QBH Commercial Pty Ltd v Nine Network Australia Pty Ltd

[2016] VSC 441

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PRACTICE COURT

S CI 2016 3019

QBH COMMERCIAL PTY LTD (ACN 163 992 498) and ANOR	Plaintiffs
v
NINE NETWORK AUSTRALIA PTY LTD	Defendant

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JUDGE:	JOHN DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	29 JULY 2016
DATE OF JUDGMENT:	29 JULY 2016 (Revised 5 August 2016)
CASE MAY BE CITED AS:	QBH COMMERCIAL PTY LTD & ANOR v NINE NETWORK AUSTRALIA PTY LTD
MEDIUM NEUTRAL CITATION:	[2016] VSC 441

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TORT – Defamation – Interim injunction – Whether in aid of final relief – Whether justified by reference to discretionary decisions – Where balance of convenience lies – Whether damages adequate - Application to restrain publication of a report on A Current Affair to permit proposed plaintiffs to negotiate its content – Injunction refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr T Guthridge	Hope Earl Lawyers
For the Defendant	Mr JP Cashen	Macpherson Kelley

 

HIS HONOUR:

1. On 23 July 2016, the proposed plaintiffs in this proceeding, QBH Commercial Enterprises Pty Ltd and Mr Jordan Mifsud, learned that the Channel 9 program, A Current Affair, was filming a report in relation to plumbing works being carried out by them at an address in Craigieburn. The proposed plaintiffs learned of this activity because of the presence of a reporter and a camera crew on site.

1. The reporter questioned Mr Mifsud who considered that allegations of unfair or sharp practice were being put to him.  Soon after, he instructed his solicitors to write to Channel 9 and they did so on 25 July 2016. 

1. By that letter the proposed plaintiffs refuted any allegation of unfair or sharp practice and they stated particular facts about their dealings with the occupant of the property, the client.  The solicitor asserted that there had not been any dispute or dissatisfaction communicated to the proposed plaintiffs, that transparently upfront pricing had been discussed by Mr Mifsud with the client before the works commenced and that the client was provided with, and accepted by signature, written quotations in advance of the work.

1. The solicitor's letter also made assertions about the conditions that were found on site by Mr Mifsud during the course of the plumbing work.  The solicitors contended that the proposed plaintiffs’ conduct was appropriate and the services were provided in a transparent manner and that any publication by Channel 9 which might imply unfair or sharp practice would be improper and defamatory. The solicitors invited Channel 9 to provide Mr Mifsud with an opportunity to respond to the issues that they wished to raise on the program.

1. The proposed first plaintiff is a company incorporated in Victoria that apparently carries on a plumbing and excavation business and the proposed second plaintiff is its sole director.  Mr Mifsud has not directly sworn an affidavit and his solicitor’s affidavit deals with limited matters.  It is usually preferable on applications such as this that the aggrieved plaintiff depose directly about relevant matters.

1. I am instructed by the proposed plaintiffs’ counsel that the first plaintiff employs less than ten employees and on that basis it will be alleged in any proceeding that the first plaintiff is an excluded corporation pursuant to s 9 of the Defamation Act 2005 (Vic), and accordingly that it is not denied the opportunity to pursue a claim in defamation. For present purposes I am prepared to proceed on this basis. An originating motion foreshadows a proceeding alleging causes of action by both plaintiffs in defamation and injurious falsehood.

1. At about 9 pm on 28 July 2016, some days after the solicitor’s letter was sent, the plaintiffs' solicitor became aware of a publication appearing on the Facebook page maintained by Channel 9's program, A Current Affair, advertising a report to be televised at 7 pm on 29 July 2016.  Although the affidavit does not say so, I will infer that the solicitor became aware because he received instructions from his client that he, and perhaps others, had seen this report.

1. The solicitor exhibits to his affidavit a screen dump from the Facebook page.  I do not know who downloaded the material exhibited, but it was apparently downloaded at about 9 pm on 28 July 2016. A statement appearing within the information piece on the website about this program reveals that it had been posted for two hours.  I will infer that from about 7 pm on 28 July 2016, this material was available to be viewed on the internet and it was likely to be displayed for a period of 24 hours leading up to the broadcast of the program and may continue to appear after the broadcast.

1. The Facebook page states:  

The trusting pensioner charged $200,000 to fix a broken pipe that should have cost $250.

Below that statement is an embedded video and the title screen of that video contains the words ‘Trusting pensioner charged $20,000’ between the logos of A Current Affair and Channel 9.  The words appearing on the title screen of the video are significantly more prominent than the earlier words in the statement.

