Olward v Hall - [2023] WADC 46

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   OLWARD -v- HALL [2023] WADC 46
CORAM:   STEVENSON DCJ
HEARD:   29 NOVEMBER 2022, 1 & 12-15 DECEMBER 2022, 7-10 FEBRUARY 2023 and WRITTEN SUBMISSIONS FILED 24 MARCH 2023
DELIVERED          :   21 APRIL 2023
FILE NO/S:   CIV 4318 of 2017
BETWEEN:   JODY DYLAN OLWARD
First Plaintiff
ANNABEL JEAN OLWARD
Second Plaintiff
AND
CONSTANCE HALL
Defendant

Catchwords:

Contract - Proper construction of contract - Heads of Agreement - Website designer to create, build, maintain, promote and monetise a website for the owner - Implied term - Whether owner obliged to provide 2 ‑ 3 posts of original content per week for the website - Proper construction of the agreement - Whether owner did not consent to launch of Queens Pages Directory - Whether implied term requiring owner to approve a date for the launch of the Directory on the website within a reasonable period after it was ready for use, and to promote it thereafter - Breach of contract - Damages - Measure of damages - Loss of opportunity - Whether loss proven on balance of probabilities

Legislation:

Nil

Result:

Judgment for the plaintiffs for $15,000
Judgment for the defendant on counterclaim for $5,250 (as agreed)

Representation:

Counsel:

First Plaintiff	:	Mr D Krishnan & Mr T O Coyle
Second Plaintiff	:	Mr D Krishnan & Mr T O Coyle
Defendant	:	Ms C J Smiddy-Brown

Solicitors:

First Plaintiff	:	Dana K Legal
Second Plaintiff	:	Dana K Legal
Defendant	:	Smiddy-Brown Legal

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

Allard v Jones Lang Lasalle (Vic) Pty Ltd [2014] NSWCA 325
Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98
BP Refinery (WesternPort) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266
Chanter v Hopkins (1838) 4 M&W 399
Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64
Cumace v Ioppolo [2022] WASCA 171
Durbin Roodepoort Deep Ltd v Newshore Nominees Pty Ltd [2005] WASCA 231
Fink v Fink (1946) 74 CLR 127
Foran v Wight (1989) 168 CLR 385
Hadley v Baxendale (1854) 9 Exch 341
JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112
Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 77 ALJR 768
Robinson v Harman (1848) 1 Exch 850
Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332
Simonius Vischer & Co v Holt Thompson [1979] 2 NSWLR 322
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56
State of New South Wales v Moss (2000) 54 NSWLR 536

STEVENSON DCJ:

Introduction

On 6 January 2016, the defendant, Constance Hall (Constance) was mummy-blogging when her Facebook post entitled 'Parent Sex' went viral on the internet. The post was about her sex life with her partner.
This happened in real-time as Constance was travelling in a car from Margaret River to Denmark with her partner. However, the excitement about her emerging online social media fame was tinged, as she said, with 'a feeling of awkwardness' because she had not told her partner about the blog before she posted it on the world wide web.
Constance's partner probably would not have been surprised. He would likely have considered himself in the frame, given Constance said she had already blogged about 'how many men she had slept with, what it was like to have kids' and other topics which she described as 'adult, funny, humorous … and really personal ... like uncut type of thing'.
Ironically, seven years later Constance's viral post is still causing trouble, albeit in a different form, by reason of the plaintiffs' claims against her in these proceedings, which owe their genesis to the blog and her resultant increased social media profile.
The next day, 7 January 2016, the second plaintiff, Annabel Jean Olward (Annabel), sent a text message to Constance:
Hey Connie
Woohhooo now your famous!! Let me know if you need any website help, advertising on your blog etc $$$$$$
Exciting! Xx
Constance immediately replied this was not her area, and that she did need help to make money from advertising on her site. In a series of messages, Annabel and Constance agreed to meet up to discuss the creation of, as Annabel said, a 'brand spanking new website'. Both parties, at the time, hoped the website would be a money‑making machine and a source of great financial wealth, which they subsequently agreed to share 50/50 in the first 12 months.
At the time Annabel and the first plaintiff, Jody Dylan Olward (Jody) were website developers trading as 'Super Minimal'. They believed their personal knowledge and relationship with Constance would allow them to cash in on her rising popularity as a blogger.
Time was critical. Constance needed to immediately capitalise her online notoriety from her viral post while she was still in the mindset of her new followers, whether they 'shared' or just 'liked' her published content. She described it as 'a small window of time'. In the world of print before the internet, this notion was: 'Today's news is tomorrow's fish and chips paper'. Constance was the news - it was all about her. Both parties wanted to take financial advantage of the opportunity created by her viral blog before she and it went stale.
The plaintiffs were, by their willingness to start work on developing a concept and creating a website before any final agreement was reached, also acutely aware of how critical time was. They appreciated that the prospective source of revenue from advertisers could only be secured if Constance was attracting 'clicks' on her blogging pages, thereby generating a potential source of income. From their perspective they were marketing and selling 'Constance'.
It is common ground between the parties that the best opportunity to capitalise on Constance's short spotlight of fame, was to create, build and maintain a website which could then be monetised, through advertisers, by followers 'clicking per page' or direct purchasing. This could not be done using Facebook. The business plan was to have a link from Facebook to Constance's website. The website would host original content from Constance and thereby provide the opportunity for her followers to be exposed to fee-paying advertisers which would generate revenue for both parties.
As the history of commercial litigation has proven, in the rush and excitement, the seed was set for fertile disputation between the parties. This is evident in their communications and conduct at the time, as they attempted to create a source of wealth from a new website, which they styled as 'Queens of Constance' (the website).
What the parties actually agreed between themselves is, in some critical respects, in issue in these proceedings notwithstanding the execution of a written agreement some months later bearing the handwritten date 25 April 2016 (the Heads of Agreement). It is agreed on the pleadings that the parties in fact executed the Heads of Agreement on or shortly after 12 May 2016. The agreement between the parties as evidenced by the Heads of Agreement will be referred to as 'the agreement' in these reasons for decision.
For convenience, and without meaning any disrespect, each of the parties will also be referred to by their first name consistent with the evidence and submissions of the parties during the trial. This will also facilitate a distinction between each of the plaintiffs.

