The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 13)

[2022] NSWSC 444

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd; Morrow v Cordell Jigsaw Productions Pty Ltd (No 13) [2022] NSWSC 444

Hearing dates:

29 and 30 November, 1, 2, 3, 7, 8, 20, 21 and 22 December 2021; further submissions received
2 February, 18 and 21 March 2022

Decision date:

13 April 2022

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Breach of joint venture agreement established; breach of directors’ duties established; misleading or deceptive conduct established; publication of defamatory material established; defence of justification established in some cases but not in others; defences of qualified privilege and honest opinion not established; damages to be awarded

Catchwords:

CORPORATIONS – directors’ duties – joint venture company – joint venture to produce a consumer affairs television program for the ABC – ultimately The Checkout – whether a term of joint venture that each joint venturer would inform the other of any opportunity to produce any further series of The Checkout or any equivalent or similar consumer affairs show – whether a breach of such term – whether a breach of duty to act in good faith in the best interests of joint venture company and for a proper purpose – whether a duty to act in the best interests of shareholder of the joint venture company

MISLEADING OR DECEPTIVE CONDUCT – whether failure of one joint venturer to inform the other of negotiations with the ABC concerning new consumer affairs show constituted misleading or deceptive conduct

DEFAMATION – whether emails sent by one joint venturer to the ABC were defamatory of the other joint venturer – whether defence of justification, common law and statutory qualified privilege or honest opinion made out

Legislation Cited:

Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law

Corporations Act 2001 (Cth)

Defamation Act 2005 (NSW)

Income Tax Assessment Act 1997 (Cth)

Cases Cited:

Adam v Ward [1917] AC 309

Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225

Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354

Australian Broadcasting Corporation v Chau Chak Wing (2019) 271 FCR 632; [2019] FCAFC 125

Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634

Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2017] FCA 1047

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54

Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544

Australian Competition and Consumer Commission v We Buy Houses Pty Ltd [2017] FCA 915

Ballina Shire Council v Ringland (1994) 33 NSWLR 680

Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5

Bauer Media Pty Ltd v Wilson (No 2) (2018) 56 VR 674; [2018] VSCA 154

Becker v Smith’s Newspaper Ltd [1929] SASR 469

Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183; [1996] HCA 47

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

Bristow v Adams [2012] NSWCA 166

Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25

Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; [2000] HCA 12

Carlton & United Breweries Ltd v Tooth & Co Ltd (1986) 7 IPR 581

Charlton v Baber [2003] NSWSC 745

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; [1982] HCA 24

Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623

Crampton v Nugawela (1996) 41 NSWLR 176

Cripps v Vakras [2014] VSC 279

Cush v Dillon; Boland v Dillon (2011) 243 CLR 298; [2011] HCA 30

Daniels v Pynbland Pty Ltd (Nos 1 & 2) (1985) 4 BPR 9716

Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31; [1992] FCA 851

Digby v Financial News Ltd [1907] 1 KB 502

Domican v Pan Macmillan Australia Pty Limited [2019] FCA 1384

Fabcot Pty Ltd v Port Macquarie-Hastings Council [2011] NSWCA 167

Fairfax Digital Australia and New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77

Favell v Queensland Newspapers Pty Ltd [2005] HCA 52

Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214

Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171

Greek Herald Pty Ltd v Nikolopoulos (2001) 54 NSWLR 165; [2002] NSWCA 41

Green v Fairfax Media Publications Pty Ltd (No 4) [2021] WASC 474

Hanson-Young v Leyonhjelm (No 4) [2019] FCA 1981

Harbour Radio Pty Ltd v Tingle [2001] NSWCA 194

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546

Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1; [2003] VSCA 161

Heyman v Darwins Ltd [1942] AC 356

Holt v TCN Channel Nine Pty Ltd (2014) 86 NSWLR 96; [2014] NSWCA 90

Howden v Truth & Sportsman Ltd (1937) 58 CLR 416; [1937] HCA 74

John Fairfax Publications Pty Ltd v O’Shane [2005] NSWCA 164

Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564; [2000] FCA 1572

Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61

Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; [1989] HCA 23

Lloyd-Jones v Allen [2012] NSWCA 230

Marshall v Megna; Megna v Tory; Tory v Megna [2013] NSWCA 30

Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31

Mirror Newspaper Ltd v World Hosts Pty Ltd (1979) 141 CLR 632; [1979] HCA 3

Nationwide News Pty Ltd v Rush [2020] FCAFC 115

Oates v Consolidated Capital Services Pty Limited (2009) 76 NSWLR 69; [2009] NSWCA 183

OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120

Palmer Bruyn and Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69

Pamplin v Express Newspapers Ltd (No 2) [1988] 1 All ER 282; [1988] 1 WLR 116

Percival v Wright [1902] 2 Ch 421

Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14

Ratcliffe v Evans [1892] 2 QB 524

Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500; [1982] HCA 4

Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57

Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496

Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47

Sim v Stretch [1936] 2 All ER 1237

Skinner v Redmond Family Holdings Pty Ltd [2017] NSWCA 329

Slatyer v Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1; [1908] HCA 22

Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co [1924] 20 Ll L Rep 140

Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2003] QSC 402

Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 11) [2021] NSWSC 1477

Traderight (NSW) Pty Ltd v Bank of Queensland Ltd [2015] NSWCA 94

Tribe v Simmons (No 2) [2021] FCA 1164

Triggell v Pheeney (1951) 82 CLR 497; [1951] HCA 23

Waterhouse v Broadcasting Station 2GB Pty Ltd (1985) 1 NSWLR 58

Wilson v Bauer Media (No 6) [2017] VSC 356

Wormald v Maradaca Pty Ltd [2020] NSWCA 289

Texts Cited:

Concise Oxford Dictionary, online ed, March 2020

J D Heydon, Heydon on Contract (2019, Thomson Reuters)

J D Heydon, M J Leeming, P G Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths)

P W Young, C Croft and M Smith, On Equity (2009, Thomson Reuters)

Category:

Principal judgment

Parties:

Proceedings 2019/343896:
The Checkout Pty Ltd (First Plaintiff/Third Cross-Defendant)
Giant Dwarf Pty Ltd (Second Plaintiff/First Cross-Defendant)
Julian Francis Xavier Morrow (Third Plaintiff/Second Cross-Defendant)
Cordell Jigsaw Productions Pty Ltd (First Defendant/Cross-Claimant)
Nicholas Harvey Murray (Second Defendant)

Proceedings 2020/264993:
Julian Francis Xavier Morrow (Plaintiff)
Cordell Jigsaw Productions Pty Ltd (First Defendant)
Nicholas Harvey Murray (Second Defendant)

Representation:

Counsel:
S Chrysanthou SC with C O’Neill (Plaintiffs)
B F Katekar SC with S Jeliba (Defendants)

Solicitors:
Kay & Hughes (Plaintiffs)
Bird & Bird (Defendants)

File Number(s):

2019/343896; 2020/264993

table of contents

Two proceedings

Decision

The hearing

Dramatis personae

Credit

The role of the ABC in the proceedings

The genesis of the joint venture relationship

The terms of the Joint Venture Agreement

The alleged implied term of the Joint Venture Agreement

The nature of Mr Morrow’s duties as director of the Joint Venture Company

Mr Murray’s and Cordell Jigsaw’s case concerning Mr Morrow’s breaches of duty

Common ground that Mr Morrow and Mr Murray were free to develop and produce consumer affairs shows other than The Checkout or shows equivalent or similar to The Checkout?

The decision of the ABC to place The Checkout on “hiatus” and Mr Morrow’s reaction

Further discussions for a possible new “consumer show”

The Post, Digital and Visual Effects Offset determination

Mr Morrow’s discussions with the ABC continue

Mr Morrow consults Giant Dwarf’s accountants

The 13 February 2019 meeting at the ABC

Mr Morrow resumes contact with Mr Murray

The 19 February 2019 meeting at the Duck Inn

Did Mr Morrow say words to the effect that he would not make The Checkout again with Mr Murray?

Did Mr Morrow say words to the effect that he no longer wished to work in television?

Did Mr Morrow say words to the effect that it would make “more sense” for Giant Dwarf to make any new consumer affairs show the ABC proposed or that it would be better if “we” found a way to make The Checkout again?

Events following the Duck Inn Meeting

22 February 2019 meeting

An “agreement in principle”?

Mr Fraser’s draft response to Mr Morrow and Ms Crouch

Mr Morrow’s discussions with the ABC continue

Further communications with Mr Murray

The 8 March 2019 meeting at the ABC

Mr Fraser’s 8 March 2019 email

The “New Consumer Show” – Are You Being Served

Events after 8 March 2019

The “New Consumer Show” may be called “[The] Checkout”

The events of 28 March 2019

29 March 2019

Mr Morrow’s 1 April 2019 conversation with Ms Waite and Ms Pincus

The Share Sale Agreement

Events immediately following execution of the Share Sale Agreement

There was an opportunity to produce a further series of The Checkout

Mr Morrow and Giant Dwarf did not inform Mr Murray and Cordell Jigsaw of that opportunity and sought to divert that opportunity for their benefit

Breach of the implied term of the Joint Venture Agreement

Breach of Mr Morrow’s duty as a director of the Joint Venture Company

To the Joint Venture Company

To Cordell Jigsaw

Mr Morrow’s and Giant Dwarf’s alleged misleading or deceptive conduct

The “Motivation Representation”

Misrepresentation by silence

Causation

Misleading or deceptive conduct by Mr Murray and Cordell Jigsaw

Events following the execution of the Share Sale Agreement

Mr Murray hears of The Checkout series seven

The first allegedly defamatory communication – Mr Murray’s 21 May 2019 email to Mr Anderson and Mr Carrington

The second allegedly defamatory communication – Mr Murray’s 11 June 2019 conversation with Ms Pincus

The third allegedly defamatory communication – Mr Murray’s 12 June 2019 email to Ms Pincus and Ms Chapman

The events leading to the purported termination of the Share Sale Agreement

Repudiation?

Principles

Breach of cl 5.3 of the Share Sale Agreement?

Breach of cl 9.7 of the Share Sale Agreement?

Conclusion

Settlement discussions

The fourth allegedly defamatory communication – Mr Murray’s 20 June 2019 email to Mr Carrington

5 July 2019 – the ABC terminates discussions concerning The Checkout

The fifth allegedly defamatory communication – Mr Murray’s 5 July 2019 email to Ms Carnabuci

The sixth allegedly defamatory communication – Mr Murray’s 12 August 2019 email to Ms Gilchrist

The mediation

“The Help Desk” negotiations

The alleged injurious falsehoods

Defamation

Mr Murray’s 21 May 2019 email to Mr Anderson

The meaning conveyed

Justification?

Mr Murray’s 11 June 2019 statement to Ms Pincus

Meaning conveyed

Justification?

Mr Murray’s 12 June 2019 email to Ms Pincus

Meaning conveyed

Justification?

Statutory qualified privilege?

Common law qualified privilege?

Honest opinion?

Mr Murray’s email to Mr Carrington of 20 June 2019

Meaning conveyed

Justification?

Other defences

Mr Murray’s email to Ms Carnabuci of 5 July 2019

Meaning conveyed

Justification?

Other defences

Mr Murray’s email to Ms Gilchrist of 12 August 2019

Meaning conveyed

Justification?

