or plainly unjust?	[140]
(2) Judgment No 7 – claimed apprehended bias	[146]
*The findings of contempt of court*	[147]
*The application by Adam Kazal to be discharged from prison*	[152]
*The application to the primary judge*	[154]
*The appellant’s arguments on appeal*	[163]
*Judgment No 7 – consideration*	[169]
(3) Judgment No 9 – refusal of stay	[172]
*Judgment No 9 – ground of appeal*	[182]
*Judgment No 9 – consideration*	[186]
No substantial risk of conflicting judgments	[187]
Rule 16.07	[190]
(4) Judgment No 10 – particulars of mitigation of damage	[235]
Judgment No 10 – the ground of appeal	[240]
Judgment No 10 – consideration	[243]
(5) Judgment No 12 – the principal judgment following trial	[254]
*Judgment No 12 – Ground 5 – apprehended bias*	[255]
Ground 5(a) – issues of credit	[265]
Ground 5(b) – findings in relation to the judgment of Jones J in Re Emergent	[290]
Ground 5(c) – claimed differential treatment of the parties	[299]
Ground 5(d) – claimed error in awarding damages	[301]
Ground 5(e) – claimed error in treating Thunder Studios as an excluded corporation	[311]
Ground 5(f) – claimed derogatory observations giving the appearance of hostility	[313]
Ground 5 - conclusions	[329]
*Judgment No 12 –contested imputation*	[330]
*Judgment No 12 – was the appellants’ conduct in trade or commerce?*	[339]
*Judgment No 12 – was Thunder Studios an excluded corporation after 11 October 2013?*	[355]
*Judgment No 12 – were the damages awarded excessive?*	[375]
Disposition	[420]
Conclusions	[424]

Charif Kazal	Adam Kazal
Thunder Studios	Damages	$50,000	$75,000
Interest	$15,000	$22,500
Total:	$65,000	$97,500
Mr David	Damages:	$400,000	$600,000
Interest:	$125,000	$225,000
Total:	$525,000	$825,000