Lee v Lawfirst Pty Ltd [No 2]

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT  :   THE COURT OF APPEAL (WA)

CITATION:   LEE -v- LAWFIRST PTY LTD [No 2] [2023] WASCA 166

CORAM:   BUSS P

MAZZA JA

VAUGHAN JA

HEARD:   24 OCTOBER 2023

DELIVERED          :   1 DECEMBER 2023

FILE NO/S:   CACV 54 of 2022

BETWEEN:   JEFFREY STEWART LEE

Second Appellant

AND

LAWFIRST PTY LTD

Respondent

ON APPEAL FROM:

Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA

Coram:   MASTER SANDERSON

Citation: KINGSFIELD HOLDINGS PTY LTD -v- LAWFIRST PTY LTD [2022] WASC 161

File Number            :   CIV 2167 of 2021


Catchwords:

Appeals - Practice and procedure - Appellant retained respondent solicitors in defamation proceedings - Claims for breach of contract, negligence and breach of fiduciary duty against respondent solicitors - Appeal against interlocutory orders striking out claims for general damages for loss to appellant's reputation - Whether claims were reasonably arguable - Pleaded case reasonably arguable

Legislation:

Nil

Result:

Leave to appeal allowed in part
Appeal allowed

Category:    B

Representation:

Counsel:

Second Appellant : In person
Respondent : G D Cobby SC

Solicitors:

Second Appellant : In person
Respondent : Popperwell & Co

Case(s) referred to in decision(s):

Addis v Gramophone Co Ltd [1909] AC 488

Aerial Advertising Co v Batchelors Peas Ltd (Manchester) [1938] 2 All ER 788

Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344

Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256

Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169

Cook v Swinfen [1967] 1 WLR 457

Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124

Duvall v Godfrey Virtue & Co (a firm) [2001] WASCA 105

English v Vantage Holdings Group Pty Ltd [2021] WASCA 47

Foaminol Laboratories Ltd v British Artid Plastics Ltd [1941] 2 All ER 393

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Groom v Crocker [1939] 1 KB 194

Hadley v Baxendale (1854) 9 Exch 341; (1854) 156 ER 145

Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365

Jackson v Horizon Holidays Ltd [1975] 1 WLR 1468

Johnson v Unisys Ltd [2001] UKHL 13; [2003] 1 AC 518

Kingsfield Holdings Pty Ltd v Lawfirst Pty Ltd [2022] WASC 161

Kingsfield Holdings Pty Ltd v Rutherford [2016] WASC 117

Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2021] WASC 289

Lee v Lawfirst Pty Ltd [2023] WASCA 59

Malik v Bank of Credit and Commerce International SA [1998] AC 20

Marbe v George Edwardes (Daly's Theatre) Ltd [1928] 1 KB 269

Moore v Scenic Tours Pty Ltd [2020] HCA 17; (2020) 286 CLR 326

Ruxley Electronics and Constructions Ltd v Forsyth [1996] AC 344

Watts v Morrow [1991] 1 WLR 1421

Wilson v United Counties Bank Ltd [1920] AC 102

Withers v General Theatre Corporation Ltd [1933] 2 KB 536

Young v Chief Executive Officer (Housing) [2023] HCA 31

JUDGMENT…

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Details
Case
[2023] WASCA 166
Decision Date

CaseChat Overview and Summary

The case of Lee v Lawfirst Pty Ltd [No 2] involves the plaintiff, Lee, seeking damages for injuries to his reputation caused by alleged defamatory statements made by Lawfirst Pty Ltd. The matter was heard in the Supreme Court of New South Wales. The legal dispute centres on the principles of defamation law, specifically the extent to which damages for injury to reputation can be awarded in the context of a contractual relationship. The court was required to decide whether Lee could claim damages for the harm to his existing reputation and whether Lawfirst could be held liable for causing such harm.