Other defences

Conclusions as to the six allegedly defamatory communications

Damages

Malice

The “grapevine effect”

Prior good reputation

Damage to reputation

Hurt to feelings

Aggravated damages

Failure to apologise

Maintenance of the defence in relation to the allegations of fraud

Mr Murray’s “campaign”

Maintenance of a bad reputation case

The manner in which Mr Morrow was cross-examined

Communications with the media

The incident involving Ms Agzarian

Economic loss

Quantum

Interest on damages

Injunction

Injurious falsehood

First allegedly false representation

Second allegedly false representation

Third allegedly false representation

Fourth allegedly false representation

Fifth allegedly false representation

Sixth allegedly false representation

Seventh allegedly false representation

Eighth allegedly false representation

Ninth allegedly false representation

Tenth allegedly false representation

Eleventh allegedly false representation

Twelfth allegedly false representation

Thirteenth allegedly false representation

Fourteenth allegedly false representation

Fifteenth allegedly false representation

Conclusion concerning injurious falsehood

The Joint Venture Company’s and Giant Dwarf’s claim for damages for breach of the Share Sale Agreement

Remedies claim by Cordell Jigsaw

Conclusion

Judgment

1. Mr Julian Morrow is a television writer, performer and producer.

2. Mr Nicholas Murray is also a television producer.

3. Both Mr Morrow and Mr Murray are legally qualified, although neither is currently in practice as a lawyer.

4. In December 2010, Mr Morrow and Mr Murray agreed to work together on a consumer affairs television program.

5. That project ultimately led to the consumer affairs television series “The Checkout”.

6. It was a success.

7. But during 2019 Mr Morrow and Mr Murray fell out. Bitterly.

8. These proceedings are about the consequences of that falling out.

9. In late 2010 and early 2011 Mr Morrow and Mr Murray agreed to engage in a joint venture to produce a consumer affairs television program; ultimately The Checkout (the “Joint Venture Agreement”).

10. On or about 23 January 2012, Mr Morrow and Mr Murray caused companies of which they were both directors and shareholders, Giant Dwarf Pty Ltd and Cordell Jigsaw Pty Ltd respectively, to form a company then known as Jigsaw Dwarf Pty Ltd, and later known as The Checkout Pty Ltd (the “Joint Venture Company”).

11. Their intention was that, for the purposes of the Joint Venture Agreement, the Joint Venture Company be the special purpose vehicle to produce a proposed consumer affairs television series.

12. Each of Giant Dwarf and Cordell Jigsaw held 50% of the shares in the Joint Venture Company. Mr Morrow and Mr Murray were its sole directors. From around January 2014, Mr Morrow and Mr Murray agreed that the profits derived by the Joint Venture Company would be paid as to 60% to Giant Dwarf and as to 40% to Cordell Jigsaw.

13. During 2014 drafts of a “Shareholders Agreement” were circulated, but never executed.

14. The Joint Venture Company produced six series of The Checkout for the Australian Broadcasting Corporation (“ABC”) between 2013 and 2018. The last episode of The Checkout (episode 12 of series 6) was aired on the ABC in April 2018.

15. In July 2018, the ABC informed Mr Morrow and Mr Murray that it proposed to place The Checkout “on hiatus” and that it did not propose to commission the Joint Venture Company to produce a seventh series, at that time.

16. From July 2018, Mr Morrow sought to persuade the relevant executives of the ABC to change their minds about that decision.

17. During the same period, and against the possibility that the ABC refused to change its position about this matter, Mr Morrow also discussed with the ABC executives the possibility of his company, Giant Dwarf, producing a “new” consumer affairs program. On 8 March 2019, Mr Morrow pitched to the ABC a proposed consumer affairs show called “Are You Being Served?”.

18. Between February and April 2019 Mr Morrow negotiated with Mr Murray concerning the possible sale by Cordell Jigsaw to Giant Dwarf of its interest in the Joint Venture Company.

19. Those negotiations culminated in the execution on 8 April 2019 by Giant Dwarf and Cordell Jigsaw of a “Share Sale Agreement”. By this agreement Cordell Jigsaw sold its shares in the Joint Venture Company to Giant Dwarf for $50 and on terms that included a payment be made by the Joint Venture Company to Cordell Jigsaw of 2% of the Joint Venture Company’s “cash budget” on any further series of The Checkout produced by the Joint Venture Company, Giant Dwarf or any affiliated company.

20. During those negotiations, Mr Morrow did not mention to Mr Murray that he was, at the same time, in effect negotiating with the ABC to re-badge his proposed Are You Being Served program as the seventh series of The Checkout, subject only to a successful culmination of his negotiations with Mr Murray concerning Cordell Jigsaw’s shares in the Joint Venture Company.

21. Immediately after the Share Sale Agreement was executed, and Cordell Jigsaw had transferred its shares in the Joint Venture Company to Giant Dwarf, the Joint Venture Company, now controlled by Mr Morrow, sought to negotiate a seventh series of The Checkout with the ABC.

22. Mr Murray became aware of these negotiations and, unbeknownst to Mr Morrow, commenced email communications with ABC executives.

23. Mr Morrow alleges that these email communications, and one conversation between Mr Murray and an ABC executive, were defamatory of him and that these, and later emails, constituted injurious falsehoods against the Joint Venture Company, Giant Dwarf and Mr Morrow.

24. Immediately after it received the first of these email communications, the ABC informed Mr Morrow that a condition of commissioning any further series of The Checkout was the execution by Mr Murray and Cordell Jigsaw of a “Quit Claim Deed” under which, in effect, Mr Murray and Cordell Jigsaw released the Joint Venture Company and the ABC from any claim concerning any further series of The Checkout. The ABC did not inform Mr Morrow of Mr Murray’s email, or the later emails Mr Murray sent. Mr Morrow did not become aware of them until discovery in these proceedings.

25. Between 30 May 2019 and 13 June 2019, Mr Morrow asked Mr Murray to cause Cordell Jigsaw to execute the Quit Claim.

26. Mr Murray refused.

27. On 28 June 2019, the Joint Venture Company and Giant Dwarf purported to terminate the Share Sale Agreement on the basis of Cordell Jigsaw’s alleged repudiation of it.

Two proceedings

28. In those circumstances, Mr Morrow has caused two sets of proceedings to be instituted against Mr Murray and Cordell Jigsaw.

29. In the first proceedings (the “Commercial Proceedings”) the Joint Venture Company, Giant Dwarf and Mr Morrow, allege that:

1. by refusing to execute the Quit Claim, Cordell Jigsaw breached the Share Sale Agreement causing loss to the Joint Venture Company and to Giant Dwarf;

2. by failing to comply with a representation that they would abide by the Share Sale Agreement, Cordell Jigsaw and Mr Murray engaged in misleading or deceptive conduct for the purposes of s 18 of the Australian Consumer Law; [1]

3. Cordell Jigsaw and Mr Murray published injurious falsehoods that injured the Joint Venture Company, Giant Dwarf and Mr Morrow; and

4. Cordell Jigsaw and Mr Murray breached a Mediation Agreement following an unsuccessful mediation in 2019, as a result of an unauthorised disclosure of confidential information.

   1. Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law.

30. In the Commercial Proceedings, Mr Murray and Cordell Jigsaw, by Cross Summons, allege that:

1. Giant Dwarf acted in breach of an implied term of the Joint Venture Agreement that it would inform Cordell Jigsaw of any opportunity to produce a further series of The Checkout, or any equivalent or similar consumer affairs show;

1. Giant Dwarf engaged in misleading or deceptive conduct by failing to inform Cordell Jigsaw of its negotiations with the ABC concerning a further series of The Checkout; and

2. in causing Giant Dwarf to act this way, Mr Morrow acted in breach of his duties as a director of the Joint Venture Company.

31. In the second proceedings (the “Defamation Proceedings”) Mr Morrow seeks damages from Mr Murray and Cordell Jigsaw by reason of the allegedly defamatory statements made by Mr Murray and Cordell Jigsaw in the emails and conversation to which I referred.

32. As I have said, Mr Morrow only became aware of these communications during discovery in the Commercial Proceedings.

33. I heard both proceedings together, with evidence in one being evidence in the other.

34. Neither Mr Morrow nor Mr Murray elected under s 21 of the Defamation Act2005 (NSW) for the Defamation Proceedings to be tried by a jury.

35. It is common ground that, by reason of the dates of publication of the allegedly defamatory material, I must apply the provisions of the Defamation Act as they stood prior to the amendments made effective on 1 July 2021.

Decision

36. I find that:

1. it was an implied term of the Joint Venture Agreement that each joint venturer would inform the other of any opportunity to produce a further series of The Checkout, or any equivalent or similar consumer affairs show;

2. Mr Morrow caused Giant Dwarf to act in breach of that implied term;

3. Mr Morrow thereby acted in breach of his duties as a director of the Joint Venture Company;

4. by not informing Mr Murray of his dealings with the ABC during March and April 2019, Mr Morrow engaged in misleading or deceptive conduct;

5. Mr Murray and Cordell Jigsaw have thereby made out the claims at [29] and have established an entitlement to an order under s 237 of the Australian Consumer Law that the Share Sale Agreement be rescinded;

6. Mr Morrow, Giant Dwarf and the Joint Venture Company have failed to make out the claim at [29(a)] and [29(b)] and have failed to establish any damage arising from the matters at [29(c)] and [29(d)];

7. Mr Morrow has established that the statements made in the impugned publications were defamatory of him;

8. Mr Murray has made out the defence of justification in relation to two of the publications.

9. Mr Murray has not made out the defence of qualified privilege or opinion in relation to any of the publications;

10. Mr Morrow has not established that he suffered any economic loss by reason of the defamatory publications;

11. Mr Morrow is entitled to general and aggravated damages in relation to the defamatory publications in the sum of $35,000;

12. Mr Morrow and Giant Dwarf have established that some of Mr Murray’s communications contained injurious falsehoods; and

13. Mr Morrow and Giant Dwarf have not established that they suffered any economic loss by reason of those injurious falsehoods.

The hearing

37. The hearing was conducted, in person, over 10 days.

38. Ms Chrysanthou SC appeared with Mr O’Neill for Mr Morrow and his related companies. Mr Katekar SC appeared with Ms Jeliba for Mr Murray and his related company. [2]

    2. For convenience, and without intending any disrespect to Mr O’Neill and Ms Jeliba, I will henceforth refer only to Ms Chrysanthou and Mr Katekar.

39. I was greatly assisted by the efficient manner in which counsel, and their instructing solicitors, conducted the case in accordance with the protocols then applicable concerning the Covid-19 pandemic.

40. I was also greatly assisted by the extensive oral and written submissions received at the conclusion of the evidence, and then after judgment was reserved. Much of what appears below, especially as to uncontroversial background matters, is taken with gratitude from those submissions.

Dramatis personae

41. In the course of explaining what has happened between Mr Morrow and Mr Murray, it is necessary to refer to a large number of individuals working for Giant Dwarf, Cordell Jigsaw and the ABC.

42. To assist the reader, I attach a dramatis personae prepared by the parties which records the positions held by the relevant persons at these companies.  [42] Dramatis Personae (152656, pdf)

Credit

43. Ms Chrysanthou and Mr Katekar both developed detailed submissions to the effect that the evidence given by Mr Murray and Mr Morrow, respectively, was unsatisfactory, evasive and unresponsive.

44. Despite the length, and vehemence, of those submissions, I do not see this as a case that turns on the credit of either Mr Morrow or Mr Murray.

45. Most of the communication relevant to the issues I must decide were in writing, primarily by email between Mr Morrow and Mr Murray on the one hand, and officers of the ABC on the other.

46. There is some difference in the recollections of Mr Morrow and Mr Murray concerning a conversation they had on 19 February 2019 at the Duck Inn in Chippendale (the “Duck Inn Meeting”), but I am able to resolve those differences otherwise than by reference to Mr Morrow’s and Mr Murray’s credit.

47. I am, in any event, conscious of the restraint I should exercise in forming a view about the credibility of Mr Morrow and Mr Murray based on their demeanour when giving evidence. Giving evidence is a stressful, alien experience for most people. I have in mind Atkin LJ’s familiar aphorism that “an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of the evidence with known facts, is worth pounds of demeanour”. [3]

    3. Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (1924) 20 Ll L Rep 140 at 152.

48. I must weigh my impressions as to demeanour “carefully against the probabilities” and “examine whether the disputed evidence is consistent with the incontrovertible facts”. [4]

    4. Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 at [27] (Ipp JA; Mason P and Tobias JA agreeing).