The issues for determination

In this action the plaintiffs claim damages for breach of contract as website developers, arising out of an agreement to build a website and to then 'maintain, monitor, promote and manage the website' for the benefit of the defendant as owner.
As mentioned during the trial, the party's pleadings are in many respects dense and difficult to comprehend for the purpose of identifying the real factual issues. However, during the trial the issues in dispute emerged, and after a lot of evidence and commentary, crystalised as follows.
Some matters raised by the pleadings were not pursued or were otherwise settled by the parties during the trial. For example, the quantum of the defendant's counterclaim was settled by the parties during the trial for the pleaded sum of $5,250 on a basis known to them, as a matter of presumably obvious commercial expediency. A claim by the defendant requiring the plaintiffs to deliver up all materials relating to the website, or media and content, was not maintained.
In addition, when lawyers for both parties became involved towards the end of the first 12-month term of the contract, allegations and claims were made on behalf of their clients to 'try and grab the legal high ground' as it became apparent to the parties that the website was failing. However, issues arising out of these actions, including whether the plaintiffs were ready, willing and able to perform their obligations, and the plaintiffs' claim for damages to be assessed pursuant to cl 4.5 of the heads of agreement, were not maintained. Whether the plaintiffs had performed their obligations under the agreement to monetise the website properly was only an issue on the evidence going to the amount, if any, of the plaintiffs' claim for damages.
The issues for determination are:
(a)whether the agreement required Constance to produce and provide original content consisting of her own writing and ideas (original content) to the plaintiffs for uploading on the website, to be linked from her Facebook page with excerpts or teasers, as opposed to third‑party written contributions;
(b)whether it was an express or implied term of the agreement that Constance would provide original content for 2 - 3 posts per week on the website;
(c)whether Constance was obliged to approve a date for the launch of the Queens Pages Directory (Queens Directory) on the website within a reasonable period after it was ready for use, and to promote it thereafter; and
(d)whether the plaintiffs are entitled to recover any damages from Constance by reason of the breach of the alleged terms of the agreement referred to above, and if so the amount of the damages.

Evidence in the trial

Jody and Annabel gave evidence in support of their claim. In addition, the plaintiffs adduced evidence from Mr Bowan Spanbroek, an expert in the field of digital marketing involving ad networks and affiliate networks.
Constance gave evidence in defence of the plaintiffs' claim and in support of her counterclaim. In addition, Ms Katrina Abianac (Ms Abianac) gave evidence for the defendant in 2022 but was not required for cross-examination by the plaintiffs in 2023.
In addition to the oral evidence a substantial quantity of documentary evidence was tendered. At the beginning of the trial there were three lever arch files, but during the trial this was reduced to two lever arch files, together with some additional exhibits. Most of the bundles of documents contained in the files were tendered into evidence during the trial, but each page was not referred to.
Notwithstanding the considerable time delay from when the writ of summons was filed on 23 November 2017 to the commencement of the trial, (in part because the start of the trial was adjourned by different judges on two earlier occasions), the resolution of the issues between the parties do not substantially turn on factual issues or differences between them, except of course in respect of one or two aspects identified in these reasons for decision. As the parties did not make file notes or keep contemporaneous business written records at the relevant time in 2016, much of the evidence during the trial was based on reconstruction from their written communications.
The commercial relationship between the parties occurred as a result of Annabel (who already knew Constance) and Jody becoming aware that a post by Constance on her Facebook page had gone viral. The plaintiffs saw this as an opportunity for their business, Super Minimal, in that they intended to use their expertise and knowledge to enable Constance to generate revenue using a website which they had the skills and ability to create, build and maintain, and to attract advertisers to the website. This is described as 'monetising' the website based on the online social media profile of a person. In this case, the person was Constance.
In the early period of heightened excitement by reason of the online publicity Constance was attracting, the parties started negotiations for the creation of a website for Constance with a view to generating a stream of revenue from advertisers, yet to be identified and sourced.
These discussions led to the parties entering into the Heads of Agreement, but after considerable work had been done on both sides. The proposal progressed in an amicable way initially but for reasons attributable to both parties the website did not generate the hoped-for revenue. Like any creative idea, the concept of the business model, including the proposed Queens Directory and the use of third‑party posts ('Queentributions'), not Constance's own original content, was always going to be speculative and highly dependent on Constance being able to maintain and grow her social media profile on Facebook to drive traffic to the website.
Timing, even more so with hindsight, was always going to be critical to the business venture because without a high online following of Constance, advertisers for the website could not be obtained or attracted, and without advertisers revenue could not be generated.

