Australand Holdings Limited v Transparency & Accountability Council Incorporated [2008] NSWSC 669 | Case summary

Australand Holdings Limited v Transparency & Accountability Council Incorporated [2008] NSWSC 669 | Case summary | Zoe

[12]

JUDGMENT 1 HER HONOUR: In 1998, Mrs Sia Baltinos, the wife of the second defendant, purchased a house on a block of land at Concord. Mr and Mrs Baltinos planned to demolish the house and build a new one. They had plans drawn by an architect and approved by Concord Council, but they were very apprehensive about retaining a private builder. They had heard media reports of builders defrauding their customers and going into liquidation with no assets. They went to Homeworld at Kellyville in the hope of retaining one of the large, well-known companies to build against their plans. However, all the builders they spoke to at Homeworld said they would only build their own exhibited houses. 2 Finally, Mr and Mrs Baltinos spoke to Ms Michelle Kuntze, a sales consultant employed by the plaintiff ("Australand"). This case has its origins in the discussions that followed. Mr Baltinos says that Ms Kuntze told him Australand would not build against the plans that had been approved by Concord Council, because Australand would only build its own exhibited homes. According to Mr Baltinos, he and his wife decided at that point to abandon their approved plans and to build a project home instead, so they could have their home built by one of the large building companies. They went back to see Ms Kuntze and chose an Australand house, the "Marsden 251 Classic with spa". Mr Baltinos came away from their discussions believing, in effect, that he was dealing with Australand rather than a private builder. 3 In fact, in due course, Mrs Baltinos entered into a building contract with Robert J Hodge Constructions Pty Ltd ("Hodge"), a company described by its principal and by Australand as Australand's "nominated builder", but which was not related to or backed by Australand in any relevant sense. Mr Baltinos asserts that, in the events that followed, his worst fears were crystallised: the builder stopped paying the sub-contractors, there were many problems with the construction of the house and Mr Baltinos ended up completing the works himself. In February 2002, the builder went into voluntary administration. It was placed in liquidation in March 2002. Mr Baltinos complained to Australand, but they said his dispute was with the builder. 4 Years later, and after several rounds of other litigation, Mr Baltinos remains very unhappy with the conduct of Australand as he perceives it. He believes he has been wronged. He raised his grievances with a group of people to whom he refers as his "study group". In due course, and apparently for the obvious reason of protecting themselves from personal liability in respect of its acts, the members of the study group had it incorporated as an association on 2 December 2005. They called it "Transparency and Accountability Council Incorporated". That association is the first defendant in these proceedings, referred to hereunder as the Council. Mr Baltinos is its public officer and its representative in these proceedings.

[16]