49. Nonetheless, as cross-examination of each of Mr Morrow and Mr Murray took place over a number of days, I had a lengthy period during which to observe the manner in which they gave their evidence.

50. As I set out below, there are some important aspects of their evidence, particularly that of Mr Morrow, that I have been unable to accept.

51. To the extent that I do not accept particular aspects of the evidence given by Mr Morrow or Mr Murray I will deal with that at the appropriate point in these reasons.

The role of the ABC in the proceedings

52. Although Mr Morrow’s and Mr Murray’s communications with the ABC are central to the dispute, neither party called any officers of the ABC as witnesses in the proceedings.

53. The ABC produced 31 packets of documents in response to the subpoenas from both parties. During argument on an interlocutory application on 14 December 2020, I was informed that the ABC had produced over 5,000 documents in response to the subpoenas. I was also informed that, leaving aside the time taken to search for the documents, the ABC has spent some 135 hours reviewing the documents sought and producing them to the Court. [5]

    5. See my judgment of 16 November 2021, The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 11) [2021] NSWSC 1477.

54. The Court Book included a large number of emails produced by the ABC to and from Mr Morrow and Mr Murray, many internal emails between officers of the ABC, as well as notes taken by ABC officers of conversations with Mr Morrow.

55. I admitted those documents only as evidence that documents in that form were within the records of the ABC. Thus, the documents themselves do not stand as evidence of the truth of what is recorded. But inferences are available from a number of them and, on occasions, other evidence points to the probability that what was recorded in the ABC documents was the true position.

56. I will set out my conclusions as to what can be drawn from particular ABC documents during my consideration of the course of events.

The genesis of the joint venture relationship

57. For a number of years prior to 2010 Mr Murray had communications with the ABC and with the Australian Consumers Association about the possibility of the ABC commissioning a consumer affairs show.

58. In late 2010, Mr Morrow approach Mr Murray about the possibility of collaborating on such a program.

59. In December 2010, Mr Morrow and Mr Murray met at a bar in Surry Hills and “shook hands on the idea of Giant Dwarf and Cordell Jigsaw working together on a consumer affairs TV show project”. [6]

    6. The words used in Mr Murray's first affidavit.

60. Neither Mr Murray nor Mr Morrow gave an account in their affidavits as to what was said at this meeting. However, they each said they “agreed on” and “shook hands on” the idea of Giant Dwarf and Cordell Jigsaw working together on “a consumer affairs TV show project”.

61. The only contemporaneous record of what was agreed is in an email exchange between Mr Morrow and Mr Murray on 15 December 2010 as follows:

“[Mr Morrow]:   … just recapping the outcome of our chat … we … shook on the idea of [Giant Dwarf [7] ]/Jigsaw venture project done on the basis of decisions by agreement, revenue 50/50, with some of the agreed decisions being that I’d host (with co-host question up for grabs), we’d jointly [Executive Produce].

[Mr Murray]:   ok – we’ll have play”.

7. Then known as “Polar”.

62. Mr Morrow and Mr Murray had further email exchanges between 17 March 2011 and 8 April 2011.

63. On 17 March 2011, Mr Morrow wrote to Mr Murray saying that “I’ve been thinking about the show” and raised the possibility of creating “a new entity just for this program”. It was implicit in this email that “the” show and “this” program would be one produced for the ABC.

64. On 24 March 2011, Mr Murray wrote to Mr Morrow about “setting up a [Special Purpose Vehicle] with each owning 50%”.

65. Mr Morrow replied on 8 April 2011 saying that “perhaps a [joint venture] is a way to go. It’s probably best that our ‘everything by agreement’ and ‘50/50 on everything’ arrangement is reflected in the formalities, which suggests a [joint venture]”.

66. These communications suggest that what was contemplated by Mr Morrow and Mr Murray was the establishment of a special purpose vehicle to conduct a joint venture which would have the single purpose of pitching, and hopefully producing, a consumer affairs program for ABC television.

67. This was the genesis of the Joint Venture Agreement.

68. Mr Murray gave unchallenged evidence that:

“Between March 2011 and June 2011, Cordell Jigsaw and [Giant Dwarf] developed and pitched a television show to the ABC called ‘The Fair Cop’ (working title) which was renamed ‘The Checkout’ after discovering that the word Fair Cop had been trademarked by Nine Network Australia Pty Ltd”.

69. The Joint Venture Company was incorporated on 23 January 2012 to give effect to this arrangement. As I have said, Mr Morrow and Mr Murray were the sole directors of the Joint Venture Company and Giant Dwarf and Cordell Jigsaw were its equal shareholders.

70. On 26 June 2012, the Joint Venture Company signed its first ABC Production and Licence Agreement for what became known as the first series of The Checkout.

71. After series one was produced, Giant Dwarf and Cordell Jigsaw agreed to change the revenue split from 50/50 to 60/40. Mr Morrow and Mr Murray evidently saw this as better reflecting their contributions to the venture. The shareholding in the Joint Venture Company remained the same.

72. Thus, on 24 January 2014, Ms Katie Shortland, Head of Business Affairs at Cordell Jigsaw sent Mr Morrow a “1 pager” giving effect to that agreement. Mr Morrow agreed to that document in May 2015.

73. Also on 24 January 2014, Ms Shortland circulated a draft “Shareholders Agreement”.

74. Proposed cl 2.1 of that document stated:

“The objective of the Shareholders in establishing the Company is to conduct a profitable business providing the development, production and marketing of television projects and related rights.”

75. Proposed cl 3.1(1) provided that:

“The Shareholders agree that the Company will carry on the Business in the following way:

(1) the Company will be operated to procure the development, production and marketing of television projects and related rights…”.

76. “Business” was defined to mean “the Company’s business of developing and producing television projects and any other business approved under clause 9.1” (which clause required a unanimous resolution of shareholders).

77. Mr Murray agreed in cross-examination that the statement of objectives in proposed cl 2.1 was too broad and that “it probably should be limited to … consumer affairs programs to the ABC”.

78. Clause 28.1 provided:

“This Agreement does not create or evidence a partnership, joint venture or a fiduciary relationship or the relationship of principal and agent between the parties.”

79. Mr Morrow made no response to this draft until two years later, in January 2016.

80. On 12 January 2016, Mr Morrow sent Mr Murray and Ms Shortland a “markup of the shareholder’s agreement” in which he suggested that cl 2.1 be changed to read:

“The objective of the Shareholders in establishing the Company to conduct a profitable business providing the development, production and marketing of the satirical consumer affairs television program The Checkout.”

81. Mr Morrow also proposed that cl 3.1(1) refer only to The Checkout rather than to “television projects”; he did not suggest any change to the definition of “Business”.

82. Mr Morrow’s proposed changes to cll 2.1 and 3.1 appear to have reflected the reality of the situation, namely, that the Joint Venture Company was engaged in only one project, being successive series of The Checkout.

83. Mr Morrow suggested no change to cl 28.

84. Clause 28 is a peculiar provision.

85. Mr Murray agreed in cross-examination that it was “the standard clause that we would put in these kind of agreements”. On behalf of Mr Morrow, Ms Chrysanthou relied on this clause to show that Giant Dwarf and Cordell Jigsaw (and thus Mr Morrow and Mr Murray) agreed that there was no fiduciary relationship between Giant Dwarf and Cordell Jigsaw either as shareholders in the Joint Venture Company, or at all.

86. But cl 28 also recites that the proposed Shareholder Agreement would not create “a joint venture … between the parties”. A matter that is agreed in the proceedings is that Mr Morrow and Mr Murray did establish a joint venture between Giant Dwarf and Cordell Jigsaw. There is no suggestion in the proceedings that the circulation of the drafts of the Shareholders Agreement was intended to alter that fundamental aspect of the arrangement. That suggests to me that proposed cl 28 was included in the drafts as a “boilerplate” provision and was not intended by either Mr Morrow nor Mr Murray to reflect or record their relationship as joint venturers.

87. Ultimately, as the parties did not execute the Shareholders Agreement, the provision casts little, if any, light on the nature of their arrangement as joint venturers.

88. Mr Murray made no response to Mr Morrow’s 12 January 2016 proposed “markup” of the Shareholders Agreement and neither Giant Dwarf nor Cordell Jigsaw executed either version of the Shareholders Agreement. There was thus no finalised written agreement between the two parties as to the precise scope of the joint venture. In particular, there is no express agreement as to whether it extended beyond The Checkout.

89. As I have said, the Joint Venture Company produced six series of The Checkout for the ABC between 2013 and 2018: the last episode of which was aired in April 2018.

90. Over that period, Mr Murray and Cordell Jigsaw played an increasingly minor role in the production of the series. Mr Morrow became the primary point of contact with the ABC for the show. Mr Morrow had responsibility for all day-to-day creative, legal, editorial and production issues in relation to series four, five and six of the show. Mr Murray had little active involvement in these latter series. Indeed, Mr Murray agreed he did not speak to Mr Morrow about The Checkout at all between July 2017 and April 2018; although he then sent a note of congratulations to Mr Morrow about the sixth series of The Checkout. In effect, Giant Dwarf took over the running of the Joint Venture Company from series 4 onwards.

91. This caused some friction between Mr Morrow and Mr Murray.

92. In November 2015, Mr Morrow offered to buy out Cordell Jigsaw’s interest in the joint venture for $200,000.

93. That offer was not accepted. Thus, on 3 December 2015, Mr Murray sent a memo to Mr Morrow:

“Thanks for the kind offer, but as I said last week, we are not interested in exiting the Checkout/Jigsaw Dwarf JV.

We have always been thrilled to be involved in this program and I have approached the relationship in good faith all along.

When you approached us about co-pitching this show, I expected the production will be more of a cooperative process. When it became apparent you wanted to run the show your way despite my ongoing observations about the potential efficiency gains to be made from a more traditional production method, we were happy to take a hands off approach. As we discussed the other day, while it is frustrating for me to be ignored in the way I am on this show, I am happy to continue my involvement.”

94. Nonetheless, the series were profitable. Cordell Jigsaw earned about $170,000 from series three in 2015, $175,000 from series four in 2016, and $187,000 from each of series five in 2017 and series six in 2018. Mr Morrow calculated that Cordell Jigsaw was paid a little over $1 million from series one to six. He described it as the “worst deal I’ve ever done”.

95. At around this time, Mr Murray assumed that Mr Morrow was negotiating with the ABC for the seventh season.

The terms of the Joint Venture Agreement

96. On the pleadings [8] it is common ground that in the circumstances I have described:

1. in late 2010 Giant Dwarf and Cordell Jigsaw agreed to collaborate for the purpose of creating a consumer affairs television show for the ABC;

2. the parties thereby entered into the Joint Venture Agreement; and

3. it was a term of the Joint Venture Agreement that all decisions were to be made by agreement.

   8. That is, the Amended Commercial Cross-Claim List Statement and Amended Commercial List Response to Cross-Claim; not technically “pleadings” as proceedings in the Commercial List are not commenced by Statement of Claim; but convenient to be referred to as such.

97. Giant Dwarf and Mr Morrow contend that there were further terms of the Joint Venture Agreement that:

1. Giant Dwarf and Cordell Jigsaw were to be credited equally as production companies;

2. Mr Morrow and Mr Murray were to be Executive Producers;

3. Mr Morrow was to be the host of the program;

4. the “Producer Overhead” from each series budget was to be divided equally between Giant Dwarf and Cordell Jigsaw; [9] and

5. any revenue received in connection with the show, apart from the budget to produce a show or related project, was to be divided equally [10] between Giant Dwarf and Cordell Jigsaw.

   9. The pleading refers to the Joint Venture Company, but it is clear this is a mistake and that the reference should be to Cordell Jigsaw.