Evidence adduced by the plaintiffs

(a) Jody Dylan Olward

Jody gave evidence that with Annabel, they established the web design business Super Minimal in 2013 for creative industries. Prior to this Jody had obtained a Bachelor of Science in computer science and multi-media from Murdoch University in 2005. Jody also worked on website development in London and undertook further study in Sweden. Jody explained the skill set was the technical side, actual website development including content planning, design and maintenance and advertising across the whole project life cycle for a website. In short, the business was aimed at design development and maintenance of websites for prominent West Australian artists.
As to terminology, Jody used the term 'blog' to refer to a website concerning posts but said a blog can also mean an individual post on a website. In Jody's terminology a post can refer to content on a website or on Facebook.
Jody had known Constance since about 1997 before meeting with her in early 2016 after 'she had gone viral' through Facebook. At that time Jody said Constance had about 130,000 followers which increased to about 250,000 when the website was launched on 14 February 2016.
Annabel informed Jody about Constance going viral, and this led to their first meeting at a café in Fremantle in mid‑January with Constance, and then a further meeting at Constance's home with her partner, Billy, a few days later.
Jody gave evidence that at the first meeting they suggested to Constance that she should have her own website which could contain advertising to monetise her following on Facebook. Jody said there were broad discussions around the concept, mostly that on Facebook Constance would not be able to place her own advertising, whereas on a website her own advertisements could be placed, and the followers could thereby be monetised.
Jody said Constance was positive about the idea and indicated that she did not know how to go about it and would like their assistance to create and maintain a website for this purpose. According to Jody it was discussed that Constance would publish original content on the website and then she would alert her followers on Facebook that she had published new content on the website which would encourage them to visit the website where they could see her own written content. The concept was to put a teaser, like an excerpt of the post on Facebook, and to then provide a link from Facebook to the website. Jody described this as a 'fairly standard concept'.
Jody said during the discussions consideration was given to putting a forum on the website, which Constance thought was a good idea, to increase engagement on the site so people would stay longer and come back regularly. The idea was that if they signed up to the forum then users could chat with each other. Jody said it was discussed that Constance would also participate in the forum and chat to the users.
Again, the concept of creating the forum was to increase engagement and to encourage more users to come and sign up to the website on the basis they had a chance to personally interact with Constance which would increase traffic on the website. Having discussed these general ideas with Constance it was agreed they would reconvene again to discuss a way forward.
Subsequently, about two days later, Jody said they (Jody and Annabel) met again with Constance at her home. On this occasion Constance's partner, Billy was present. Jody said they discussed again the idea of creating a website, placing advertisements on it and directing traffic from Constance's Facebook page to create a source of revenue from the website. According to Jody, Billy was enthusiastic but said he wanted to check some of the details with accountants he knew.
According to Jody during this meeting there was discussion about the frequency of how often posts should be made to the website. Jody said, 'it should be a few times a week' and gave evidence this 'was the consensus'. Jody maintained that Constance agreed, in reference to her level of activity on the website, that 'it should be a few times a week'.
Jody also gave evidence that 'someone said 2 to 3 times a week'. Jody's recollection was that Constance and Annabel both said that and agreed that was the appropriate frequency to achieve the best outcome. Jody maintained Constance agreed but could not remember her exact words. Jody said she was enthusiastic to the idea of posting a few times a week on the website and monetising it in this way.
During the second meeting, according to Jody they proposed to Constance that the revenue be split between them. Jody said Annabel first raised this and Constance agreed. Jody said there were not 'too many specifics' because they were going to sort them out in the contract later, but it was agreed they would 'build the website at no cost and begin work straight away' on the basis that Constance would not pay any money until there was some revenue derived from the website.
Jody said Constance was pleased they would commence work without payment and said 'that's good because I can't afford a website and I'm happy to go ahead on that basis where we split the revenue' from the advertising on the website.
Accordingly, Jody said they commenced work immediately to develop the website. This was about four weeks before the launch of the website on 14 February 2016.
Work was done in developing the website included branding, generating ideas for the logo, 'look and feel', and style. As the concept progressed Jody said Annabel would communicate ideas to Constance. As a result, the name for the website was agreed as 'queensofconstance'. Jody described it as a 'collaborative process including agreement with respect to the set of images and logo styles to be used'.
Jody primarily did the design work and physically worked on the computer to create the assets. Jody said development of the website also included planning the functionalities for the website and the forum including identifying the best platform as the user base and the most appropriate content management system. WordPress was chosen and BuddyPress was installed and modified to customise the front end of the website that users see. Jody did the layout using graphic design software which was developed with code. The process also included securing a server management company which could handle the anticipated traffic. Contact was made with Rackspace which agreed to host the website as a server management company.