8 The interim report is marked as a confidential document and was sent to Australand on 18 August 2006 under cover of a letter inviting a response. The report stated that it represented the first stage of a two-stage inquiry and that the final report would be served only on Australand, providing there was a resolution with the complainant (Mr Baltinos). It stated that, if there was no resolution, the final report would be released to the public. It stated that the evidence submitted by the complainant was well documented and "the result of three years of careful investigation by a licensed investigator". Mr Baltinos confirmed in evidence that in fact he was the licensed investigator referred to. 9 It is difficult to give a concise summary of the contents of the interim report, which suffers from a combination of complexity of structure, prolixity and obscure expression. Section 5 of the interim report reproduces the complaint submitted to the Council by Mr Baltinos which sets out, in fairly extravagant terms, the history of his dealings with Australand and the builder, with references to the documents said to sustain the complaint. At the heart of the complaint is the contention that Australand's marketing suggested it would build its houses on anyone's land, whereas (so it is contended) the true position was that Australand would not build on land privately owned and was engaged in a scheme of passing those jobs to a private, independent building company, whilst taking an illegal secret commission of $10,000 per job and representing to the client that the builder was in some way associated with Australand. The complaint contends that the description of the builder as Australand's "nominated builder" was a misleading designation. 10 One of the matters on which Mr Baltinos placed considerable reliance in his complaint to the committee was the existence of an agreement between Australand and the builder under which, for a fee of $10,000, Australand granted the builder a licence to build the house for Mrs Baltinos using designs and specifications in which Australand had copyright. Mr Baltinos described that document as "a fake". In his understanding, its falsity was proved by the existence of a letter from Ms Kuntze to the builder which, in effect, introduced Mrs Baltinos to the builder, stating that she would "like a tender to build a Marsden 251 on her land". Mr Baltinos believes that letter gives the lie to the recital in the licence agreement that states "the builder seeks from Australand a licence to build a dwelling house utilising certain of those plans, designs and specifications in relation to a particular building site nominated by the builder". The gist of that contention appears to be that, since it was Ms Kuntze who introduced Mrs Baltinos to Mr Hodge, it was false to state that the site was nominated by the builder. 11 It was common ground that Mr and Mrs Baltinos were not informed of the existence of the licence agreement or the obligation of the builder to pay a licence fee to Australand for its use of the designs. In my view, however, there is no inconsistency between the two documents. The fact that contact with the builder was instigated by Australand does not mean that the builder did not seek the licence or nominate the site for the purposes of the agreement. I do think, however, that it is unfortunate that people in the position of Mr and Mrs Baltinos were not informed of the arrangement. That issue is discussed further below. 12 Section 3 of the interim report sets out the committee's findings in respect of Mr Baltinos' complaint. Five allegations attributed to Mr Baltinos are set out in that section and there is a finding in respect of each allegation. The allegations do not appear to be drawn in terms from the complaint reproduced in section 5, suggesting the possibility of additional input from Mr Baltinos into the formulation of the findings. 13 Each finding is supported by a number of discrete propositions, which are described as "evidence" but which are, in the main, statements of argument or conclusion. In respect of each of the five findings and the supporting propositions, the "voting results" of the committee are set out. In each case, all three of the members of the committee (who do not include Mr Baltinos) voted in favour of the finding or supporting proposition. 14 Section 7 of the interim report is headed "TACIC documentary forensic analysis and documentary evidence submitted to the inquiry by the complainant". It contains a detailed analysis of the documents relied on by Mr Baltinos to sustain the complaint and articulates findings and conclusions in respect of those documents. As noted above, Mr Baltinos conceded that he was the private investigator referred to at the outset of the report. However, he denied that he was the person who carried out the forensic analysis of the documents he submitted. 15 The final report, in summary, notes the absence of any response to the interim report, "cancels all restrictions on confidentiality" of the interim report and approves the release of the final report adopting the findings of the interim report. 16 The leaflet summarises the findings and warns prospective customers and members of the public not to deal with Australand until reading the leaflet carefully. 17 It is admitted by the Council in its Amended Defence that the allegations complained of by Australand are conveyed by the documents. Mr Baltinos has not made that admission. However, as already noted, he represented the Council in the proceedings and in fact verified its defence. In those circumstances, it is curious that he has not joined in the admission. In any event, the allegations as formulated by Australand are drawn almost verbatim from the findings recorded in the interim report, confirmed in the final report and summarised in the leaflet. I am satisfied that the documents convey those meanings not only as allegations but also as findings made after thorough investigation.

[17]

18 The Council also admits that it has published the documents and it threatens to continue to publish the documents unless restrained. The leaflet states: "The legal advisors of the Council have advised us that Australand Ltd may attempt to take restraining orders in the Supreme Court to stop the Transparency & Accountability Council Incorporated (TAC) distributing this and other material to the Public and the Media, if such action is taken by Australand Ltd. we shall welcome it, as it will give us a further opportunity to expose Australand's directors and management to the Public this time in a Court of Law." 19 Mr Baltinos denies any intention on his own part to publish the material. As already noted, however, he is the public officer, and the representative in these proceedings, of the entity that openly makes the threat to publish the material unless restrained. The significance of those matters is discussed below. Causes of action relied on by Australand 20 Australand claims that the threatened conduct of publishing the documents (and the allegations made in them) would constitute the tort of injurious falsehood and is therefore liable to be restrained. Alternatively, an injunction is sought pursuant to s 65 of the Fair Trading Act 1987 on the ground that publication of the material would contravene s 42 of the Act. 21 The principal factual issue in the proceedings is whether the allegations made in the documents are false or misleading or deceptive. Although that issue may need to be formulated differently for the purpose of each cause of action, the underlying question is essentially the same. 22 The claim based on the tort of injurious falsehood raises an additional question as to the state of mind of the defendants, malice being an element of the cause of action. The primary issue raised on the case as argued is whether the test of malice is subjective. Australand contends that it is sufficient to establish that harm to it is the natural and probable consequence of the publication.