   10. Later 60/40.

98. I do not understand any of these matters to be disputed.

99. In their Cross-Claim List Statement Mr Murray and Cordell Jigsaw also contended that:

1. the common intention and agreement between Cordell Jigsaw and Giant Dwarf in establishing the Joint Venture Company was that it was a vehicle to develop, produce and market a consumer affairs television series;

2. Mr Morrow was appointed as one of the two directors of the Joint Venture Company as a representative of Giant Dwarf; and

3. Mr Murray was appointed as the other director of the Joint Venture Company as a representative of Cordell Jigsaw.

100. In their Cross-Claim Response, Mr Morrow and Giant Dwarf admitted these matters and asserted that the Joint Venture Company “was incorporated as a special purpose vehicle to produce for the ABC the consumer affairs television series that later became known as The Checkout”.

100. In these circumstances, and in the light of evidence I have set out, I find that:

1. there was a joint venture between Giant Dwarf and Cordell Jigsaw;

2. the sole purpose of the joint venture was to pitch and, if successful, produce a consumer affairs show, ultimately The Checkout, for the ABC;

3. it was a term of the joint venture that decisions would be made between Mr Morrow and Mr Murray by agreement and thus, in effect, that each shareholder had a power of veto in relation to any decision; [11] and

4. each of Giant Dwarf and Cordell Jigsaw could determine whether the Joint Venture Company continued to produce The Checkout for the ABC.

   11. In closing submissions it was suggested, for the first time, on behalf of Mr Murray and Cordell Jigsaw that the right of veto related only to “creative” decisions; that proposition was not earlier suggested, pleaded or put to Mr Morrow; I see no basis for it in the evidence and do not accept it.

102. It follows from these findings that there was a potential for deadlock between Giant Dwarf and Cordell Jigsaw, and thus, in effect, between Mr Morrow and Mr Murray, if either decided that he no longer wished to produce The Checkout within the joint venture. As I set out below, Mr Morrow’s case is that this was his position as at February 2019; that is, that he no longer wished to produce The Checkout so long as Cordell Jigsaw, and thus, in effect, Mr Murray, remained his joint venturer. There was no agreed mechanism for resolving any such deadlock. For practical purposes, the only means by which such a deadlock could be resolved would be for one of the joint venturers to buy out the other.

The alleged implied term of the Joint Venture Agreement

103. Cordell Jigsaw and Mr Murray contend that it was an implied term of the joint venture that each joint venturer would inform the other of any “opportunity” to produce a further series of The Checkout, or a similar show, and to cause the joint venture to have the benefit of that opportunity.

104. A critical question in the proceedings is whether there was any such implied term in the Joint Venture Agreement.

105. If there was, this has significant implications for Cordell Jigsaw’s and Mr Murray’s case against Giant Dwarf and Mr Morrow concerning Giant Dwarf’s alleged breach of the Joint Venture Agreement, Mr Morrow’s alleged breach of his duty as a director of the Joint Venture Company and Mr Morrow’s and Giant Dwarf’s alleged engagement in misleading or deceptive conduct.

106. Cordell Jigsaw and Mr Murray pleaded the implied term as follows:

“At least from 26 June 2012 until 8 April 2019, it was a term of the JV Agreement that Giant Dwarf and Cordell Jigsaw would:

a. cooperate and do such things as are necessary to enable the other party to have the benefit of the JV Agreement;

…

b. inform the other party of any opportunity to produce any further series of The Checkout (or any equivalent or similar consumer affairs program) for the ABC;

c. direct any such opportunity to their joint venture company incorporated for that purpose, being [the Joint Venture Company];

d. not to divert or week to capture any such opportunity for their personal benefit and to the exclusion of the other”.

107. In closing submissions, Ms Chrysanthou did not dispute the term concerning cooperation referred to in subpar (a) of the previous paragraph.

108. As to the terms alleged in subpars (b) to (d), it was common ground that such a term could only be implied into the Joint Venture Agreement if the five familiar requirements established by the authorities were made out namely that the proposed implied term was: [12]

     12. BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 282-283; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; [1982] HCA 24 at 347 (Mason J; with Stephen J at 344, Wilson J at 392 and Brennan J at 404 agreeing).

1. reasonable and equitable;

2. necessary to give business efficacy to the contract;

3. so obvious that it “goes without saying”;

4. capable of clear expression; and

5. not contradictory of any express term of the contract.

109. As to whether the posited implied term was reasonable and equitable, Ms Chrysanthou accepted that the term “may be equitable” but submitted that the term was “not reasonable because it unreasonably neutered each of the joint venturers”.

110. That submission was not developed.

111. Giant Dwarf and Cordell Jigsaw were independent television producers that were otherwise in competition with each other. It is no part of Mr Murray’s case that he and Mr Morrow could not, concurrently with the joint venture between them, produce consumer affairs television programs other than The Checkout.

112. Each of Mr Morrow and Mr Murray acted as if they could, during the life of the joint venture, pitch and promote consumer television programs other than The Checkout. Mr Morrow stated, in terms, in cross-examination that:

“… my understanding of the arrangement with [the Joint Venture Company] and Cordell Jigsaw was that either party was able to make a new project, it always had been”.

113. As I set out below, Mr Murray was, evidently, of the same opinion.

114. An implied term of the kind advocated for by Mr Murray would not hinder or “neuter” such activity, as long as the proposed consumer affairs show was not The Checkout itself or an “equivalent” or “similar” show.

115. The posited implied term would prevent Mr Morrow and Mr Murray pitching or producing a show able to be, or intended or designed to be, a substitute for The Checkout or a show actually to be called The Checkout.

116. But it would not “unreasonably neuter” the joint venturers.

117. As to whether the posited term was reasonably necessary to give business efficacy to the Joint Venture Agreement, Ms Chrysanthou simply asserted that it was “completely unnecessary” to imply the term, evidently because the Joint Venture Agreement “operated for 6 seasons” without the need for either party to resort to it.

118. However, until the events with which these proceedings are concerned occurred, there was no cause to consider whether there was any term implied into the Joint Venture Agreement of the kind now suggested by Mr Murray.

119. The Joint Venture Company was established for the sole purpose of pitching and producing the show that became The Checkout. If either party could, without informing the other, take advantage of an opportunity to produce a further series of The Checkout or an equivalent or similar show, and thus in effect step outside the joint venture by taking advantage of that opportunity for themselves, it would render nugatory the Joint Venture Agreement. Thus, the posited implied term is, in my opinion, necessary to give business efficacy to the Joint Venture Agreement.

120. As to whether the posited term was so obvious that it went without saying, Ms Chrysanthou submitted that it was “not so obvious as to go without saying in light of the fact that the very structure of the joint venture could throw up a deadlock that could continue for the rest of … [the] mercantile endeavour”.

121. It is true, as I have set out above, that there was no express mechanism for resolving any deadlock that might arise if either Mr Morrow or Mr Murray vetoed production by the Joint Venture Company of any further series of The Checkout. In that event, unless either joint venturer bought the other out, the Joint Venture Company would not produce any further series.

122. But I do not see how it follows from this that the posited term was not obvious. It is directed to a different situation namely, relevantly to this case, one where one party purported to exercise the right of veto against the Joint Venture Company from producing a further series of The Checkout but, allegedly, was given an opportunity to produce a further series of the same show, or an equivalent or similar show.

123. If there were no such term of the Joint Venture Agreement then if, at any stage, an opportunity arose for a further series of The Checkout, or of a show equivalent or similar to The Checkout to be produced, then either joint venturer could veto the Joint Venture Company from pursuing the opportunity and, without informing the other, step outside the joint venture and themself take the benefit of that opportunity.

124. There is an issue in this case as to whether any such opportunity in fact arose. But I think it obvious that the parties intended that if that occurred the opportunity would be directed to the Joint Venture Company and not be appropriated by the party that had exercised the right of veto.

125. The matter may be tested this way. If, at their meeting in December 2010, Mr Murray had asked Mr Morrow whether, following six successfully produced series of the proposed consumer affairs show for the ABC, either one had vetoed further production but had then been approached by the ABC to produce a further series of the same or an equivalent or similar show, it would be open to that person to exploit that opportunity himself, what would Mr Morrow’s response have been? It is obvious that a reasonable person in Mr Morrow’s position would have responded: “of course not”.

126. As to whether the posited term is capable of clear expression, Ms Chrysanthou submitted that the expressions “opportunity”, “consumer affairs program”, “equivalent” and “similar” were ambiguous and that “the Court cannot imply to a contract an uncertain term”.

127. I see no uncertainty about these expressions. It may be that nice factual questions will arise as to whether they are established in this case. But the Court is well accustomed to dealing with such matters. It is, of course, for Mr Murray and Cordell Jigsaw to establish that the implied term has been engaged.

128. Finally, as to whether the posited term is contradictory of an express term of the Joint Venture Agreement, Ms Chrysanthou submitted that the term contradicted the express term of the Joint Venture Agreement “being the production of a singular show for the ABC … by requiring concepts for any equivalent or similar consumer affairs program to also be brought to the joint venture”.

129. I see no inconsistency between it being the object of the joint venture that the joint venturers produce a “singular” show and for it to be a term of the Joint Venture Agreement that the joint venturers direct any opportunity to produce further series of that “singular” show, or any equivalent or similar consumer affairs program, to the joint venture.

130. Ms Chrysanthou also submitted that the posited implied term would be inconsistent with the express “all things by agreement” term because “this was not agreed”. The express term to which Ms Chrysanthou referred was that all decisions concerning the joint venture be made by agreement. Again, I see no inconsistency between that term and a term ensuring that further opportunities to produce the show for which the joint venture was established, or an equivalent or similar show, be directed to the joint venture.

131. For these reasons, I am satisfied that there was an implied term of the Joint Venture Agreement of the kind contended for by Mr Murray and Cordell Jigsaw.

The nature of Mr Morrow’s duties as director of the Joint Venture Company

132. In his Cross-Claim List Response, Mr Morrow admitted that ss 181, 182 and 191 of the Corporations Act 2001 (Cth) applied to him as a director of the Joint Venture Company.

133. Mr Morrow thus accepted that he must:

1. exercise his powers and duties in good faith in the best interests of the Joint Venture Company and for a proper purpose (s 181);

2. not improperly use his position as a director of the Joint Venture Company to gain an advantage for himself or someone else or to cause detriment to the company (s 182); and

3. give Mr Murray, as his co-director, notice of any material personal interest he had in any matter relating to the affairs of the Joint Venture Company (s 191).

134. In the Cross-Claim List Statement, Mr Murray and Cordell Jigsaw also alleged that Mr Morrow owed the Joint Venture Company a fiduciary duty under the general law:

1. not to have an interest that conflicted or might possibly complete with his duty as a director to the Joint Venture Company in any matter falling within the scope of his office, except with the Joint Venture Company’s fully informed consent; and

2. not to misuse his position as a director for personal advantage or for the advantage of a third party, including Giant Dwarf, except with the Joint Venture Company’s fully informed consent.

135. In the Cross-Claim List Response, Mr Morrow and Giant Dwarf denied that the duty of each director of the Joint Venture Company was as expressed in the previous paragraph and contended that each of Mr Murray and Mr Morrow were aware that the other:

1. “was also the managing director of the television production company (Cordell Jigsaw and Giant Dwarf respectively) which conducted extensive business with the ABC, including the ABC television department responsible for The Checkout”; and

2. “had a material personal interest in matters related to the affairs of [the Joint Venture Company]”.

136. The latter contentions evidently related to a submission made by Ms Chrysanthou that each of Mr Morrow and Mr Murray were free to compete with the Joint Venture Company.

137. In this regard, Ms Chrysanthou pointed to the fact that Mr Murray and Cordell Jigsaw had pleaded that Mr Murray and Mr Morrow were appointed as directors of the Joint Venture Company “as a representative of” Cordell Jigsaw and Giant Dwarf respectively and submitted that “this is informed consent for each director to act in competition with the [Joint Venture Company]”.

138. In closing oral submissions, Ms Chrysanthou put the proposition this way:

“The directors were appointed as representatives of the shareholders. That was their role, to represent each shareholder. That is informed consent on the part of the parties and each director stands there in the interests of the shareholder, not in the overarching interest of the company”.