In addition, Jody said that in the four weeks leading up to 14 February 2016 other matters dealt with included branding, planning, development and identifying suitable ad networks so that advertisements could be running on the site from its launch. In this regard an affiliate network was signed up and an appropriate campaign selected. This involved selecting appropriate advertisers within their network suitable for Constance's website and her audience. Jody also said there was an ad network called Plista, as opposed to an affiliate network, which was utilised thereby permitting choice as to exactly what advertisements would run on the website and to create the actual advertisement. This was done for the Marks & Spencer's advertisements.
Following the launch of the website on 14 February 2016 Jody was heavily involved in monitoring the site with the domain being queensofconstance.com. This involved monitoring the traffic which Jody did through Google Analytics, a linked website which on a daily basis tracked the number of visitors, the time spent on the site, where they came from and other details.
In addition, there were adjustments required to optimise the website after the launch to ensure it ran smoothly. Jody was also involved in further discussions with different advertising networks.
As to original posts from Constance, when received, Jody caused them to be posted into the website itself and uploaded an image with the title and other details published to the site. In the first 12 months Jody said Annabel and later, Ms Abianac, also uploaded posts.
Jody downloaded exhibit 1.10 which is a schedule of 39 posts to the website of original content by Constance during the period 14 February 2016 to 27 November 2016 commencing with 'I'm Done Cooking'. The last one was 'The Tales Of The Great Vagina Dress'. Jody also created exhibit 1.19 which is a table of 31 posts during the period 22 March 2016 to 6 December 2016 which were third‑party 'Queentributions' authored by several different writers.
Jody used Google Analytics to access the site data for the queensofconstance website for the period 14 February 2016 ‑ 13 December 2016 (exhibit 1.40). The data included recorded information about the monthly traffic for the website and the graph shows, with a dot, the total number of visits to the website in the preceding 24‑hour period ending midnight. Underneath the date recording the number of visits or 'sessions' Jody inserted the P number representing the post number depicted in exhibit 1.10 being the original posts of Constance. At the same time the Q number representing the Queentributions as set out in exhibit 19 was also recorded. I agree with the evidence of Jody that the standard pattern of the website traffic 'is heavily reliant on the content being posted' and this trend can be seen in the data obtained from Google Analytics for the 12‑month period.
For example, post 27 is the 24 hour period ending midnight 27 April 2016 entitled 'Support for Sally Faulkner' which shows a peak of 100,000 sessions whereas it was negligible for the several preceding days. Post 27 caused the sessions to jump up to 100,000, demonstrating the importance of Constance's posts to the website and its traffic numbers.
The Google Analytics data for the period 14 February 2016 - 13 March 2016 (the first month after the website was launched) indicated 1,258,330 million sessions, an average session duration of 1 minute 46 seconds and a bounce rate of 71.43%. By contrast for the period 14 November 2016 - 13 December 2016 the number of sessions was 470,668, the average session duration was 36 seconds and the bounce rate 89.21%. Interestingly during this period post 39 on 27 November 2016 (Constance's last post) caused the marginal recorded sessions at the time to peak at about 185,000 in the 24‑hour period ending midnight 28 November 2016.
The 'bounce rate' was described as the number of people who had come to the site and then left without visiting further pages or engaging with the page for more than a short period of time. At one point this was 10 seconds. In other words, the users have not engaged fully in the website before logging out. Again, there is a trend during the 12‑month period for the session duration times to decrease consistent with the bounce rate generally increasing
Jody gave evidence that an e-commerce system was set up on the website to enable Constance to sell her book online. For reasons known to Constance even though created, this facility was not used by her for book sales.
In early 2017, Jody said Constance caused another website to be built based on the website that Super Minimal had developed. Reference was made to Facebook posts by Constance promoting her new website 'likeaqueen.com' in the period 26 March 2017 - 12 July 2017.
After the launch of the website created by Super Minimal on 14 February 2016, but before the Heads of Agreement was prepared and signed, Annabel sent an email to Constance on 23 February 2016. Jody was involved in the preparation of the content, which provided, as follows:
…
We all knew this boring legal biz would come around sooner or later! Got to admit the ownership thing is a bit of a downer but that's cool I'm sure we can sort out something so we're all happy. Just wanted to send through our initial reaction for now so you know what we're thinking.
I guess the major point to us is that the part ownership thing was like more of an incentive for us to put everything into this for the long term, like going way beyond what we would normally do for a website so we can all get rich, and it seems like the lawyers have missed that point and translated it into 'a fair amount to manage the site' or something - like this is just a normal situation. Cut and dry when it's not.
The other thing is how the lawyer said this is never ever done. We have no doubt about this because it's a completely unique situation that I'm sure they've never seen before.
We've listed some points below, which is how we feel we've contributed so far and shows the kind of contribution we are likely to make in the future:
- Extra-rapidly developing the branding and website to enable you to capitalise on the publicity for your Facebook blog.
- Increasing the volume of traffic on the website and bringing in the whole American market, by organising the interview for Ellentube.
- Introducing the idea of the forums, which increases the usage and allows the website to grow organically (without requiring content to be written continuously).
- Increasing the income of the website by introducing the Queens Directory
(Coming Soon! : D)
- Paying all costs involved in the development, maintenance and hosting of the website (approx.. $1500 so far).
- Working on the basis of trust, with no initial payment or guarantee of any kind and at the expense of other work.
In regards to the hours contributed so far, we estimate the development time alone to be about 350 hrs (10 hrs per day / 7 days per week for 5 weeks). Obviously we didn't work the exact same hours each day, eg some days were 12 hrs and some days were 8 hrs. The total value is 350 x $121/hr = $42,350.00
Should the website ever be sold it occurred to us that all that would be left (after you had gone) would be mostly the ideas that we've put into it e.g. the forums and the Queen Directory.
As you know we're putting out heart, soul and our original ideas into this non-stop. We feel like the lawyer's proposal has taken out the personal nature of our original agreement. Having said that though I totally understand that you need to get legal advice and having paid for it you're gonna want to listen to it.
Anyway we totally believe that we can all come to an agreement that works.
…
Jody confirmed they received a response from Constance on 24 February 2016. The main topic was the ownership of the website which Annabel and Jody had created and launched. The communications evidenced the goodwill and the relationship that existed between the parties before the Heads of Agreement was subsequently executed to record their commercial agreement.