1. The plaintiffs' solicitor revisited this page at 1 pm today and a second screen dump was in evidence having been taken about that time. The exhibit reveals that the Facebook post had now been displayed on the web page for 17 hours, but at some prior time the statement appearing above the embedded video had changed and now stated: 

The trusting pensioner charged $20,000 to fix a broken pipe that should have cost $250.

1. The proposed plaintiffs submit that the material appearing on the Facebook page and, by inference, the material to appear in the program to be broadcast on television that evening, contains considerable factual inaccuracies of which the statement that proposed plaintiffs charged $200,000 for plumbing services is the most blatant example. Counsel for the proposed plaintiffs described the uncorrected statement as a deliberate lie that was not a typographical mistake.

1. The proposed plaintiffs' solicitor asserted that the factual inaccuracies contained in the Facebook page information piece may cause the plaintiffs irreparable reputational damage and he stated that the plaintiffs hold a genuine concern that the impending report on A Current Affair, if it contains material which is similarly factually inaccurate, as is likely, may be defamatory of the plaintiffs and cause them further irreparable reputational damage.

1. There is no evidence before the court of the content of the program to be shown on television tonight except for the embedded video itself and the statement of counsel for the proposed defendant that the program will contain material substantially to the like effect. The program will also include a comment by another plumber that in his opinion an equivalent broken pipe could have been fixed for $250.

1. There is some evidence of the extent to which persons have downloaded and viewed the information piece on the Facebook page over the period of 17 hours between the two screen dumps that are exhibited. A significant number of viewings have occurred, as at least 53 comments have been made. It is not precisely clear to me how many viewers comments have been posted in response to the article.  It may be inferred that there have been viewers who left no comment. What is clear is that comments adverse to the potential plaintiffs have been published on the Facebook page in response to the information piece. 

1. When invited to identify the imputations that the proposed plaintiffs will allege arise from the publications that have so far been made or are likely to be made, counsel for the proposed plaintiffs submitted that the imputations raised are that the proposed plaintiffs are opportunists, that they take advantage of pensioners, that they are greedy, that they overcharge, and that they are untrustworthy.

1. On the material before the court, a prima facie proposition that publication of the information piece on the Facebook page may have caused reputational damage and publication of the television program might further damage the plaintiffs' reputation appears reasonably arguable.  At this stage, no defences have been foreshadowed.

1. The proposed plaintiffs application is by originating motion.  That in itself is curious as proceedings for defamation or injurious falsehood should be commenced by writ.  The relief sought by the originating motion is as follows: 

It is an application for an interlocutory injunction against the defendant before the commencement of a proceeding in the circumstances referred to in Rule 4.08 being an urgent case for the defendant to be restrained from publishing any material in connection with the provision of services by the plaintiffs to its customers for a period of two weeks until 12 August 2016.

1. The proposed plaintiffs intend to file a writ, summons and affidavit in respect of a claim for defamation and/or injurious falsehood against the defendant with the court on or before 12 August 2016 and the order that is sought in this proceeding is stated to be: 

The defendant is hereby restrained from publishing any material in connection with the provision of services by the plaintiffs to its customers for a period of two weeks until 12 August 2016.

Counsel for the proposed plaintiffs also sought a mandatory injunction requiring the defendant to remove the material that is currently posted on the website by A Current Affair.

1. The proposed plaintiffs notified the proposed defendant that this application was being made and it is represented by its solicitors, who had little opportunity to take detailed instructions and had not yet been seen the program, as it is prepared to be broadcast tonight.  However, neither party sought to adjourn the application.

1. The general principles governing the grant of an interlocutory injunction were not put in dispute in this case.  The applicant must demonstrate that there is a serious issue to be tried as to its entitlement to relief at trial. In order to satisfy that requirement, the applicant must make out a prima facie case as to its entitlement to that relief in the sense that it must show a sufficient likelihood of success at trial to justify, in the circumstances, the preservation of the status quo pending trial.  In addition, the applicant must demonstrate that if interlocutory relief is not granted, it is likely to suffer injury for which an award of damages would not be an adequate remedy and that the balance of convenience favours the grant of the injunction.[1]

   [1]Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 82 [65], 68 [19]; Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98, [108].

1. It is well established that the court has power to grant an injunction before or at trial to restrain the publication of defamatory material.[2]

   [2]Bonnard v Perryman [1891] 2 Ch 269; R v Macfarlane; Ex parte O'Flanagan (1923) 32 CLR 518, 573; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 82 [65], 68 [19].