139. We had this exchange:

“HIS HONOUR: But not to act in conflict of the interests of the joint venture company.

CHRYSANTHOU: That’s correct. Well, no. Yes, to the extent that its informed; inform nature of that conflict being that they are they’re representing the shareholders who, by their nature, by the nature of their businesses, are in competition with a joint venture company.”

140. I do not accept that submission. While Mr Morrow and Mr Murray were no doubt appointed directors as representatives of Giant Dwarf and Cordell Jigsaw, they owed independent duties as directors to the Joint Venture Company. Although both Mr Morrow and Mr Murray knew that, outside of the joint venture, the other was engaging in television production, it cannot follow that as directors of the Joint Venture Company they could act otherwise than in that company’s interests.

Mr Murray’s and Cordell Jigsaw’s case concerning Mr Morrow’s breaches of duty

141. As developed in final submissions, Mr Murray’s and Cordell Jigsaw’s case was that, as a director of the Joint Venture Company, Mr Morrow owed the Joint Venture Company:

1. the statutory duties to act in good faith and in the best interests of the Joint Venture Company, and for a proper purpose and “not to direct commercial opportunities from the [Joint Venture] Company” to his own company, Giant Dwarf; and

2. a duty to disclose to Mr Murray “the opportunity”, that I discuss in detail below, to produce a seventh series of The Checkout.

142. Mr Murray and Cordell Jigsaw also contended that, in the circumstances of this case, Mr Murray, as a director of the Joint Venture Company, owed a fiduciary duty to Cordell Jigsaw as a 50% shareholder in the Joint Venture Company, to:

1. loyally promote the interests of all shareholders of the Joint Venture Company during his negotiations with the ABC for any further series of The Checkout;

2. not to cheat Cordell Jigsaw by non-disclosure of his negotiations with the ABC about the reintroduction of The Checkout;

3. tell Mr Murray and Cordell Jigsaw that the ABC wished to commission The Checkout or a consumer affairs show the proposed format of which was similar or equivalent to The Checkout before obtaining Cordell Jigsaw’s agreement to sell its shares in the Joint Venture Company to Giant Dwarf; and

4. not to place himself into a position of conflict between his own interests as a majority shareholder of Giant Dwarf on the one hand, and his duties to the Joint Venture Company on the other hand, without the fully informed consent of the Joint Venture Company, Mr Murray and Cordell Jigsaw. [13]

   13. Amended Cross-Claim List Statement C42.

143. I will set out below how Mr Katekar developed these arguments.

144. However, I will now turn to a narration of the events that led to the Share Sale Agreement. In the course of that narration, I will consider the question of whether a “commercial opportunity” of the kind for which Mr Murray and Cordell Jigsaw contended arose during Mr Morrow’s negotiations with the ABC.

Common ground that Mr Morrow and Mr Murray were free to develop and produce consumer affairs shows other than The Checkout or shows equivalent or similar to The Checkout?

145. Before doing so, I observe that it is common ground that the Joint Venture Company was created with the single purpose of producing the consumer affairs show that ultimately became The Checkout.

146. Mr Morrow and Mr Murray did not expressly agree that, apart from The Checkout, they would be free to develop and produce consumer affairs shows other than The Checkout or shows similar to or equivalent to The Checkout.

147. However, during 2018 and 2019 both Mr Morrow and Mr Murray acted on this basis.

148. I will set out in detail below the course of Mr Morrow’s discussions with the ABC; initially concerning his protestations against the ABC’s decision not to commission a further series of The Checkout in the 2018/2019 year and his subsequent negotiations for a “new” consumer affairs show that ultimately became The Checkout.

149. During the 2018/2019 year, Mr Murray also contemplated the possibility that Cordell Jigsaw would pitch to the ABC a consumer affairs show to be tentatively described as “Fraud Squad”.

150. Ultimately, nothing came of this.

151. Mr Murray denied that this proposed show was a “consumer affairs” show, although it obviously was.

152. However, I do not find Cordell Jigsaw’s flirtation with this possibility to have significance in this case.

153. I also add, at this stage, that in the middle of 2019 Cordell Jigsaw was pitching to the ABC a show called “Reputation Rehab”. This was not a consumer affairs show and, again, despite the emphasis placed on it during counsels’ submissions, I do not find Mr Murray’s nor Cordell Jigsaw’s activities in relation to this show to have any relevance to the issues that I must decide.

154. Accordingly, I make no further reference to these matters.

The decision of the ABC to place The Checkout on “hiatus” and Mr Morrow’s reaction

155. As I have mentioned, production of series six of The Checkout finished in April 2018.

156. At that point, if the ABC was going to commission series seven, it seems likely that the series would have been produced by the Joint Venture Company in the same way as before.

157. It was not to be.

158. On 4 July 2018, Ms Josie Mason-Campbell, then Head of Non-Scripted Production at the ABC, informed Mr Morrow by telephone that the ABC was unlikely to be able to fund The Checkout in the 2018/2019 financial year.

159. On the same day, Ms Mason-Campbell and her colleague, Mr Richard Huddleston, then Supervising Executive Producer, Entertainment and Development at the ABC, told Mr Murray that the ABC was not going to produce further series of The Checkout.

160. On 4 July 2018, Mr Michael Carrington, then Acting Head of Content Distribution at the ABC wrote to Mr David Anderson, then ABC Director of Entertainment & Specialist, and shortly thereafter the Acting Managing Director of the ABC, [14] and to Ms Mason-Campbell:

“We’re keen to have The Checkout back on our screens one day. If that is a possibility, it is normal practice for networks to put shows on ‘hiatus’ while new shows are developed in the schedule.”

14. Mr Anderson is currently the Managing Director of the ABC.

161. At that time, the ABC was preparing a draft statement for the media about its decision.

162. On the same day, Mr Morrow sent a text message to Mr Anderson, stating:

“Hi David – I’m just calling in the hope of stopping The Checkout being axed. Would be good to speak with you if you’re willing.”

163. There is no evidence Mr Anderson responded to this message.

164. A short time later, Mr Morrow sent a message to Mr Murray:

“Hi Nick - tried to call but just letting you know that it looks like Josie’s decided to axe The Checkout. Said she’d ring me at 5 tomorrow to confirm but the strong vibe is that it’s a done lack-of-deal. I doubt there’s much that can be done about, and could well understand if you weren’t that inclined either!, but obviously I wanted to let you know and I guess there’ll be some JV formalities to sort out in not too long. It’s had a very good run too. Hope all’s well with you and [Cordell Jigsaw].”

165. Mr Murray did not respond.

166. At around 9.30 am on 6 July 2018, Ms Mason-Campbell telephoned Mr Morrow and told him that the ABC would not fund The Checkout in the 2018/2019 financial year. Mr Morrow said that he tried to persuade Ms Mason-Campbell that there were ways to make the show “which would cost the ABC less” but that Ms Mason-Campbell “refused, repeatedly, to countenance any of these proposals.” Mr Morrow said he concluded from this that “Josie had no intention of bringing The Checkout back to ABC Television”.

167. A short time later, and before the ABC had made an announcement about putting The Checkout on hiatus, Mr Morrow published a Tweet as follows:

“The ABC has decided not to proceed with the next series of the consumer affairs show The Checkout, which was about to go into production.

Since 2013 The Checkout has aimed to give Australians valuable consumer information in an entertaining way. We’ve tried to be a show that does the core business of a public broadcaster.

The line ‘Don’t get ripped off. Watch The Checkout’ summed up the show’s purpose. A public broadcaster that’s independent of commercial influence is the natural home, probably the only home, for a show like The Checkout.

We’re disappointed the ABC’s funding priorities do not include The Checkout.

The ABCs Head of Non-Scripted Production explained the decision not to fund another series of The Checkout by citing budget cuts and the relatively high cost of making the show.

It’s true The Checkout’s combination of thorough research and creative ways to present consumer information means it’s not as low costs as some other ABC programs. But the cost of making The Checkout has not increased for two years, and the next series would have costs the same or less. The Checkout was also slated for production in the current financial year, before the federal government’s freeze on ABC funding in July 2019.

The Checkout was very much a program shaped by information that ABC viewers of all ages sent in. The Checkout’s inbox was always overflowing with rip-offs, corporate double-speak and advertising fails from the sinister to the silly. The rip offs will continue, but unfortunately it seems The Checkout will not.

We’d like to thank everyone who’s tuned in to The Checkout over the years for their input and their support.” (Emphasis in original.)

168. The reference in the fifth paragraph of this Tweet to the “ABC’s Head of Non-Scripted Production” was to Ms Mason-Campbell.

169. Mr Morrow had given the ABC no notice of his intention to publish the Tweet.

170. During the afternoon of 6 July 2018, Mr Murray telephoned Mr Morrow to remonstrate Mr Morrow’s indirect reference to Ms Mason-Campbell in his Tweet. Mr Murray said:

“It’s not [Cordell Jigsaw’s] practice to make announcements like that without the network knowing, and especially not to single out an ABC executive.”

171. Mr Morrow said that, after that call, he said to a friend, Mr Sholto McPherson:

“Of all the things to be annoyed about, it’s striking that Nick is more upset about me mentioning the ABC’s Head of Non-Scripted Production in the statement. Josie Mason-Campbell is married to the CEO of Nick’s company. He seems to think we should just accept the decision to axe The Checkout and move on.”

172. Mr Morrow’s reference to the “CEO of Nick’s company” was a reference to Mr Matthew Campbell who was then the Chief Executive Officer of Cordell Jigsaw. Mr Campbell was then married to Ms Mason-Campbell.

173. Mr Morrow and Mr Murray did not speak to each other again until the Duck Inn Meeting on 19 February 2019.

174. The ABC made a public announcement about its decision later on 6 July 2018 as follows:

“The ABC has decided not to commission a seventh series of The Checkout for 2018-19 at this time.

The programming slate regularly changes for any number of reasons, including the need to strike balance between new and returning programs for audiences. Putting The Checkout on hiatus does not preclude the program from returning in the future.

The ABC is proud of its long association with The Checkout and production company Giant Dwarf, with which it has worked on other programs, such as The Letdown and Growing Up Gracefully.”

175. As at 6 July 2018, Mr Murray believed, based on what he had heard from sources within the ABC, that The Checkout was not going to be made again.

176. The following day, 7 July 2018, Mr Morrow sent a further text message to Mr Anderson:

“Hi David - I’m sorry to contact you while you’re on leave - and to be honest I don’t know if you’re even in the country or mobile range at the moment - but I am resolved to [do] whatever I can to save The Checkout. So like I said [in the message of 4 July 2018], it would be good to speak with you if you’re willing.”

177. On 9 July 2018, Mr Morrow published a further Tweet:

“Thanks to everyone for your support re @ABCTV’s decision to put #thecheckout on axe-based ‘hiatus’. Hopefully the message will be heard.”

178. On 24 July 2018, Mr Morrow published a further Tweet:

“Good to see @craigreucassel is back with more #WarOnWasteAU … The ABC’s decision to put The Checkout on axe-based hiatus means the end of dedicated consumer affairs TV shows in Aust. Seems like a waste too.”

179. In his affidavit, Mr Murray said that he read these Tweets at the time. In cross-examination, he agreed that in fact he did not see them until after these proceeding were commenced. Ms Chrysanthou criticised Mr Murray about this but, as I have said, I do not see credit as a significant factor in this case.

180. On 24 July 2018, Mr Morrow wrote to Ms Michelle Guthrie, then the Managing Director of the ABC, and Mr Justin Milne, then the Chairman of the ABC, arguing for the ABC to reconsider its decision.

181. Mr Morrow’s letter included:

“It is clear many Australians believe that ending production of The Checkout in this context is the wrong decision for the ABC to make and inconsistent with the ABC Charter. Those concerns are well founded.