…
I have just read your email and chatted to Bill.
Both of us have agreed that we need to keep ownership for legalities and for control of direction ect.
We do how ever think you would deserve 10% of the money if we sold it so we would be happy to add a clause in the contract that states that if we do ever sell if you receive 10% of the websites sale price.
In the event that the contract terminated,
You would also still receive 10% profits for 3 years after your contract ended and then for example if we sold it in 10 years - you would get payments for the first 3 that you weren't working on it and you would get your cash of 10% of sale at the time of the sale.
We have to do this for 2 reasons,
1) it would be harder to sell if I only own 90% of it.
2) we would need to give you incentive to keep the contract with us.
If I sold the website you would be free to create more and continue to work, however I would not. Part of the sale contract would be that I didn't start another website for x amount of years etc.
Le me know asap if you agree to these terms so I can have the contract written because I don't want to blog on the website until we agree due to not wanting to clock up any more on that 42k bill lol
Jody's evidence was that the timeframe was very short to take advantage of the opportunity caused by Constance's social media profile. The work was described as 'a full-time effort' which involved creating the branding, the design, the development and launch, and obtaining advertising for the website, in a period of about four weeks which was described as 'a phenomenal amount of work'. Jody gave evidence in relation to the retrospective estimate of the time involved and the cost and value of the work undertaken by the plaintiffs in order to create and launch the website.
Jody explained why the attempt to boost the Facebook page to increase the reach of Constance's post did not work and why it was not tried again. As the experiment was not fruitful in Jody's opinion, it was abandoned.
Jody said that 'the organic reach brought substantial traffic to the website when there was a link' to the website from Constance's post on her Facebook page.
Jody gave evidence that they engaged with ad networks and affiliate networks to obtain advertising opportunities for the website. This involved direct negotiation with different advertisers including Evolve Media and also Marks & Spencer as an affiliate.
In support of the plaintiffs' damages claim, Jody gave evidence that when the website was launched, they observed that Constance had 250,000 followers in February 2016 which increased to 1 million over the 12‑month period as a result of Constance's popularity and success on social media. Jody's evidence was that they saw the exact numbers at the time which were visible on the Facebook page but with the passage of time was now unable to say the exact number. Jody did have a record that on 14 December 2016 the number seen was 1,034,000 followers, even though that would appear to be an approximate figure. Evidence was given that attempts to obtain the precise numbers of Constance's followers (or likes) during the relevant period from Facebook, including by subpoena, was unsuccessful. The evidence in relation to the number of followers of Constance on Facebook is the yardstick relied upon by the plaintiffs for their claim for damages. In this regard the total revenue derived for the first month after the launch of the website was calculated by Jody to be $7,352.70 (exhibit 1.20(b)), after apportioning some of the revenue which spanned the first two months.
This figure is relied upon by the plaintiffs for their updated damages schedule dated 20 January 2023 as the base from which the plaintiffs say their loss and damage can be extrapolated. The exception to the calculation requires, as Jody explained in evidence, a deduction from the total projected revenue of the website hosting costs for the 12‑month period of about $10,000.
In cross-examination, Jody was taken to their first meeting with Constance at the Fremantle coffee shop, the second meeting at her home which included Constance's husband, Bill and a third meeting at their own home shortly thereafter.
Jody said in cross‑examination that the discussions included advice on how to monetise a website which included discussion about the Mamamia website model and how Constance's website could become a community for her and her queens.
Jody did not accept in cross-examination that there was no discussion about the number of blogs or posts that Constance would do each week for the website. Jody maintained at the second meeting this was discussed including the context of how traffic would be directed to the website by putting a link on the source of Constance's social media presence, her Facebook page. Jody did not accept that there was no minimum weekly number of blogs discussed in the meetings. It was not specifically put to Jody in cross‑examination that there was no agreement that Constance would provide 2 ‑ 3 posts per week.
Jody did agree, in cross‑examination, that there was discussion to the effect that the model if successful would continue to earn money 'while they were sleeping'.
In cross-examination, Jody confirmed that notwithstanding the negotiations with Evolve Media, it did not result in any income for the website because even though a payment of $8,316.08 was received it was returned to Evolve Media because it was a mistaken payment on their part.
Jody was taken through the work done to create and have the website ready for launch in cross‑examination. This included added content from Constance's previous website so that the new website did not appear empty and to ensure there were advertising opportunities in place on the website.
Jody confirmed, based on Google searches, that the traffic to the website was 'always overwhelmingly from Facebook' as opposed to coming from internet searches.
In cross-examination, Jody said that none of the blogs on Constance's website were also on her Facebook page: 'No, they were never posted on the website and, in their entirety, on Facebook'. The posts were linked from Facebook and that was the purpose of creating a separate website and the reason for doing so. Otherwise 'people wouldn't go to the website'. They were directed to the website 'with an excerpt on Facebook linking to the website'. After the launch, Jody agreed it was suggested that some of the blog posts should only go on the website to try and encourage Constance's followers to go to the website on their own initiative, rather than waiting to be directed on Facebook.
Jody confirmed that in about August 2016, Ms Abianac was employed by Constance to assist with provision of content for the website but did not accept that she was involved in the day-to-day running of the website, except to resolve minor problems.
Jody did not accept that the website 'crashed' but did acknowledge that there were problems uploading images that were too large for the website when posting new images.
Jody also acknowledged that there were some issues with spam and hate speech. As a result, further key words were introduced to block this material from being posted in the forums.
In re-examination, Jody said 'if the post was already on Facebook, then there would be no reason for users to click forward to the website to read the same content, so it doesn't make sense' to post original content for the website on Facebook.
Insofar as the court is required to assess Jody's credibility, I find Jody presented as a clear, cogent and objective witness. Jody was not hesitant or evasive in cross‑examination and did not attempt to give answers in the most favourable light for the plaintiffs' case or to embellish the evidence by exaggeration.

