Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69 6 December 2001 S8/2001
ORDER
Appeal dismissed with costs.
On appeal from the Supreme Court of New South Wales
Representation:
B R McClintock SC with C A Evatt for the appellant (instructed by Hunt & Hunt)
T K Tobin QC with T Molomby and M A Kumar for the respondent (instructed by McDonald Johnson Solicitors)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Palmer Bruyn & Parker Pty Ltd v Parsons
Injurious falsehood – Elements of the tort – Forged letter containing false statements – Initial publication to defined group intended to ridicule subject of letter – Report in newspaper of "bogus letter" – Contract terminated as a result of newspaper report – Whether loss suffered caused by initial publication – Whether loss suffered was a natural and probable consequence of initial publication – Identification of relevant falsehood – Relevance of reasonable foreseeability as criterion for limiting liability – Causation of plaintiff's damage – Whether actual damage to plaintiff proved or assumed by expert report.
Words and phrases – "Natural and probable consequence", "grapevine effect".
GLEESON CJ.The appellant claimed damages from the respondent for the tort of injurious falsehood. In order to succeed, it was necessary to establish that the respondent maliciously published a false statement about the appellant, its property or business, and that actual damage resulted from such publication. The present case does not raise for decision the question as to how far the action for injurious falsehood extends beyond concepts of business or property[1]. The appellant carries on, as a corporation, the professional practice of a surveyor. The statement in question was made about its professional conduct. The element of malice was found in the appellant's favour by the trial judge. The central issue in the appeal, and the point on which the appellant failed, at trial, and in the Court of Appeal of New South Wales, is whether there was a causal relationship between the making of the false statement and the damage of which the appellant complained.
The detailed facts are set out in the reasons for judgment of Gummow J and Callinan J. In brief, the appellant made an application to the Newcastle City Council on behalf of a client, McDonald's Australia Ltd ("McDonald’s"), for the rezoning of certain land for purposes of development. The respondent, a member of the Council, opposed the proposal. He concocted a letter, purporting to come from the appellant, which contained absurd inducements and threats. This was described by the trial judge as an act that was "calculated to ridicule the [appellant] and injure it in its effort to persuade the Council in favour of approving the development…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Palmer Bruyn & Parker Pty Ltd v Parsons
The appellant, Palmer Bruyn & Parker Pty Ltd, appealed to the High Court of Australia after failing in both the District Court of New South Wales and the Court of Appeal of New South Wales. The appellant, a surveying company, claimed damages for injurious falsehood against the respondent, Mr Parsons, a councillor. The dispute arose from a letter sent by the respondent to another councillor, which the appellant alleged contained false statements and caused it to lose a contract with McDonald's Australia Ltd.
The High Court was required to determine whether the loss of the McDonald's contract was caused by the respondent's publication of the forged letter, and if so, whether that loss was a natural and probable consequence of the publication. The court also considered the elements of the tort of injurious falsehood, particularly in relation to causation and the proof of actual damage.
The court reasoned that for a claim of injurious falsehood to succeed, the plaintiff must prove that the publication of the false statement was a substantial factor in bringing about the loss. While the fact that McDonald's knew the letter was forged did not automatically defeat the claim, the court found that the loss of the contract was not a natural and probable result of the original publication. This conclusion was based on the findings of the lower courts, which were upheld.
The appeal was dismissed with costs.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
The appellant company claims damages for injurious falsehood. The appellant failed in the first instance before the District Court of New South Wales (Taylor DCJ, sitting without a jury). An appeal to the Court of Appeal of the Supreme Court of New South Wales[4] (Stein and Heydon JJA, Foster AJA) was also unsuccessful.[4]Palmer Bruyn & Parker Pty Ltd v Parsons [2000] Aust Torts Reports ¶81‑562.The facts The appellant carried on a surveying business under the name of Palmer Bruyn & Parker Pty Ltd. A part of that business involved the preparation of development applications in respect of proposed developments and the making of submissions to, and lobbying of, municipal councils with a view to obtaining approval for those applications. In mid‑1995 McDonald's Australia Ltd ("McDonald's") engaged the appellant to act on its behalf in relation to a development application for a proposed McDonald's restaurant at Wallsend in Newcastle. A necessary step towards obtaining development approval was the rezoning of the proposed site. The appellant submitted a rezoning application to the Newcastle City Council ("the Council"). The person responsible for the carriage of this rezoning application was Mr Christopher McNaughton, a technical surveyor employed by the appellant. It should be noted that Mr Christopher McNaughton is the son of Mr John McNaughton, a director of the appellant company and a former Lord Mayor of Newcastle. The Council was to decide the outcome of the rezoning application on 26 March 1996. On 24 March 1996 a caucus meeting of the councillors representing the Australian Labor Party ("the ALP") took place. At that meeting, one topic of discussion involved the position that the ALP would take in respect of the rezoning application. The respondent, Mr Parsons, was a member of the Council and represented the ALP. On 24 March 1996, that is to say, on the day of the meeting of the ALP caucus, the respondent sent a letter by facsimile to one of the ALP councillors, Mr John Manning. Councillor Manning is not a party to this litigation and did not give evidence at trial. It is this letter, and the statements contained therein, which form the basis of the claim for injurious falsehood. The letter sent by the respondent was composed in the following way. The respondent cut the letterhead and signature block from a letter previously sent to him by Mr Christopher McNaughton. The respondent hand wrote the body of the message, and then photocopied the letterhead together with the body of the message and the signature block to form a composite document ("the letter"). The respondent then sent the letter to Councillor Manning by facsimile at approximately 1:38 pm on 24 March 1996. The body of the letter was as follows:"To The Newcastle City ALP CaucusDad said to tell you his final offer is 4 Big Macs and 2 choc sundaes per week for the rest of your life AND one free Golden Arches birthday party per year with Mum available to play the accordion.If you don't he's gonna tell his best friend Robert Webster and Bob Carr and Ernie Page and Kim Beazley and Fred Nile and anyone else who'll listen. They're gonna pressure you to support the Wallsend McDonald's Rezoning just like the good old days.Frank and Dennis said they're disgusted with yous.Final warning, do a deal (fuck all residents; they'll love it when it's built) OR Dad will remember something you said about him somewhere, sometime and you can expect a letter from Hunt and Hunt next Wednesday at the latest. You'll be sorry."