1. There is an apparent disconnect between this originating motion seeking injunctive relief for two weeks as final relief in the proceeding and the proposed plaintiffs' entitlement to relief at trial in a proceeding for claims in defamation and injurious falsehood, which is yet to be commenced by writ. This want of a proper connection between the originating motion and a proceeding for substantive relief is apparent in at least two respects.  First, the structure of the proceedings chosen by the proposed plaintiffs is unusual. Rather than commence proceedings by a generally endorsed writ, demonstrating that the proposed plaintiffs claim not just damages for defamation and/or injurious falsehood, but also an interlocutory or a permanent injunction to restrain publication, the proposed plaintiffs have produced a draft originating motion in the terms that I have already set out.  But it is not clear that in the proceedings for defamation or injurious falsehood, the plaintiffs will seek injunctive relief or how it would be put that the relief sought in this proceeding is in support of relief to which the proposed plaintiffs would be finally entitled in a writ proceeding.

1. The second matter is that the relief sought in this proceeding is in aid of an ancillary purpose rather than the relief to be sought in the writ proceedings. Counsel for the proposed plaintiffs made clear that injunctive relief is only sought for a period of two weeks, until 12 August 2016 and he frankly conceded that the purpose of an injunction was to prevent publication to enable the proposed plaintiffs to negotiate with A Current Affair to ensure that their response to the allegations and their views about the material facts the subject of the reports were fairly presented in the ultimate broadcast. The relief presently being sought in this proceeding is effectively final relief in the proceeding. The plaintiffs will seek vindication for reputational damage if needed in another proceeding yet to be issued.

1. As an originating motion, this proceeding is not properly constituted and the relief being sought is not in aid of a final remedy. So much is apparent because the relief is not sought on an interlocutory basis until a trial to vindicate the rights to be protected by maintenance of the status quo. Although I could order that the originating motion stand as a generally indorsed writ under r 4.07, the proposed plaintiffs did not apply for such an order. Rather, their purpose was to use the processes of the court to obtain an opportunity to negotiate with the proposed defendant when it was restrained from publishing the material. The concession made about the purpose of the application in my view demonstrates that the proposed plaintiffs do not have an equity that the court might protect by injunction.[3]

   [3]Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, 216 [8].

1. That is a sufficient basis to reject the application, but I will not rest my decision on that basis alone. I am persuaded that damages are likely to be an adequate remedy, and that the balance of convenience does not favour granting the injunction sought.

1. The material before the court provides limited insight into the opportunities that have been given to the proposed plaintiffs to state their position in relation to the matters that are the subject of the report.  The embedded video contains footage of a person, who I am instructed is Mr Mifsud, the proposed second plaintiff, sitting in the driver's seat of a vehicle.  It does not appear, from that video, whether he was given any significant opportunity to comment.

1. The solicitor's letter of 25 July 2016, as I have already indicated, makes it clear that he was questioned by the reporter, because he objected to the implication of unfair or sharp practice.  That letter also puts matters before the producers of A Current Affair which might require fair consideration by them and possibly further action in relation to the report to be broadcast

1. That said, it is not possible, at this early stage, to assess the extent to which defences of justification at common law or pursuant to s 25 of the Defamation Act 2005, the defence of qualified privilege pursuant to s 30 of the Act, or the defences of honest opinion pursuant to s 31 of the Act may come into play in this proceeding.

1. Ordinarily an application for an interlocutory injunction will be refused if the publication is merely arguably defamatory.[4]  This is because the issues of whether the publication raises defamatory imputations and any questions of fact relevant to defences are pre-eminently questions for a jury and the practice of courts is to only grant an interlocutory injunction where the judge is satisfied that the publications are plainly defamatory and that a jury verdict to the contrary would be set aside as unreasonable.[5] The defendant might possibly take defences of justification, qualified privilege or honest opinion. That the plaintiffs propose to advance a claim for injurious falsehood raises the issue of malice. As Hunt J observed in Church of Scientology of California Inc v Readers Digest Services Pty Ltd[6] questions of privilege and malice cannot normally be appropriately dealt with on an interlocutory application, and that observation is apposite in this case.

   [4]Stocker v McElhinney (No 2) [1961] NSWR 1043, cited with approval by Gleeson CJ and Crennan J in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 66-68 [16]-[18]; Duthie v Nixon [2015] VSC 672, [20].

   [5]Stocker v McElhinney (No 2), [1961] NSWR 1043, 1048; Church of Scientology of California Inc v Readers Digest Services Pty Ltd [1980] 1 NSWLR 344, 349; Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153, 158.

   [6]Church of Scientology of California Inc v Readers Digest Services Pty Ltd [1980] 1 NSWLR 344, 349.

1. Again, although the defendant did not put on evidence, its counsel suggested that there may be material that will put in issue the general character of the plaintiff.  I am not in a position to draw any conclusions about such matters except to observe that a further reason why the courts exercise particular restraint in relation to injunctive relief in defamation is that the general character of the plaintiff may be an important matter in the outcome of the trial.  It may result in an award of only nominal damages or an award of a very modest sum.[7] It is a matter that cannot be appropriately assessed on an interlocutory application.