(b) Annabel Jean Olward

Annabel said she had known Constance since about the age of 14. She accepted in cross‑examination they knew each other from being in the community and described their relationship as acquaintances.
Annabel described how she contacted Constance within days of her blog going viral after noticing that she was gaining a big following. She contacted Constance to ask her if she would like to discuss 'making a website so she could monetise this following'. Annabel was aware Constance had a website but saw an opportunity as she had suddenly gained a big following after posting 'pieces of writing' on Facebook. Annabel said 'by the time that post had finished snowballing she had about 250,000 followers' in early January 2016.
Since 2013 Annabel and Jody have operated the business Super Minimal which designs and develops websites mainly for art organisations. She said Jody had a background in website development and computer science and did the technical development and design, and she project managed the websites. Annabel holds an Advanced Diploma in Fashion and Textiles and a Small Business Management Certificate.
Annabel contacted Constance online and suggested they 'meet and talk about how we can monetise your following'.
On 7 January 2016, Annabel and Constance had following message exchange:
Annabel:Hey Connie
Woohhooo now you're famous!! Let me know if you need any website help advertising on your blog etc $$$$$$
Exciting! Xx
Constance:Ooooh will do for sure!! That's not really my area xxx
Annabel:Cool! You could def make money from advertising on your site and you could also have a 'buy me a coffee, I fucking need one button where people who like your blog can leave a few bucks [smiling emoji] Xxx
Constance:Ok so I need help advertising on my blog, but I don't really know where to start, a web site?
Annabel:Yea!! A brand spanking new website [smiling emoji] Wanna meet up and discuss [woman's head emoji] Xx
Constance:Absolutely
Not back to perth until mid next week, I'll shoot you a message when Im in [dancing girl and love heart emojis]
Annabel:Perfect! We've got some ideas [light bulb emoji] talk soon! (2 palm tree emojis]
Constance:Thanks you gorgeous thing xxxx
Annabel's evidence was that within a few days she met Constance at a café in Fremantle and that Jody and Billy (Constance's ex-husband) were present. During this meeting Annabel said she explained that the best way forward was to create a website, to channel traffic to it from Constance's following on Facebook and that she should post her original content on the website.
Annabel gave evidence that when Constance 'posted her content and queens came to read it, we would be able to make money off the advertising around those posts on the side'. Annabel said Constance should post an excerpt of the blog on her Facebook page (described as a small teaser) with a link to the proposed website and 'people would click on that, read the post on the website and that makes a market to sell advertisers space'. Annabel offered to manage the website including the advertising.
According to Annabel, Constance was 'very positive'. Annabel said Constance wanted to go ahead and said, 'that she trusted us that we'd be a great team, and was sure it would be successful'. The initial meeting was followed by two further meetings at Constance's home in Hamilton Hill and then at Annabel's home in Coolbellup. According to Annabel the meeting at her home involved just Constance and Jody.
As a result of the discussions during the meetings and other communications Annabel said it was agreed that Super Minimal would undertake the project to create a website for Constance which would involve design and development, including obtaining advertisers. Annabel said in return Constance agreed to 'supply the content'.
Annabel gave evidence that Constance 'agreed that the content would be similar to what she was writing on Facebook and that it was reasonable for her to provide 2 - 3 a week. She agreed that that was a reasonable amount'. Annabel said, 'I said to Constance two or three would be sufficient to bring enough traffic, even if it took one or two a week, and she agreed to that'. Annabel further clarified the agreement with Constance on the basis that 1 - 2 posts per week 'would be sufficient, but 2 - 3 would be ideal, and she agreed on that'.