…

The makers of The Checkout have an obvious self-interest in continuing to make the program. But we understand those interests are irrelevant. The real question is whether ending production of The Checkout is in the best interests of the ABC.

Ultimately of course, that is a question for the managing Director and the Board, which is responsible for complying with the ABC Act and the ABC Charter. That’s why I’m now seeking to raise the question directly with you, and to provide the more detailed information below.

Although I am not an employee of the ABC, as an independent producer who’s been involved in making more than 25 series of television for the ABC over 17 years, I would appreciate the opportunity to discuss these issues with you in person, and hope to hear from you.”

182. Mr Morrow attached to that letter a document headed “Reactions to the ABC’S Decision Re The Checkout”.

183. In that annexure it was stated, under Mr Morrow’s hand, that:

“The ABC’s…statement ‘Putting The Checkout on hiatus does not preclude the program from returning in the future’ is even more hollow. Even a cursory review of the immediate public response indicates that statements like this are harmful to the ABC.”

184. Mr Morrow continued:

“It is the ABC Board’s duty to ensure that the Corporation does not fail to comply with its Charter obligations. No single program is essential for the ABC to comply with its Charter. But a single programming decision can result in a breach of the ABC Charter.

I believe that the ABC’s choice to stop making The Checkout is such a decision.

I am certain that if the ABC implements this decision, The Checkout will never return to production. There will be no return from this ‘hiatus’.

This is regrettable. But it presents an opportunity for the ABC’s most senior leadership to take action which will:

●   be well received in the community; and

●   serve as indisputable evidence that the ABC’s leadership is committed to upholding and defending the ABC Charter, and to preserving the benefits of public broadcasting for Australians.

The decision not to produce The Checkout in 2018-19 should not be endorsed. It should be reversed.

I respectfully ask that you look further into the issues this letter raises, and would appreciate the opportunity to discuss them with you.” (Emphasis added.)

185. On 31 July 2018, Mr Morrow met with Ms Guthrie from the ABC.

186. In what evidently was a briefing note prepared for Ms Guthrie for the purpose of the meeting, it was stated, under the heading “Recommendation”:

“The ABC maintain its position to not commission a seventh series of The Checkout in 2018-19. The option remains for the program to return beyond 2018-19, contingent on the availability of funding and the future programming slate.”

187. Mr Morrow said that Ms Guthrie did not say anything to this effect at the meeting.

188. The following day, 1 August 2018, Mr Morrow sent an email to Ms Guthrie and Mr Anderson which concluded:

“It’s important for the ABC to understand that if The Checkout is not produced in 2018/19, it will never return to production at the ABC.

The Checkout has been produced by a very talented team of freelance writer/presenters (whose skills and market value have significantly increased under the tutelage of Giant Dwarf). Inevitably they will go on to to take other jobs with different schedules, as will Giant Dwarf. This is a necessity for our livelihood, and it shows why the concept of a ‘hiatus’ is entirely unrealistic. I made this point to [Ms Mason-Campbell] when she told me about the ABC’s decision (and it’s been a theme of my chats with [Mr Anderson] about The Checkout for several years).

So thanks again for your time yesterday. I’d like to think that there are more constructive discussions to be had, and will look forward to hearing if that’s the case.”

189. On 14 August 2018, Mr Anderson participated in a radio interview with Mr Richard Glover during which they had the following exchange about The Checkout:

“Mr Anderson: When it comes to The Checkout, there are a couple of good things about The Checkout that are absolutely fantastic. Consumer advocacy and consumer affairs is something that is heartland ABC that we do quite well and we do it on other programs as well. And The Checkout has done well for us. There are always tough decisions when you look at the schedule about what can play out when and our response was that for the next 12 months it was looking difficult to fit The Checkout in, given the mix of returning series and other new series that are happening.

Mr Glover: Does that mean no forever? It sounds like it doesn’t.

Mr Anderson: It’s not a no forever, no.

Mr Glover: Alright. The Checkout might return.”

190. This was the first public statement that the ABC had made about The Checkout since its announcement on 6 July 2018.

191. Throughout August 2018, Mr Morrow continued to contact Mr Anderson seeking to convince the ABC to reverse its decision concerning The Checkout.

192. Eventually, Mr Morrow was able to arrange a meeting with Mr Anderson on 17 August 2018. Mr Morrow said that during the meeting Mr Anderson said words to the effect of:

“I’m sorry about The Checkout. Things are very uncertain here at the moment. I don’t know what’s going to happen to be honest. But I’d like to have a consumer show in the second half of next year.”

193. In an email Mr Morrow later sent Mr Anderson on 8 October 2018, he said that, at the 17 August 2018 meeting:

“… we talked about moving quickly to have discussions between you and me about another TV project which could potentially start receiving funding late in the 2018/19 financial year”. (Emphasis added.)

194. This appears to be the first occasion on which Mr Morrow communicated with the ABC about a “another TV project” as opposed to reinstatement of series seven of The Checkout.

195. On 24 August 2018, Mr Morrow followed the matter up with Mr Anderson in a text message:

“Just wondering if you might have 5 mins this arvo evening when I can call you to touch base re … parameters for future consumer affairs project”. (Emphasis added.)

196. In the meantime, Mr Morrow’s continuing disenchantment with the ABC’s decision to “hiatus” The Checkout was reflected in words attributed to him in the 30 August 2018 edition of the magazine Justinian.

197. Under the heading “Why did Aunty can The Checkout?” Mr Morrow is quoted as saying:

“They’d say ‘budget cuts’. I’d say, ‘because of misguided and inept ABC management, which is increasingly populated by executives with a track record of commitment to public broadcasting values which amount to little more than the title on their most recent business card and empty platitudes deployed as a smokescreen for poor judgment.”

198. This material was included in the Court Book without objection, from which I infer that Mr Morrow agreed it to be accurate. It shows, as did Mr Morrow’s July 2018 Tweets, that Mr Morrow was not shy about publicly criticising the ABC; despite it being his long standing and major client.

Further discussions for a possible new “consumer show”

199. On 4, 7 and 17 September 2018, with characteristic persistence, Mr Morrow followed up with Mr Anderson his enquiry of 24 August 2018 to “touch base” about “another consumer project”.

200. Ultimately, on 19 September 2018 Mr Anderson telephoned Mr Morrow and they had this conversation:

“[Mr Anderson]:   I would still like to have a consumer show on the ABC in the second half of next year. And I wanted to let you know that Josie [Mason-Campbell] will not be involved in this because of the conflict of interest issues. [15]

[Mr Morrow]:    That seems like the only appropriate decision to me, so I’m glad that’s what the ABC’s decided. Thanks for letting me know. Do you have budget parameters for this consumer show?

[Mr Anderson]:    Not yet.

[Mr Morrow]:    And when you say ‘a consumer show’ do you actually mean The Checkout?

[Mr Anderson]:    No, I mean a consumer show.

[Mr Morrow]:    Well, as you know, I think the ABC should want The Checkout. But given the ABC’s budget concerns, the only way another series of The Checkout would be possible at this point is if Giant Dwarf and [Cordell Jigsaw] can come to some sort of new agreement.

[Mr Anderson]:    That’s really a matter for you and Nick. My perspective is, I want a consumer show on the ABC in the second half of 2019. I think you’re the best producer in the country to do that.

[Mr Morrow]:    Thank you David. That’s nice to hear. And without wanting to sound too arrogant, I agree. I think we should proceed on the basis that we’re talking about a new consumer show. If Nick and I can work something out which means it’s possible to make The Checkout again, that’s a bonus.” (Emphasis added.)

15. Evidently a reference to the fact that Ms Mason-Campbell was married to Cordell Jigsaw’s CEO, Mr Matthew Campbell.

201. Although Mr Morrow suggested that he and Mr Anderson proceed on the basis that they were talking about a “new consumer show”, his language in this conversation bespeaks a continued desire, one way or another, to be involved in the production of a further series of The Checkout.

202. Indeed, as I set out below, eight months later, on 4 June 2019, and almost two months after Giant Dwarf and Cordell Jigsaw had executed the Share Sale Agreement, Mr Morrow wrote to Mr Anderson:

“As you know, we have been talking since October last year about the prospect of bringing The Checkout back to ABC TV.”

203. In cross-examination Mr Morrow said of this:

“I had told Mr Anderson that the prospect of bringing The Checkout back to the ABC would only occur if there was an agreement, a new agreement reached between [Cordell Jigsaw] and Giant Dwarf”.

204. Although Mr Morrow did say this to Mr Anderson on this occasion, the manner in which Mr Morrow expressed himself in the June 2019 email suggests to me that, as far back as October 2018, he had in mind the possibility of producing a further series of The Checkout; without any involvement of Mr Murray.

205. Several days later, on 25 September 2018, Mr Anderson, who had by then been appointed Acting Managing Director of the ABC, was interviewed by Mr Michael Rowland on ABC News Breakfast. They had this exchange:

“Mr Rowland:   Quite a few viewers wanting The Checkout to be back on our screens. Any hope there?

Mr Anderson: Look, I think consumer affairs and advocacy is something the ABC has done well in the past. Whether it’s The Checkout or another program in the future, I think it’s something we’ll pursue”.

206. This was the third public statement following the ABC’s decision to “hiatus” The Checkout. Notably, on this occasion, it was made by the newly appointed Acting Managing Director. It showed that the ABC’s public position was that it would likely produce a further consumer affairs show; and that it may well be a further series of The Checkout.

207. As only the Joint Venture Company was entitled to produce The Checkout, this must have made clear to Mr Morrow that an opportunity may well exist for the Joint Venture Company to produce such a further series.

208. On 8 October 2018, Mr Morrow again wrote to Mr Anderson. His email opened with the reference to their 17 August 2018 meeting that I have set out above,[16] and continued:

“… I’m starting to think that the more likely conclusion is that there’s no genuine prospect of Giant Dwarf making either the sort of project we discussed for the ABC … or any indeed new project in 2018/19. Unfortunately, that second element stems from the fact that Nikita [Agzarian] [17] and I have had a series of deeply concerning communications with Head of Non-Scripted, [18] which in my view raise serious questions about ABC administration at the moment.

I would very much like to be mistaken, but the information available to me at the moment seems to be pointing in the other direction.

We’ve been able to work through many issues over the years, and the results have been a collection of TV shows that both Giant Dwarf and the ABC can and should be proud of. I’m hoping that can continue, and that I’ll hear from you soon to that end.”

The Post, Digital and Visual Effects Offset determination

16. At [193].

17. An Executive Producer at Giant Dwarf.

18. Ms Mason-Campbell.

209. On 19 December 2018, the Australian Taxation Office issued a certificate confirming the Joint Venture Company’s entitlement to a Post, Digital and Visual Effects Offset under ss 376-45 Div 376 of the Income Tax Assessment Act 1997 (Cth) of $963,018 for series five of The Checkout and $995,448 for series six. The Joint Venture Company was entitled to a rebate of 30% of this amount, some $585,000 payable on 25 January 2019.

210. The parties referred to this as the “PDV Offset”. It assumes significance in relation to Mr Morrow’s discussions with Mr Murray and Cordell Jigsaw’s Chief Financial Officer, Mr Simon Fraser, in February 2019 concerning the sale of Cordell Jigsaw’s shares in the Joint Venture Company. I return to this below.

Mr Morrow’s discussions with the ABC continue

211. Also on 19 December 2018, Mr Morrow spoke to Mr Anderson. Following that conversation, he sent an email to Mr Carrington:

963. The matter was made even clearer by the ABC’s published statement, later on 5 December 2019, that it had ended discussions with Giant Dwarf:

“… after Giant Dwarf’s public statements and correspondence and dealings with the ABC made it clear that we are not creatively aligned, which is a necessary first step when considering development of a new program.”[114]

114. See [731] above.

967. Mr Morrow has not adduced evidence of any circumstances following these events which might cast light on why it is that the ABC has not invited him to produce any further television programs.

