Advantage Group Australasia Pty Ltd v Fairfax Media Publications Pty Ltd

Cases Cited: Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69
Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1978) 134 CLR 1

Texts Cited: Salmond on the Law of Torts (10th Ed, 1945)

Category: Procedural rulings

Parties: Advantage Group Australasia

Representation: Counsel:
J Pradella (Solicitor) (Plaintiff)
L Norman (Solicitor) (Defendant)
Solicitors:
Advantage Group Australasia Pty Ltd (in house counsel) (Plaintiff)
Banki Haddock Fiora (Defendant)

File Number(s): 2026/6356

Publication restriction: Nil

JUDGMENT

1. By Statement of Claim filed on 6 January 2026, the plaintiff claims damages and other relief from the defendant arising out of a newspaper and online article written by the well-known investigative journalist, Ms Kate McClymont, and published by the defendant in its newspaper, T**he Sydney Morning Herald, and online on the smh.com.au website.

2. It is important to emphasise at the outset that the plaintiff corporation seeks to plead a case founded on the tort of injurious falsehood and not in defamation. It has no cause of action for defamation: Defamation Act 2005 (NSW) s 9*.* While the differences between the torts of injurious falsehood and defamation must firmly be kept in mind at all times, in accordance with the usual practice of the Court, the plaintiff sought to include its claim in the defamation list. In conformity with the requirements of Practice Note SC CL 4, which sets out the practice to be followed in the defamation list, a first listing date was fixed before me for 27 February 2026 (see clause 10). In compliance with clause 13 and by letter dated 25 February 2026, the defendant’s solicitor notified the plaintiff’s solicitor of the defendant’s objections to the form of the pleading. Also, in compliance with clause 13, the plaintiff’s solicitor responded indicating which objections were accepted and which were rejected.

3. While it is not entirely clear to me from the exchange of correspondence, the plaintiff’s solicitor obviously thought there was merit in some matters raised by her counterpart because two further iterations of the Statement of Claim, each styled “Minute of Proposed Further Amended Statement of Claim” (“PFASOC”) were prepared and forwarded to the defendant’s solicitor and my chambers. During argument at the first listing about the defendant’s objections, the plaintiff’s solicitor made clear that she relied upon the later iteration of the proposed amendment, the first page of which I have initialled, dated and placed with the papers.

4. Ms Pradella, the plaintiff’s solicitor, appeared with leave by AVL and Ms Norman, the defendant’s solicitor, in person on the argument. After argument, I indicated to Ms Pradella that I accepted that many of the defendant’s objections were well taken and I was of the view that the preferrable course would be for me to reject the PFASOC, strike out the original pleading and grant leave to the plaintiff to replead. I was of the view that this approach was likely to enhance the clarity of the pleading. The drafting of yet another amended pleading grafted onto the original would serve no purpose other than the production of a gallimaufry of delineations, strikethroughs, and interpolation of amendments. As she was quite entitled to do, Ms Pradella asked for formal reasons, which I now provide.

5. The article complained of is a lengthy one and it is unnecessary for me to summarise it. The headline is: “Worthless Tokens: the Crypto Coin, a Chicken Kebab Shop and the Missing Millions”. Some of the flavour of the article can be garnered from these introductory paragraphs:

“Twice-jailed serial fraudster, former assistant tax commissioner Nick Petroulias, and his long-term associate, Hussein Faraj, a bankrupt chicken kebab shop owner, are being investigated over fraud allegations relating to their Australia-based cryptocurrency company.

The NSW Crime Command’s Cybercrime Squad told this masthead they were “aware” of the company NuGenesis, which was also co-founded by a businessman previously convicted of bribing foreign officials.”

“[We] are unable to comment on ongoing investigations,” a police spokeswoman said.

Allegations include that millions of dollars of investors’ money has disappeared and that the trio used Hezbollah bank accounts to move funds. Scoffing at these claims, Faraj blamed them on his younger brother, with whom he is currently in a Supreme Court property dispute.

Hussein Faraj, 40, is an undischarged bankrupt who runs Chicken Licious, a kebab shop in Rockdale. On his Facebook page, he lists himself as the “CEO and Cofounder at NuGenesis”, a cryptocurrency company he established in August 2021, as well as the president of the United Shia Islamic Foundation.

According to its website, NuGenesis operates in the crypto sphere as “a decentralized blockchain that uses Artificial Intelligence to power its operations”.

NuGenesis began offering its crypto token, NuCoin, in November 2021.

Angry investors have told this masthead, “We have been left holding a bag of worthless tokens.”

One well-known businessman and his partner, who invested $100,000 in late 2021, have been chasing Faraj for years for the return of their money. In January, they received a threatening call from Faraj.”

6. The Statement of Claim and the proposed amended iterations of it identify Mr Hussein Faraj as the founder of the plaintiff company and its sole director until he was made bankrupt on 28 November 2023. He “remains the central contact person for all business partners, customers and other associates of the plaintiff” (PFASOC [12]).