In her evidence Annabel maintained she and Annabel did discuss and agree this amount of content at least five times and said, 'that's why in the first month there was 2 - 3, because that's what we had agreed on'.
In summary, Annabel's evidence was that Constance agreed to provide her own original content or writings which would consist of 2 ‑ 3 posts per week and Annabel indicated that amount would be sufficient for them to be able to sell advertising space and to generate revenue from the website.
As a result of the agreement Annabel said she and Jody blocked out several weeks of their calendar in order to design the website for Constance and to 'develop it at an astronomically fast pace to launch it in time to capitalise on her'. Jody was dealing with the technical aspects of the website and Annabel said she was contacting and dealing with potential advertisers.
Annabel said other ideas to grow the website organically were discussed and included a directory and a page on 'which Constance would go and chat to her queens in the forum'. The directory was described as a place where the 'queens' could promote their own small businesses. The idea was that people would pay a monthly fee to be part of the directory. According to Annabel, she and Constance agreed that $10 per month was a reasonable amount for membership.
Annabel said the website was launched on 14 February 2016 with Constance's first post, 'I'm Done Cooking'.
Annabel described the business model as being that Constance would never post the whole blog on Facebook and then copy it onto the website - 'it was always original content on the website but linked through from Facebook with a teaser'.
Annabel said that in their discussions with Constance it was agreed that Super Minimal would design, create and establish the website for Constance and then maintain it for an initial 12‑month period which included negotiating with and obtaining advertisers from different affiliate marketing groups and also dealing directly with individual advertisers. Annabel said Constance 'agreed verbally that it would be a 50/50 split' of the revenue and that they would only be remunerated when the website made a profit. Annabel said:
We weren't going to be paid anything to make the website and we were going to put all our effort into it and then be paid by the money it made through advertising - that's how we'd get paid for the work on the website.
After the website had been established, Annabel said Constance would send the blog text which she would spell check and grammatically correct, resize the images and 'then log into the backend of the website and upload the post with the title, the content and the picture and post it'. Annabel said both she and Jody did this.
Annabel said that because of the criticality of time they agreed to proceed based on their verbal discussions with Constance with knowledge that a written contract would eventually be entered into. Annabel said Constance told her she would get her lawyer to draw up a contract, but this did not occur until a few months later.
In the lead up to the preparation of the written agreement, Annabel said there was negotiation about ownership of the website. According to her it was agreed in oral discussions that Super Minimal and Constance would own half the website each but Annabel said 'Constance talked it through with her team and decided that it wasn't best for her and that we'd go 50/50 in the profits'. There was some delay as Super Minimal sought to negotiate for 10% ownership of the website, which did not eventuate.
Annabel said she became aware within a few weeks of the website launching on 14 February 2016 that Constance was writing a book. She did not regard this as an issue and described it as a separate thing to the website. The book launch did however, according to Annabel, delay the official launch of the Queens Directory. According to Annabel, Constance said 'The directory is great. I do still want to launch it. I'll wait till the book stuff dies down a bit'. Annabel said she thought the book was launched in August 2016 and notwithstanding this the launch of the Queens Directory was on hold permanently.
In relation to Constance's book, Annabel said they were asked to develop a section on the website for which they were paid an hourly rate separately, but two days before it was due to launch Constance said she did not want to use the website and would sell the book on a different site.
Annabel described how throughout the first 12 months of the agreement she monitored the Google Analytics dashboard vigilantly to see the numbers on the website and to track the users, where they came from and how long they stayed on each page. She said it was important to do this every day because her ability to attract advertisers was totally dependent on the number of visitors 'we could get to the website'. She described the potential to make revenue from the website as very exciting because she had never dealt with a website which had so many visitors.
In summary, Annabel's evidence was that advertisers would not advertise on websites with low visitor numbers but were prepared to pay and do so based on how much traffic there was. In her experience Annabel said there was a direct correlation between the number of website visits and the interest of advertisers in the website. She said it was the first thing every advertiser asked her: how much traffic?
Annabel said that as the number of posts from Constance diminished after the first month of the launch of the website the nature and substance of her communications with advertisers changed negatively. She said it was a lot harder to get them to commit 'when there wasn't any content being provided regularly'.
Annabel gave evidence that by monitoring Google Analytics she could see the direct correlation between the publication of a blog on the website and increased numbers of visitors - 'I could see it immediately, within seconds of her posting on Facebook, that the traffic on the website would shoot up. It was directly correlated, [there] was very small amounts of traffic coming from other channels'. Annabel's evidence was that in the first month it was 'quite easy to engage advertisers, and then it became more difficult as the year went on … but I wasn't approaching as many places myself because I didn't have the numbers to provide them'.
Annabel gave general evidence in relation to payments by advertisers including a flat monthly fee that is a function of the number of visits to the site (page impressions), or payment per click on the advertisement including additional payment from commission from actual resultant online sales. As to the latter method, Annabel said they did the graphic design for the Marks & Spencer's advertisements themselves.
As the content provided by Constance slowed, Annabel said:
Halfway through the year, Constance asked us not to speak directly to her anymore, and to just talk to her manager, Nerida Moore, her agent. Annabel understood that this is what Constance wanted and felt was best.
Annabel described how they watched the countdown to launch and communicated with Constance at the time. She said 500 users signed up to the forum on the first day and she did not think it could be going better. Annabel said Constance had a previous website and arrangements were made to redirect traffic from that to the queensofconstance website.
Annabel gave evidence by reference to numerous text messages between herself and Constance during the early months of the website. On 17 February 2016 Annabel advised Constance that there were 45,000 visitors on the website that day.
Consistent with their discussions at the time Constance said in a message to Annabel on 18 February 2016:
I think a good plan is to post on my page every second day to keep my followers growing and then that night with all my new followers I will announce that I'm going to go on the forum for an hour etc
Annabel said in evidence that she was pleased Constance was going to engage on the forum on the website 'but to me that felt like a little bit of a pullback from what had been happening the previous weeks, but I was as understanding as possible'. Also on 18 February 2016, consistent with other evidence of the direct correlation between the number of visitors to the website and the posting of original writing by Constance, Annabel sent a message to Constance on 18 February 2016: 'Also crazy difference in numbers when you post to FB or just to the blog. 54K yesterday, 14K today'.
The response from Constance evidences on the plaintiffs' case a further change of position with respect to the number of blogs to be provided by her to the website. Constance replied:
I tomorrow's post will be only for the web with another blurb about it on facey, I have to do both though, to keep the facey page constantly going is better for the web too. I am getting tired, I mean I used to only do a blog 3‑4 times a week, now I have to do one every day, just need to make sure the content stays captivating.
Annabel said in her response to Constance that she did not need to post every day, that there was no rush, and a slow burn is better but it was definitely necessary to keep feeding Facebook. Further messages passed between Annabel and Constance with respect to the timing of blogs on the website and the use of third-party content by 'CONtributers' as they were termed at that time. As Annabel said in her evidence, she was concerned about Constance's position and did not want her 'to burn out'. Annabel expressed surprise in her evidence that Constance thought she needed to post every day.
On 19 February 2016, Annabel messaged Constance 'we've had more people to this site today than any other day! And it's not mainly from Ellen - it's because you put the post up'. On 20 February 2016 Annabel messaged Constance and informed her that '102,000 went on the website yesterday! Amazing'.
On 20 February 2016, Constance sent a message to Annabel 'no I will re-post them if I have nothing to post one day, I had already planned to recycle old ones when I get stumped. Gotta keep shit happening on my FB page on quiet days'.