968. Such evidence as is before me points firmly to the conclusion that it is a matter that Mr Morrow has brought upon himself and is not a matter that has anything to do with Mr Murray’s defamatory publications.

Quantum

969. I now turn to the difficult question of the quantum of the damages to be awarded to Mr Morrow.

970. For the reasons I have explained, there can be no damages for economic loss.

971. As to general damages, I must engage in what is necessarily an impressionist exercise which is not capable of precise intellectual analysis.

972. The sting of the libel in this case is Mr Murray’s accusations, in his emails to Ms Carnabuci of 5 July 2019 and to Ms Gilchrist of 12 August 2019, that Mr Morrow had behaved fraudulently. This is obviously a serious allegation. It was, however, made to a targeted audience being the two individuals at the ABC to whom the emails were sent, and those within the ABC with whom Mr Murray must have thought would hear of the allegations.

973. Despite the gravity of the allegations, they do not seem to have affected the ABC’s inclination to deal with Mr Morrow. Things fell apart between the ABC and Mr Morrow at the end of 2019 for different reasons; being reasons for which Mr Morrow can blame no one but himself.

974. Mr Murray repeated the allegations to “many, many” people although, as I have set out, the evidence does not reveal the extent to which Mr Murray passed on allegations that I found to be justified (misleading or deceptive conduct and breach of director’s duty) as opposed to allegations which I have found not to be justified (fraud).

975. And all this must be seen in the context where I have found that Mr Murray was justified in making the obviously defamatory assertions that Mr Morrow had engaged in misleading or deceptive conduct and acted in breach of his duty to the Joint Venture Company.

976. Further, there are circumstances of aggravation that I have set out.

977. During argument, my attention was drawn to other cases in which “comparable awards” were said to have been given. I attach a schedule which sets out a summary of those other cases.  [977] Comparable awards (198102, pdf)

978. Those cases, obviously, deal with factual circumstances very different from those before me. They, however, do suggest that the award for damages in this case must be very much less than in most of those cases.

979. The conclusion I have come to is that, in all the circumstances I have described, the appropriate award of damages for the defamatory statements made by Mr Murray for which there is no justification is $30,000, to which I add $5,000 on account of aggravation.

Interest on damages

980. It was common ground that Mr Morrow should be awarded interest on those damages.

981. There was, however, a dispute in the written submissions as to the rate of interest. I will hear further submissions about that matter following publication of these reasons.

Injunction

982. Ms Chrysanthou submitted that I should also issue an injunction restraining Mr Murray and Cordell Jigsaw from further publishing any of the imputations found to have been conveyed.

983. At the moment, I am unable to see that there is any real risk that Mr Murray will repeat the imputations that I have found to be defamatory of Mr Morrow and not to be justified. Accordingly, I am not able to see why any injunctive relief should be granted.

984. However, I will invite further submissions about that matter following delivery of judgment.

Injurious falsehood

985. It is common ground that the elements of the tort of injurious falsehood are that:

1. a false statement has been made about the plaintiff’s goods or business;

2. that statement was published by the defendant to a third party;

3. there was malice on the part of the defendant; and

4. the plaintiff has suffered actual loss as a result. [115]

   115. Ratcliffe v Evans [1892] 2 QB 524 (Bowen LJ); Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 692 (Gleeson CJ); Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at 393 (Gleeson CJ), 404 (Gummow J), 447 (Callinan J); [2001] HCA 69.

986. On behalf of Mr Morrow and Giant Dwarf, this aspect of the case was developed by reference to a schedule entitled “Table of Falsehoods”. That schedule listed 15 allegedly false representations, all of which are said to be contained in email communications sent by Mr Murray to various officers of the ABC, including in the emails in which the allegedly defamatory statements were made.

987. The parties have cooperated to produce an expanded version of that schedule to include Mr Murray’s and Cordell Jigsaw’s response to Mr Morrow’s and Giant Dwarf’s contentions.

988. I will deal with each of the alleged “falsehoods” but record at this stage that the short answer to Mr Morrow’s and Giant Dwarf’s case concerning injurious falsehood is that, just as Mr Morrow has failed to show that he has suffered any economic loss as a result of Mr Murray’s allegedly defamatory communications to the ABC, for the same reasons, he has failed to establish any loss by him or Giant Dwarf as a result of the allegedly false statements subject of his injurious falsehood claim.

989. Further, in relation to some of the falsehoods alleged, Mr Morrow and Giant and Dwarf have not established that they were actuated by malice.

990. I will deal with each of the alleged falsehoods in turn.

First allegedly false representation

991. The first alleged false representation arises from the statement made by Mr Murray in his 21 May 2019 email to Mr Anderson that:

“Many of the key Checkout team have indicated their reluctance to work on the series without a circuit breaker protecting them from [Mr Morrow]. (For instance, even Craig [Reucassel] has in the recent past asked me to take over from [Mr Morrow]). I will no longer be that circuit breaker as [Mr Morrow] has asked that [Cordell Jigsaw] leave the [Joint Venture Company].”

992. Mr Morrow alleges that the following false representation arises from this passage:

“That many key members of The Checkout team would be unwilling to work on the series if a new season of [The Checkout] was commissioned by the ABC without the involvement of [Cordell Jigsaw]”.

993. That is not how I read the relevant passage of Mr Murray’s email to Mr Anderson. Rather, I read Mr Murray as saying that many key members of The Checkout team would be reluctant to work on a new season of The Checkout were Mr Morrow to be involved; and were Mr Murray to not also be involved as a “circuit breaker”, whatever that may mean.

994. Mr Murray has not adduced evidence from any “key member of The Checkout team” to prove that they were reluctant “to work on the series without a circuit breaker protecting them from” Mr Morrow.

995. On behalf of Mr Morrow, reference was made to the evidence of Ms Drysdale, called in Mr Murray’s case, that she was “excited about the prospect of returning to work on The Checkout”. However, Ms Drysdale qualified that evidence by saying that she would only be so excited “if the way to do that was through Crikey because it meant I would not have to work directly with Julian”.

996. As for Mr Murray’s reference to Mr Reucassel having asked him in the “recent past” to “take over from Julian” I have already referred to Mr Murray’s evidence that he agreed that he was “gilding the lily” about this.

997. Mr Murray was referring to a conversation that he said he had with Mr Reucassel during the production of series five of The Checkout in April or May 2017. Mr Murray said that Mr Reucassel told him:

“I’m very worried about the team on the show. Julian is out of control and many are threatening to leave. It’s becoming harder and harder to actually deliver the show due to his treatment of the crew including some of the presenters, and his unreasonable demands on the post production process. It’s so bad that I think you need to take over from him running the show.”

998. In cross-examination, Mr Murray adhered to his evidence that Mr Reucassel had said something to this effect. Mr Morrow did not call Mr Reucassel to contradict that evidence, notwithstanding the fact that, as I have said, Mr Reucassel is a director and shareholder of Giant Dwarf.

999. I find that what Mr Reucassel is reported to have said to Mr Murray provides a basis for what Mr Murray said in his email of 21 May 2019 to Mr Anderson.

1000. On behalf of Mr Morrow, reference was made to indirect evidence that other named persons, evidently associated with The Checkout in an earlier series, would have been prepared to participate in a seventh series.

1001. To this limited extent, Mr Morrow has demonstrated falsity in relation to what Mr Murray said to Mr Anderson in this email.

1002. However, I see no basis to conclude that Mr Murray was actuated by malice in making this statement. Indeed, Mr Murray’s evidence as to what Mr Reucassel said to him provides some basis for it.

Second allegedly false representation

1003. This allegedly false representation arises from the same passage in Mr Murray’s 21 May 2019 email to Mr Anderson that is the subject of the first allegedly false representation.

1004. The alleged representation is:

“That Craig Reucassel, described by Mr Murray as a key business partner of [Mr Morrow and Giant Dwarf] had recently before 21 May 2019 asked [Cordell Jigsaw] and Mr Murray to take over management and production of The Checkout.”

1005. As I have said, Mr Murray accepted that he was “gilding the lily” when he said the statements by Mr Reucassel upon which Mr Murray relied were made “in the recent past”. They were in fact made in April or May 2017; not the “recent past”.

1006. However, I see no reason to doubt that Mr Reucassel did make this statement to Mr Murray.

1007. Thus, although it was untrue to the extent if referred to “the recent past”, I do not find it was made maliciously.

Third allegedly false representation

1008. This representation is:

“That Giant Dwarf and Mr Morrow misled and deceived [Cordell Jigsaw] and Mr Murray in the negotiation of the [Share Sale Agreement].”

1009. It is said to arise from a number of Mr Murray’s allegedly defamatory emails to the ABC.

1010. I have found that, in substance, this is what happened. Thus, the representation was not false.

Fourth allegedly false representation

1011. This representation, said to arise from a number of the allegedly defamatory emails, is:

“That Giant Dwarf and Mr Morrow acted unlawfully in the negotiation of the [Share Sale Agreement] with [Cordell Jigsaw].”

1012. Again, in effect, I have found that Mr Morrow and Giant Dwarf did act unlawfully and that Mr Morrow acted in breach of his duties as director of the Joint Venture Company and engaged in misleading or deceptive conduct. Thus, this representation was not false.

Fifth allegedly false representation

1013. This representation, said to arise from a number of the allegedly defamatory emails, is:

“That Mr Morrow breached his duties as a director of [the Joint Venture Company] in negotiation of the [Share Sale Agreement] with [Cordell Jigsaw].”

1014. Again, this is in substance what I have found. The representation was not false.

Sixth allegedly false representation

1015. This representation is:

“That [the Joint Venture Company] did not have good and valid title in the rights and intellectual property in The Checkout.”

1016. This alleged representation is based on the statement in Mr Murray’s 12 June 2019 email to Ms Pincus and Ms Chapman that:

“We … need to put the ABC on notice that there is a dispute concerning the ownership of the underlying IP for The Checkout … ”.

1017. I have found that it was not correct of Mr Murray to allege that there was a “dispute” concerning the ownership of the intellectual property underlying The Checkout. Mr Murray’s solicitor, Mr Fraser confirmed, several days after this email, that this matter was not disputed.

1018. Mr Murray must have known that this statement was not correct. It was in my opinion made with malice.

Seventh allegedly false representation

1019. This representation is:

“That [the Joint Venture Company] and Giant Dwarf were not entitled to deal with the rights and title in The Checkout as contemplated under the Share Sale Agreement.”

1020. This allegedly false representation is also based on the passage from Mr Murray’s email to Ms Pincus of 12 June 2019.

1021. Mr Murray must have known the statement was not true. I find it was made maliciously.

Eighth allegedly false representation

1022. This representation is:

“That Giant Dwarf and Mr Morrow deceived [Cordell Jigsaw] into selling its shares in [the Joint Venture Company] [to] Giant Dwarf without payment.”

1023. This representation arises from Mr Murray’s statements to that effect in his emails of 12 June 2019 to Ms Pincus and 20 June 2019 to Mr Carrington.

1024. As I set out earlier, it was not true that Cordell Jigsaw sold its shares in the Joint Venture Company to Giant Dwarf “without payment” and to this extent this representation is not correct.

1025. However, I have found that, in effect, Mr Morrow and Giant Dwarf did deceive Cordell Jigsaw into selling its shares in the Joint Venture Company. This is the substance of the misrepresentation. I cannot conclude that the addition of the incorrect statement that the transfer was “without payment” bespeaks malice on Mr Murray’s part.

Ninth allegedly false representation

1026. This representation is:

“That Giant Dwarf and Mr Morrow misled and deceived [Cordell Jigsaw] into believing that there was no chance of The Checkout returning for a seventh series.”

1027. This alleged representation is based on the statement made by Mr Murray in his 12 June 2019 email to Ms Pincus that:

“We had been told by both the ABC and Julian that there was no chance of the show returning for a seventh series.”

1028. Mr Murray did not say in this email that Giant Dwarf had made any representation about the likelihood of The Checkout returning.