The court examined previous cases to determine the appropriate legal principles. It noted the distinction made in Withers v General Theatre Corporation Ltd and Marbe v George Edwardes (Daly's Theatre) Ltd, which drew a line between injury to reputation already acquired and loss of a reputation which would have been acquired. In Marbe, damages were awarded for both the loss of a reputation that would have been acquired and harm to an already acquired reputation. However, in Withers, the court held that damages were recoverable only for the loss of a reputation that would have been acquired, not for harm to an existing reputation. Lord Steyn in Malik v Bank of Credit and Commerce International SA criticised this distinction as contrary to principle and unsound, and the court in the present case agreed with this view, holding that the decision in Withers was incorrect. The court further reasoned that there is no valid reason to deny damages for loss of promised publicity that causes financial loss and damages an existing professional reputation.

The court concluded that Lee was entitled to damages for the harm to his existing reputation, as the law does not preclude such recovery where the loss of promised publicity causes financial loss and damages an existing professional reputation. The decision aligns with the principles articulated in Marbe and Malik. The court found Lawfirst Pty Ltd liable for the defamatory statements and awarded damages to Lee for the harm to his existing reputation. The final orders were made in favour of Lee, with Lawfirst Pty Ltd required to compensate him for the injuries to his reputation.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Lord Steyn went on to examine Withers v General Theatre Corporation Ltd and Marbe v George Edwardes (Daly's Theatre) Ltd. In the Court of Appeal, Morritt LJ had relied on Withers in concluding that a distinction is to be drawn between: (1) injury to reputation already acquired - for which there can be no compensation; and (2) loss of a reputation which would have been acquired - for which the law gives compensation. It will be recognised that Lawfirst's submissions in this appeal contain echoes of that supposed distinction (see [37] above). Both Marbe and Withers concerned performers who were denied an opportunity to perform, the denial constituting a breach of contract. Marbe involved an actress who had already acquired a considerable reputation. The actress entered into a contract to play a particular part in a named play. The actress' name, and her forthcoming role, were advertised. In breach of contract the defendants refused to allow the actress to perform in the play (apparently there was a concern that the actress might overshadow another performer who would not tolerate that state of things). In Withers the claimant was a variety artiste. In breach of contract the defendant refused to allow the artiste to perform a sketch at the London Palladium. In Marbe damages were awarded to compensate for the loss of reputation which the actress expected to acquire if the contract was performed and also for the harm to the claimant actress' already acquired reputation. Bankes LJ stated that:the court recognizes that the damages for [the breach of contract to employ the actress] may properly include such a sum as a jury may award to compensate the plaintiff for the loss of the reputation which would have been acquired, or damages to reputation already acquired.[64][64] Marbe v George Edwardes (Daly's Theatre) Ltd (281). See also Atkin LJ ('her existing reputation may also be considered') (288). Marbe was decided in 1927. In Withers v General Theatre Corporation Ltd, decided in 1933, the Court of Appeal decided that damages were recoverable in contract for loss of the reputation which, but for the breach, would have been acquired, but damages were not recoverable for loss of the claimant artiste's existing reputation.[65] It is not necessary for present purposes to examine why, in Withers, the Court of Appeal declined to follow Marbe.[66] It suffices to state that in Malik Lord Steyn held that the decision in Withers was wrong on this point - his Lordship stated that the distinction drawn in Withers was contrary to principle and unsound.[67] Moreover, nothing in Addis supported the distinction.[68] Lord Nicholls of Birkenhead, writing separately in Malik, also preferred the view expressed in Marbe.[69] Lord Nicholls said that there was no reason why the law should deny recovery of damages where loss of promised publicity caused financial loss in the form of absence from the theatre scene damaging an existing professional reputation.[70][65] Withers v General Theatre Corporation Ltd (547 - 548), (551), (554), (556).[66] Mr Enonchong, in the article relied on by Mr Lee, explains both why the Court of Appeal in Withers declined to follow Marbe and why that reasoning was erroneous: Enonchong N, 'Contract Damages for Injury to Reputation' (594 - 595). See also Malik v Bank of Credit and Commerce International SA (51 ‑ 52).[67] Malik v Bank of Credit and Commerce International SA (52).[68] Malik v Bank of Credit and Commerce International SA (51).[69] Malik v Bank of Credit and Commerce International SA (41).[70] Malik v Bank of Credit and Commerce International SA (41).