7. A salient feature of the article is that the plaintiff corporation is not named at all. This circumstance was the focus of much of the argument about the adequacy of the pleading. The plaintiff’s case is that NuCoin is the plaintiff corporation’s product or property. The plaintiff also says that NuGenesis is a trademark owned by it, referrable to “a project within the plaintiff’s business” (PFASOC [12A]). It pleads that NuGenesis Pty Ltd “is an independent company founded by Mr Faraj on 12 August 2021, and “it was not responsible for the development of NuCoin” (PFASOC [13]).

8. To resolve the issues, it is perhaps well to consider the governing substantive and adjectival law. In Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69 (“Palmer Bruyn”) Gleeson CJ stated (at [1]) that in order to succeed in an action for the tort of injurious falsehood:

“… it was necessary to establish that the [defendant] maliciously published a false statement about the appellant, its property or business, and that actual damage resulted from such publication.”

His Honour also said:

“… Injurious falsehood may involve the making of statements which, although untrue, are not defamatory of the person about whom, or about whose property or business, they are made. But it is the falsehood which must cause the harm; harm of a kind which is intended, or of a kind which is the natural and probable consequence of the making of the false statements.”

9. Gummow J in the same case said (at [52]):

“… generally, it is said that an action for injurious falsehood has four elements: (1) a false statement of or concerning the plaintiff's goods or business; (2) publication of that statement by the defendant to a third person; (3) malice on the part of the defendant; and (4) proof by the plaintiff of actual damage (which may include a general loss of business) suffered as a result of the statement.”

His Honour pointed out (at [58]) that while the same factual matrix may found actions in both defamation and injurious falsehood, there are important distinctions between them. His Honour emphasised that:

“It is for the plaintiff in injurious falsehood to establish falsity, malice and special damage, burdens not imposed upon the plaintiff by defamation. On the other hand, the inhibition upon the use of the injunction to restrain further publication of defamatory material does not apply to injurious falsehood; a rationale for the distinction is said to be that the latter tort protects proprietary and commercial rather than personal interests.”

10. His Honour pointed out that the action for injurious falsehood is in many respects more closely allied to deceit than defamation (at [59]). However, the tort of deceit consists of misrepresentations made to the plaintiff upon which he acts to his detriment; injurious falsehood consists of misrepresentations made concerning the plaintiff to others whereby the plaintiff suffers loss through the actions of those others: (Palmer Bruyn at [59]; Salmond on the Law of Torts (10th Ed, 1945) p. 588).

11. Aspects of injurious falsehood were covered by section 5 of the former Defamation Act 1958 (NSW) (repealed), which provided, inter alia: “any imputation concerning any person … by which he is likely to be injured in his profession or trade … is called defamatory” (cf Defamation Act 2005 (NSW), s 6(3)). In Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632 (“World Hosts”), World Hosts, the owner of a restaurant, sued over a news item in T**he Australian newspaper about the bankruptcy of its employed manager, which stated he was the owner of the restaurant. World Hosts were not named. The corporate plaintiff did not plead any inuendo or any extrinsic facts to establish that some readers would know World Hosts to be the owner.

12. In World Hosts, applying Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1, Mason and Jacobs JJ held that section 5 of the Defamation Act 1958 (NSW) did not require that for an imputation to be actionable it should disparage the plaintiff’s reputation. Their Honours continued (at 640):

“It was enough that there was an imputation concerning the plaintiff and that it was likely to injure his reputation, to injure him in his profession or trade or that it was likely to cause others to shun or avoid or ridicule or despise him (s 5). Consequently, when a report defamed the owner of a named business, without naming him, and the imputation was likely to injure that business, it was enough in our opinion for the plaintiff to prove that he was the owner of the business and that the defendant published the matter in question, without proving that persons who read the report knew that the plaintiff was the owner of the business” (my emphasis).

13. Aicken J referred to the common law position in defamation cases was that if the plaintiff was not named in a publication, it must be proved that the allegedly defamatory matter was published to persons who knew the special facts and that such inuendo must be pleaded (p. 645). However, his Honour said at (p. 645):

“In a case of injurious falsehood in the common law sense knowledge by the reader of the identity of the owner of the goods or the business does not appear to be material, and certainly there seems to be no case which decides that it is. The Defamation Act 1958 does not expressly address itself to this question” (my emphasis).

His Honour otherwise agreed with Mason and Jacobs JJ.

14. I should also say that as the plaintiff’s case is not one of defamation, it is unnecessary for the Statement of Claim to comply with Division 6 of Part 14 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) (rr 14.30). Nor with the provision of particulars in conformity with Division 4 of Part 15 UCPR ( 15.19). It is, of course, necessary for the plaintiff to comply with the provisions of Part 14 generally when pleading and in particular Divisions 3 and 4 so far as they are applicable. Likewise, Division 1 of Part 15 so far as applicable is required to be complied with. Of particular relevance are Rules 15.3 and 15.4 requiring all such particulars of, inter alia, misrepresentation (rule 15.3) and malice or any fraudulent intention (rule 15.4) as are necessary to enable the defendant to identify the case that the pleading requires it to meet (rule 15.1).