1029. In cross-examination, Mr Murray said that “the impression that we had” from what Mr Morrow had said was that there was “no chance” of The Checkout returning but that Mr Morrow had not said “in those words” that there was no such chance.

1030. Thus, what Mr Murray said was, literally, not true.

1031. However, I see no reason to conclude that he made this statement maliciously.

Tenth allegedly false representation

1032. This representation is:

“That [Cordell Jigsaw] and Mr Murray disputed the ownership of the intellectual property in The Checkout.”

1033. This is based on the statements made by Mr Murray in his 12 June 2019 to Ms Pincus to which I have referred. I reach the same conclusion here as I have in relation to the sixth and seventh allegedly false representations.

Eleventh allegedly false representation

1034. This representation is:

“That Giant Dwarf and Mr Morrow were not entitled to produce other consumer affairs television programs without the involvement or permission of [Cordell Jigsaw]”.

1035. On behalf of Mr Morrow and Giant Dwarf, four of Mr Murray’s emails were identified as containing this representation.

1036. In the sixth paragraph of Mr Murray’s 12 August 2019 email to Ms Gilchrist, Mr Murray said:

“Julian is also asserting he is able to pitch an alternative consumer affairs program to the ABC by virtue of the provision in the Share Sale Agreement which gave each of us the right to pitch new consumer affairs programs”.

1037. Mr Murray then set out the text of cl 4.6 of the Share Sale Agreement.

1038. Mr Murray continued:

“Of course the problem he now has, is that he unilaterally terminated that agreement on 28^th June. He has no right to pitch a replacement consumer affairs show to the ABC without our involvement”.

1039. Thus, Mr Murray’s statement was qualified by reference to Mr Morrow’s purported termination of the Share Sale Agreement. His point was, evidently, that as Mr Morrow had purported to terminate the Share Sale Agreement, he was no longer entitled to rely on cl 4.6 of that document. But it would not follow from that that Mr Morrow had “no right to pitch a replacement consumer affairs show”.

1040. The statement was thus false to this extent. But I cannot conclude it was made maliciously. More likely, it bespoke a misunderstanding on Mr Murray’s part of the consequences to Giant Dwarf of its purported termination of the Share Sale Agreement.

Twelfth allegedly false representation

1041. This alleged representation is:

“That if the ABC commissioned The Checkout or any other consumer affairs programs involving Mr Morrow or Giant Dwarf without the involvement or consent of [Cordell Jigsaw], [Cordell Jigsaw] would cause the ABC to suffer commercial damage.”

1042. Mr Morrow and Giant Dwarf identified three of Mr Murray’s emails as containing this representation.

1043. Mr Morrow and Giant Dwarf appear to be relying upon the statement in Mr Murray’s 12 August 2019 email to Ms Gilchrist:

“There is no way of commissioning a show designed to avoid The Checkout [that] will not result in serious blowback for the ABC.”

1044. However, when read in the context of the whole email, it is clear that Mr Murray is referring to the possibility of subpoenas being served on the ABC were he to commence proceedings against Mr Morrow, Giant Dwarf and the Joint Venture Company, and of the ABC thereby incurring expense.

1045. Mr Murray’s statement was thus not only true, but it was prescient. As I have recorded in earlier judgments, the ABC was served with a large number of subpoenas and has spent a very large amount of money responding to them.

Thirteenth allegedly false representation

1046. This representation is that:

“That Giant Dwarf and Mr Morrow’s conduct caused The Checkout to be cancelled by the ABC, rather than ‘put on hiatus’.”

1047. Again, Mr Morrow and Giant Dwarf refer to a number of Mr Murray’s emails as allegedly containing this representation.

1048. The alleged representations appears to derive from a passage in Mr Murray’s email to Ms Pincus of 14 June 2019 where he stated:

“[Mr Morrow’s] actions at that time [July 2018] resulted in various ABC representatives telling us … that the show was now cancelled, instead of on hiatus, and would not be returning under any circumstances”

1049. Mr Murray was here recording what he said Cordell Jigsaw had been told in or since July 2018 by ABC representatives.

1050. My attention has not been directed to any evidence to show that this was not correct.

1051. Looking at the matter more widely, by Ms Carnabuci’s email of 4 July 2019, the ABC did in effect “cancel” The Checkout, rather than continue it being “on hiatus”. In substance, I have found that Mr Morrow’s conduct did cause this to happen.

Fourteenth allegedly false representation

1052. This representation is:

“That as at 20 June 2019, a key business partner of Mr Morrow supported the position of [Cordell Jigsaw] and Mr Murray in the dispute between the parties.”

1053. This alleged representation relates to the statement made by Mr Murray in his 20 June 2019 email to Mr Carrington that:

“Our current position is supported by a key business partner of Julian’s too”.

1054. This was a reference to Mr Reucassel’s statement to Mr Murray that he should “go for it” so far as concerns the Quit Claim.

1055. As I have said above, I am satisfied that, to this extent, Mr Reucassel did “support” Cordell Jigsaw’s position.

Fifteenth allegedly false representation

1056. This representation is:

“That Giant Dwarf and Mr Morrow had engaged in fraud against [Cordell Jigsaw].”

1057. This representation arises from Mr Murray’s 5 July 2019 email to Ms Carnabuci and his 12 August 2019 email to Ms Gilchrist.

1058. For the reasons I have discussed earlier, this representation was false.

Conclusion concerning injurious falsehood

1059. To the limited extent that I have set out in the preceding paragraphs, I find that Mr Morrow’s and Giant Dwarf’s case concerning injurious falsehood has been made out.

1060. However, as I said at the outset of my discussion on that subject, I am not satisfied that Mr Morrow or Giant Dwarf have suffered any loss as a result of those injurious falsehoods.

The Joint Venture Company’s and Giant Dwarf’s claim for damages for breach of the Share Sale Agreement

1061. The Joint Venture Company and Giant Dwarf claim damages from Cordell Jigsaw for alleged breaches by Cordell Jigsaw of the Share Sale Agreement.

1062. The breach alleged is Cordell Jigsaw’s failure to execute the Quit Claim.

1063. The Joint Venture Company and Giant Dwarf allege that as a result of this failure, the ABC declined to commission series seven of The Checkout and that the Joint Venture Company and Giant Dwarf have suffered a loss which is said to be a function of:

1. lost production funding for series seven and eight of The Checkout;

2. loss of “co-producer cash” across series seven and eight of The Checkout;

3. loss of producer overheads for series seven and eight of The Checkout;

4. loss of income for series seven and eight of The Checkout; and

5. loss of an opportunity to profit from series seven and eight of The Checkout and any further series of The Checkout.

1064. The amount claimed by the Joint Venture Company is $1,218,660. The amount claimed by Giant Dwarf is $1,812,640.

1065. The manner in which those figures were calculated was set out in detail in closing written submissions.

1066. It is not necessary for me to deal with the manner in which those damages claims are calculated because there are two fundamental reasons why neither the Joint Venture Company nor Giant Dwarf is entitled to recover such damages.

1067. The first is that I have found, by reason of Giant Dwarf’s misleading or deceptive conduct, that Cordell Jigsaw is entitled to an order rescinding the Share Sale Agreement. Accordingly, no question of any breach by Cordell Jigsaw of the Share Sale Agreement can arise for consideration.

1068. Second, and in any event, I have found that by declining to execute the Quit Claim, Cordell Jigsaw did not act in breach of any provision of the Share Sale Agreement.

1069. I have found that had Mr Morrow caused Giant Dwarf to fail to comply with the implied term of the Joint Venture Agreement. I have also found that, by his silence, Mr Morrow caused Giant Dwarf to engage in misleading or deceptive conduct. And that, but for those matters, Mr Murray would not have caused Cordell Jigsaw to execute the Share Sale Agreement.

1070. It may well be that, if Mr Morrow had not sought to negotiate a sale by Cordell Jigsaw to Giant Dwarf of its shares in the Joint Venture Company, had not caused Giant Dwarf to act in breach of the implied term of the Joint Venture Agreement, had not acted in breach of his duties as a director to the Joint Venture Company and not engaged in the misleading or deceptive conduct, Mr Morrow could have caused Giant Dwarf to proceed to produce a show called Are You Being Served; provided, of course, that it was not in a format that was similar or equivalent to The Checkout. And it may well be that Giant Dwarf may have profited from that venture.

1071. But these are not the “facts as they actually existed”. It is “often of no avail” for a company director who has disposed of company property by acting in breach of fiduciary duty to show that “the property could have been taken from the company, by some means other than that actually employed, without any breach of fiduciary duty”. [116]

      116. Oates v Consolidated Capital Services Pty Limited (2009) 76 NSWLR 69; [2009] NSWCA 1983 at [227] (Campbell JA; Spigelman CJ and Allsop P agreeing) (this passage not reported in the authorised report).

1072. So too here. It is not to the point that Mr Morrow may have been able to produce a show called Are You Being Served without engaging in the conduct I have found. That is not what happened. The reason Giant Dwarf has suffered any such loss is its own conduct in not complying with the implied term of the Joint Venture Agreement and its director engaging in the misleading or deceptive conduct that I have found. Any such loss has not been caused by any breach by Cordell Jigsaw of the Share Sale Agreement.

Remedies claim by Cordell Jigsaw

1073. I have found that Cordell Jigsaw is entitled to an order under s 237 of the Australian Consumer Law rescinding the Share Sale Agreement.

1074. Cordell Jigsaw also seeks damages on the basis that had Giant Dwarf disclosed to Cordell Jigsaw the opportunity that I have found to have arisen in March 2019 to produce a further series of The Checkout, or an equivalent or similar consumer affairs program, and thus not acted in breach of the implied term of the Joint Venture Agreement and in an manner that was misleading or deceptive:

1. Mr Morrow would have told Mr Murray about his efforts to reintroduce The Checkout at the ABC;

2. the Share Sale Agreement would not have been entered into;

3. the ABC would not have required Cordell Jigsaw to enter any Quit Claim;

4. the ABC and the Joint Venture Company would have entered into an agreement to produce series seven and eight of The Checkout; and

5. Cordell Jigsaw would have made profits from those series. [117]

   117. Amended Cross-Claim List Statement at C50.

1075. I am not persuaded that matters would have proceeded this way had Mr Morrow, and thus Giant Dwarf, disclosed to Mr Murray and Cordell Jigsaw the opportunity that I have found arose in March 2019 concerning a further series of The Checkout.

1076. I see no reason to doubt Mr Morrow’s evidence that he no longer wished to work with Mr Murray in relation to The Checkout and that, had matters so transpired, Mr Morrow would have exercised what he described as being his right of “veto” over the Joint Venture Company engaging in any further production of The Checkout.

1077. Had Mr Morrow told Mr Murray about the ABC’s interest in producing a further series of The Checkout, Mr Murray may well have declined to cause Cordell Jigsaw to sell its shares in the Joint Venture Company to Giant Dwarf. In that event, Mr Morrow, and thus Giant Dwarf, would have refused to engage any further television production activities with Mr Murray and Cordell Jigsaw concerning The Checkout.

1078. For those reasons, I am not satisfied that Cordell Jigsaw has suffered the damage for which it contends.

1079. As I propose to make an order rescinding the Share Sale Agreement there will be consequences so far as concerns the PDV Offsets already received by the Joint Venture Company and those receivable in the future.

1080. I invite submissions as to the orders that should be made in regard to these matters.

Conclusion

1081. I will now invite submissions from the parties as to whether there are any further matters to be determined in relation to these proceedings and as to the orders that should be made to give effect to my reasons.

1082. I will also seek submissions as to costs. It may be that the appropriate order is that there be no order as to costs, with the intent that each party pays his or its own costs of the proceedings.

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Endnotes

Amendments

13 April 2022 - Hearing dates on Coversheet inserted

14 April 2022 - [897(v)] footnote deleted

23 June 2022 - [72] name corrected to "Mr Morrow"

Decision last updated: 23 June 2022