   [7]Stocker v McElhinney (No 2) [1961] NSWR 1043, 1048; Church of Scientology of California Inc v Readers Digest Services Pty Ltd [1980] 1 NSWLR 344, 349.

1. Counsel for the proposed plaintiffs took issue with this suggestion submitting that the proposed plaintiffs faced significant irreparable reputational damage likely to destroy a viable business employing staff and with significant assets. This submission is significantly overstated.  It may well be the case that if the plaintiffs succeed at trial, they could be entitled to significant damages, but the proposition that there would be an irreparable loss of a business or an earning capacity puts the likely injury too high.

1. Counsel also submitted that damages would be inadequate because of the cap applying under s 35 of the Act.  However, that submission was also misconceived. The Act caps damages for non-economic loss that may be awarded in defamation proceedings at $381,000,[8]  but the cap is limited to damages for non-economic loss while the submission of the proposed plaintiffs is that economic loss is likely to be suffered.  It, accordingly, would not be caught by that cap.

   [8]The relevant cap will be that applicable at the time that damages are awarded.

1. I am not persuaded that the potential plaintiffs’ loss sustained, in the event that they do suffer reputational damage and economic loss as a result of the defendant’s publications if that be the ultimate result in the proceeding, cannot be properly assessed.  This court on a regular basis assesses reputational damage in defamation proceedings and damages for economic loss in commercial and in personal injury proceedings. Well‑established principles apply permitting such loss to be appropriately assessed.  Further, there is nothing to indicate that any such loss could not be recovered from the defendant.

1. Accordingly, although it is sufficiently clear from the screen dumps of the material posted on the A Current Affair Facebook page, that the proposed plaintiffs may have a prima facie claim that there are imputations arising from the publication that are capable of causing reputational damage,  it is not clear to what extent the outcome of a trial would be affected by potential defences or other matters such as the actual extent of reputational damage. These matters weigh heavily against injunctive relief being justified on the basis that an injunction is the ‘course [that] appears to carry the lower risk of injustice if it should turn out to have been “wrong”, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial’.[9] 

   [9]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, 73 [35].

1. It is not disputed that the court has a discretion as to whether to grant an interlocutory injunction prohibiting publication of material alleged to be defamatory,  but the authorities make it clear that granting such injunctions should be approached ‘most cautiously and warily’.[10]

   [10]Duthie v Nixon [2015] VSC 672, [19], following National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VR 747, 763-4.

1. One basis that is advanced for caution is the importance that is placed by the community and by the law on free speech and particular difficulties arise in seeking to restrain in advance the opportunity for free speech as occurs where an injunction is sought to prevent a future publication of material that has not been placed before the court for evaluation. There are statements in the cases to the effect that free speech ought not be restrained when the preferable outcome is to require a publisher who inflicts reputational loss upon a plaintiff to pay damages.

1. In O'Neill,[11] Gleeson CJ and Crennan J approved of a statement of principle made by Walsh J, when a judge of the Supreme Court of New South Wales and before his appointment to the High Court, in Stocker v McElhinney (No 2)[12] to this effect: 

1.Although it was one time suggested that there was no power in the court, under provisions similar to those contained in [the Act governing procedure in the Supreme Court of New South Wales] to grant an interlocutory injunction, in cases of defamation, it is settled that the power exists in such cases.

2.In such cases the power is exercised with great caution and only in very clear cases. 

3.If there is any room for debate as to whether the statements complained of are defamatory, the injunction will be refused.  Indeed, it is only where, on this point, the position is so clear that in the judge's view a subsequent finding by a jury to the contrary would be set aside as unreasonable, that the injunction will go.

4.If, on the evidence before the judge, there is any real ground for supposing that the defendant may succeed upon any such ground as privilege, or of truth and public benefit, or even that the plaintiff, if successful, will recover nominal damages only, the injunction will be refused.

[11](2006) 227 CLR 57, 67‑68 [18].

[12][1961] NSWR 1043, 1048.

1. In the present circumstances, I am not persuaded that this is an exceptional case of the kind identified in the authorities.  There is, I would accept, a real possibility that the plaintiff may establish an entitlement to significant damages, but it cannot be said that the defendant's prospects of successfully defending the plaintiffs' claims are sufficiently tenuous to justify the conclusion that the position is so clear that a subsequent finding by a jury to the contrary would be set aside as unreasonable. Further, as I have stated, in my view damages will remain an adequate remedy in the circumstances.

1. For these reasons I refuse the application by the proposed plaintiffs and the originating motion to be filed will be dismissed.

1. Upon the proposed plaintiffs, by their counsel, undertaking that their solicitor will file and serve the originating motion between parties dated 29 July 2016, a draft of which has been provided to the court, the court orders that the originating motion is dismissed with costs.

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