15. So far as the requirements of pleading are concerned in the case at hand it is necessary to refer to rule 14.7 being that a party’s pleading must contain only a summary of the material facts on which the party relies, and not the evidence by which those facts are to be proved. Rule 14.8 requires a pleading to be as brief as the nature of the case allows. Rule 14.9 requires the effect of documents or spoken words, so far as material, to be stated. The precise terms must not be stated except so far as those terms are themselves material. rule 14.14 requires that a plaintiff plead specifically any matter that, if not pleaded specifically, may take the defendant by surprise. I appreciate these requirements are basic, but they are not infrequently overlooked in practice.

16. Applying World Hosts*,* it was not necessary for the plaintiff to plead the extrinsic facts necessary to prove either identification or true inuendo. The cause of action sought to be propounded by the Statement of Claim is in injurious falsehood, not defamation. It is sufficient that the plaintiff: plead that NuCoin is its product or property; plead and particularise the false statement or statements concerning NuCoin made in the article of 12 April 2025 including particularisation of the facts relied upon as demonstrating falsity; plead publication of each statement by the defendant to a third person or persons; plead and particularise malice as required by UCPR 15.4*,* on the part of the defendant; and plead and particularise special or actual damage including any general business loss. So far as causation is concerned, it is necessary to plead that the special or actual damage suffered was the natural and probable consequence of the defendant’s false statements as pleaded.

17. I now turn to the specific deficiencies with the PFASOC. It may be said that the matter appearing under the heading “Material Facts” is capable of being understood as averring that NuCoin is the product or property of the plaintiff but they do not do so directly. The matters appearing between paragraphs 18 and 18I fail to provide a narrative of the material facts relied upon. The approach adopted is somewhat discursive. The pleader engages and joins issue with matters stated in the article by reference to evidential facts the plaintiff may wish to prove to establish falsehood in due course without setting out a narrative of the material facts upon which it relies. Paragraph 18D pleads publication, and while there is ample pleading that the plaintiff complained to the defendant that article contained false representations, there is no clear pleading of which particular statements were complained of nor any averment that each statement complained of was in fact false. Paragraph 18F pleads that a concerns notice was served but that matter is irrelevant to a claim brought in injurious falsehood.

18. Under heading, “Particulars”, paragraphs 19A to 25C do not provide particulars of any necessary element of the cause of action, but seem, again, to summarise what may be evidence that the plaintiff wishes to lead at the trial to prove falsehood by discrediting persons whom the plaintiff assumes to be the journalist’s sources.

19. At paragraph 25C there is an allegation that “a number of the plaintiff’s existing and prospective customers, partners and associates identified the plaintiff as the subject of the article”. As I have said, this pleading is not necessary, although evidence from those persons would be relevant at the trial.

20. Under the heading, “Pleadings and Elements of Injurious Falsehood”, a number of misrepresentations are sought to be pleaded by paragraph 42. The pleading does not clearly identify the statements in the article alleged to be false or what the true facts are. The pleading is discursive and strays well beyond the material facts into areas of comment and supposition.

21. Under the subheading, “Malice” particulars are stated with greater cogency and clarity, but l as a consequence of my earlier rulings in relation to the inadequacy of other aspects of the PFASOC, they too should be struck out to allow the plaintiff the opportunity of repleading its whole case. The defendant complained of the use of the phrase “foul play” in paragraph 43(b) and I agree that the expression is too vague to be capable of informing the defendant of any specific matter material to the case it has to meet.

22. The allegation and particulars of damage at paragraph 44 are mostly pleaded with sufficient particularity to enable the defendant to understand the plaintiff’s case in this regard and the test of causation is, with respect, accurately stated in accordance with Palmer Bruyn. Again, however, given that there is a substantial need to replead, paragraph 44 should also go providing the plaintiff with the opportunity to consider how that part of the pleading might best be put. I emphasise, however, the expression “including but not limited to” has no place in any pleading. It introduces uncertainty and ambiguity into the pleading. The defendant is entitled to know the whole of the plaintiff’s case. The use of that expression deprives it of confidence that it understands the case the plaintiff seeks to make against it. Where for good reason a plaintiff cannot fully particularise an element of its case for now, that fact should be stated, the reasons explained, what steps are being taken to remedy the shortfall explained and a statement as to when the shortfall is expected to be made good provided.

23. For these reasons my orders are:

24. Strike out the whole of the pleading contained in the Statement of Claim with leave to replead on or before 26 March 2026.

25. Refuse leave to rely upon the pleading set out in the Minute of Proposed Further Amended Statement of Claim.

26. Any amended pleading is to be served on the defendant on or before 26 March 2026. It is not to be filed without first obtaining leave of the Court. A copy may be lodged with the Chambers of the List Judge.

27. List the matter for further directions on 27 March 2026 at 9:30 a.m.

28. The plaintiff is to pay the defendant’s costs of the application.

**********