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
GLEESON CJ
GUMMOW J
KIRBY J
The better view is that expressed in Comment d to §632 of the Restatement of Torts[69], the Reporter for which was Professor Prosser[70]. In the comment upon the proposition that the publication of an injurious falsehood is a legal cause of pecuniary loss if "it is a substantial factor in bringing about the loss", it is said of slander of title cases:"It is enough that the publication of the disparaging matter is a substantial factor in determining his decision not to make the purchase or lease. A prospective purchaser of land or chattels may be prevented from buying them because of the cloud that the disparaging matter has cast upon the vendor's title. Indeed, he may know the vendor's title to be valid, and yet may decide not to buy because of the possible necessity of litigation to establish its validity, or because of the impossibility or difficulty of obtaining insurance against its invalidity. So, too, he may be deterred from purchasing the property merely because he fears that if he purchases it, the widespread dissemination of the disparaging matter, which throws doubt upon the title of the vendor or the quality of the subject matter of the sale, may make it difficult for him to resell it if the need arises for him to do so."The position taken by McDonald's in the present case is consistent with this reasoning. The point is further developed in Illustration 2 to Comment d, a slander of title example given as follows:"A, a jobber, has been a constant buyer of large quantities of B's product which in the past he has had no difficulty in reselling to wholesalers and retailers. C, a competitor of B, has launched an advertising campaign in which he has not only compared B's product unfavorably with his own, but has also stated that it has certain specific characteristics that make it undesirable for the purposes of which it is sold. In consequence A finds great difficulty in reselling B's product at a profit. Although he knows that B's product does not have the defects stated by C, A refuses to buy a further supply of B's product. C's disparaging advertisement is a substantial factor in preventing A from making the purchase."Thus the fact that McDonald's knew, from the newspaper article, that the letter had not in fact been written by Mr Christopher McNaughton is not of itself fatal to the appellant's claim for injurious falsehood. That claim fails on the other grounds identified in these reasons.[69]2d, vol 3, Ch 28 (1977).[70]See also Harper, James and Gray, The Law of Torts, 2nd ed (1986), vol 2, §6.1.Conclusion Both the trial judge and Heydon JA correctly held that the loss of the McDonald's contract was not the "natural and probable result" of the original publication of the letter. It is unnecessary to consider whether Heydon JA was correct in reversing the trial judge's conclusion that actual loss in the amount of $38,000 had been established. The appeal should be dismissed with costs. This appeal[71] concerns injurious falsehood. According to Professor Sawer, this is a "rare and anomalous tort"[72]. It has rarely been considered by this Court[73] or by other Australian appellate courts[74]. In part, this is doubtless because, unaltered by statute[75], the cause of action obliges a plaintiff to prove "each and every" one of its restrictive elements[76]. In part, it is because facts giving rise to the tort will often lend themselves to proceedings in defamation where the elements to be proved are less restrictive and the damages may be greater[77]. In part, it may be because trade practices legislation, where it applies, affords causes of action of broader ambit and with wider remedies[78]. However, in these proceedings, the only cause of action relied on was injurious falsehood. [71]From the New South Wales Court of Appeal: Palmer Bruyn & Parker Pty Ltd v Parsons [2000] Aust Torts Reports ¶81‑562.[72]Sawer, "Second Thoughts on Defamation", Nation, 20 December 1958 at 6 cited Morison, "The New Law of Verbal Injury", (1959) 3 Sydney Law Review 4 at 12.[73]cf Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84; Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1.[74]cf Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 692, 711, 733.[75]As was done in England by the Defamation Act 1952 (UK), s 3. The Defamation Act 1958 (NSW) effected change but this was repealed in 1974. In other States, the tort has been modifed by legislation: Defamation Act 1889 (Q), s 4; Defamation Act 1957 (Tas), s 5 (re-enacting s 4 of the Defamation Act 1895 (Tas)): noted Balkin and Davis, Law of Torts, 2nd ed (1996) at 677.[76]Spencer Bower, A Code of the Law of Actionable Defamation, 2nd ed (1923) at 208 (Art 60).[77]cf Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796 at 799; Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 694; Trindade and Cane, The Law of Torts in Australia, 3rd ed (1999) at 184‑185.[78]Balkin and Davis, Law of Torts, 2nd ed (1996) at 677.The facts and the findings of the primary judge