In part response, Annabel suggested to Constance that the website should contain a Queens Directory so that queens could advertise their small businesses and support each other subject to a suggested charge of $40 per year to be listed. The concept of the Queens Directory continued to be discussed in further text messages.
In text messages between Annabel and Constance on 23 February 2016, Constance provided a post which Annabel confirmed had been uploaded. In other messages Constance advised Annabel that she had 'other things to consider not just the website' and that she had been advised by her lawyer that he would not put his name to the contract because he thought she is being too generous by giving 10% ownership of the website to Super Minimal. Constance explained that she was 'feeling overwhelmed by everything'. Constance informed Annabel that she was 'incredibly happy with the work that you have done and are doing'. Annabel responded that they thought 'the point of the 10% was the idea it'll make you more money in the end if we are 100% invested in the success of the site'. Constance replied that she totally understood and suggested:
If your (sic) not happy with the sites potential earning capacity with advertising then I totally understand and we can take management elsewhere and pay you up until now - once we come to a figure. I'm happy with your work, I think your (sic) brilliant,
It is noteworthy that the signed agreement dated 25 April 2016 (which appears to have been entered into on about 12 May 2016) provided 100% ownership of the website to Constance.
On 28 February 2016, Annabel messaged Constance that the visitor numbers to the website had been low for three days and suggested Constance blog to the website the following day instead of Facebook. In response to some suggestions by Annabel, Constance replied on 28 February 2016 as follows:
The diary is tough, I am really exhausted for content-just coming up with 5 blogs a day is really hard, then writing as well is almost killing me.
I could however make it more of an Instagram type thing, with lots of photos and just a sentence or something.
I'm just really struggling for content atm
The endorsing thing won't be for a few years-a successful blogger needs to remain 'clean' from brand association for a few years while they build their following.
I am signed to a PR agent anyway for any endorsements will have to come through them and probs be through facey. They are the experts and they have said stay the fuck away for up to 5 years as it will kill your career if done prematurely
Following this exchange there were communications between Annabel and Constance with respect to advertising from Evolve Media which Annabel, in her evidence, accepted looked promising. Although there was an $8,000 payment received from Evolve Media by mistake which had to be repaid, notwithstanding the time and effort in the negotiations, it did not achieve any revenue for the website.
On 29 February 2016, Annabel messaged Constance that the website would go over 200,000 visitors for the day which she described as 'double our best ever day' (emphasis added). On 10 March 2016, Annabel messaged Constance to suggest they celebrate her Facebook community hitting 500,000. On 14 March 2016, Annabel asked Constance whether she would be blogging on the website or Facebook. Constance replied:
On the web!! I have come to a bit of a halt with my blogging- the last few weeks of blogging 5 days a week has exhausted my content, so I'm backing down to 2 blogs a week- one on the web and one on facey, when I have more to write about I will but I am feeling like my writing is sounding forced due to the pressure of being the only writer on they while blog. I have been researching other bloggers and they all only do 2 sometimes 3 blogs a week- so to save a nervous break down I'm backing of a bit. Hope you guys are cool with that.
Will have tomorrow's blog within the next hour or two xxx
Annabel's response by message was to agree and to see how it goes. She thought maybe Constance would get the same amount of traffic but all in one go instead of across the week. Again, in her evidence Annabel said she just wanted to support Constance as best as she could and did not want to upset her writing during that period of time.
On 23 April 2016, Constance messaged Annabel as follows:
Ok so when you get back I think we need to sit down and nut out a system for Queens.
I am blogging once a week, I think 3 Queen tributes a week is good.
Annaliese is doing a good job of going through the submissions but I don't think she will won't to do it forever without getting paid.
I don't have time to do that so you will need to decide if you want to do it or do we pay Anns to do it.
I have almost finished my book and I really want to turn Queens into a hugely profitable business but I can't ever really blog more than nice a week because I'm bored of it, people are bored of me etc ect so the page needs lots of support.
Something to think about for when you get back, hopefully we can have a meeting and chat about it. Xxx
Enjoy he rest of your honeymoon xxx
In May 2016 there were a number of communications between Annabel and Constance relating to the launch of the Queens Directory. On 2 May 2016, Constance indicated to Annabel that it could be launched between now and 15 May if it is ready, but any later than that would clash with the soft launch and opening of pre-orders for her book. Constance said 'up to you guys if it can be ready then'.
On 6 May 2016, Constance advised Annabel by text message that she had run out of money with publishing her book and was trying to find a cheaper option. In evidence, Annabel maintained that they were ready to proceed with the launch of the Queens Directory within the time frame indicated by Constance, but she did not get permission from Constance for it to proceed.
On 2 June 2016, Annabel messaged Constance that there were 233,000 visitors to the website which she described as a record. On 16 June 2016, Annabel by text message wished Constance good luck for the book launch and on 17 June 2016 Constance advised that she had sold about 3,000 copies.
Later in June 2016 with the increasing use of third-party contributions (Queentributions) Constance indicated that she would require assistance. On 6 July 2016, Constance messaged Annabel about the cost of a post office box for the website and said 'I don't think we should start splitting hairs, I have been very generous, if you are not happy that the website hasn't made the money you were expecting it to in the first year then that is something that needs to be discussed. Remember that we did originally want to pay you for the website outright. It was you guys who came to us with a proposal to work on commission and we agreed'. Again, to keep the peace, Annabel responded that if Constance thought it was a website related cost, then they would pay half. However, it appears from the evidence that this was the last direct message communication between Constance and Annabel and thereafter Annabel dealt with Constance's agent Nerida Moore and Ms Abianac in relation to matters concerning the website.
Annabel gave evidence that in December 2016 she saw on Facebook that Constance had over one million followers (or 'likes') at that time.
Annabel gave general evidence in relation to the work done and the time spent in developing the website and maintaining it including dealing with potential advertisers and responding to media enquiries. She maintained the website functioned at all times even though there were some problems with downtime which they caused to be fixed. There were also some issues with spam and hate mail which they took additional steps to prevent.
Annabel said Constance was active on her Facebook page in the middle of 2016 to promote her book. She inferred this reflected the reducing content and frequency of the number of posts that Constance was contributing for publication on the website. Annabel also maintained that they and Constance were being contacted with advertising requests that were suitable for the Queens Directory which Constance would not launch.
In cross-examination, Annabel said she had prior experience of dealing with bloggers but had not been involved in monetising websites on their behalf. Her experience, in this regard, was in relation to a community site.
It was put to Annabel, and she agreed, that Constance, Jody, and Constance's then husband, Bill were present at the Fremantle café meeting. Annabel did not accept that it was her idea that the website revenue be split 50/50. She maintained it was after a lot of discussion and said it was certainly not a result of the first meeting.
According to Annabel, Constance did not ask how much a website would cost but simply said that she could not afford to pay for one. Annabel agreed they discussed the Mamamia website concept, with its opinion pieces creating a lively community website, as an inspiration for what they were proposing to try and achieve with the website.
In cross-examination, Annabel did not accept in her discussions with Constance, that there was no agreement that Constance would be blogging about 2 ‑ 3 times a week on the website.
Annabel explained in cross-examination the concept of organically growing a website by getting users to engage with the website over time.
Annabel accepted she received a draft of the proposed agreement in about February 2016.
Consistent with her evidence about splitting the cost of the rental of a post office box for the website, Annabel said in cross‑examination that 'at some point we decided we would split the costs once the costs had been established. These costs included the hosting cost for the website payable to a third-party for their framework'.

Normal = Constance's blogs
Italics = Queentributions (third‑party blogs)

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
MD
Associate to Judge Stevenson
19 APRIL 2023