[21]

30 The principal difference between the two versions is that Mr Baltinos says that Ms Kuntze made no reference to the fact that Australand did not build at Concord and no suggestion that anyone other than Australand would be the builder, whereas Ms Kuntze's version suggests that she repeatedly referred to the fact that the house would be built by Hodge and not by Australand. I do not accept either as a reliable version of events. 31 In the case of Mr Baltinos, in my opinion he has become so consumed by his quest for justice as he perceives it that he has lost all detachment and impartiality. He has retold the story many times and it has become a kind of oral history, bending under the weight of repetition and the overlay of facts learnt after the event. 32 Ms Kuntze, on the other hand, first attempted to set out her version of events last year, seven years after the conversations took place. Her recollection of the first meetings in late January or early February 2002 was unaided by any contemporaneous note. She had a practice of making brief and incomplete notes of meetings and telephone conversations with clients but only when she thought they might proceed to a contract. In the case of Mr and Mrs Baltinos, she did not start making those notes until 26 February 2000. Having regard to the passage of time between the first meetings and the time she prepared her affidavit, her evidence of the early conversations must be approached with caution. 33 As to the conversations of which Ms Kuntze had a note, her account was not consistent in all respects with the notes. After comparing her evidence with her notes and other documents brought into existence at the time, I have reached the view that Ms Kuntze's version of events exaggerated the clarity and frequency with which she explained the true position to Mr and Mrs Baltinos, and understated the role she played in coordinating the many steps that preceded the signing of the contract between Mrs Baltinos and the builder later in the year. In my view, Ms Kuntze's evidence on those matters reflected the natural tendency of many people to look on past events through the prism of self-interest, filtering out any matters they perceive reflect badly on themselves.

[22]

34 The evidence of Mr Baltinos was that he met Ms Kuntze when he went to Homeworld in search of a reputable builder who would build against their plans. He showed her the plans approved by Concord Council. She told him that Australand would only build its own exhibited homes. He explained to her that the only reason they wanted to have the house built by a big company was that they did not trust small, private builders. She was very sympathetic and agreed that many builders have "gone broke" but she reassured them that Australand was a big company. She said Australand had been building for over 70 years and was a billion dollar company. 35 According to Mr Baltinos, after that meeting he and his wife decided to abandon their plans and to build a project home. He says they went back to see Ms Kuntze and discussed having the "Marsden 251" which was advertised at a price of $132,800. She discussed reducing the frontage because their land was narrow and, according to Mr Baltinos, she assured them that the construction would not take more than nine months and that she would hand them the keys "by the end of October" provided that they placed an order immediately. 36 Mr Baltinos denied that Ms Kuntze told him Australand was using a private builder. He said she never mentioned Robert J Hodge Constructions. According to his version, Ms Kuntze said, "we shall send our man to inspect your land". He said she also asked him to provide a plan of the sewerage and a survey. That is consistent with a facsimile dated 21 February 2000 from Ms Kuntze to Robert Hodge informing him that Mrs Baltinos wanted a tender and sending him the survey and the sewerage plan. 37 Ms Kuntze had no note of the conversation that occurred at that initial meeting. Her first account of the conversation was in the form of an affidavit sworn by Australand's general counsel, Mr Michael Newsom, on information and belief. He stated that Ms Kuntze had informed him that Mr and Mrs Baltinos asked her whether Australand would construct the Marsden 251 Classic at their property in Concord and Ms Kuntze replied that Australand did not itself build residential houses in Concord but that Australand could refer them to a builder who might be able to assist them. 38 In August 2007, Ms Kuntze swore an affidavit in which she set out in full the conversations she said took place. She said that, in about late January or February 2000, Mr and Mrs Baltinos approached her and said that they owned a narrow block of land and would like to build a home on it. She asked where the block of land was and they responded that it was in Gipps Street, Concord. She said "Australand does not build homes at Concord, but I can refer you to a nominated builder, Robert Hodge, who might build an Australand designed house in that area."

[25]

47 Those notes are not consistent either with the version in the affidavit (the notes indicate that Mr Baltinos had received the tender by 1 March, not that he was chasing it up on that date) or with the corrected version given in evidence in chief that the date of that conversation was 26 February (the notes suggest Robert had not yet sent the quote on 26 February, whereas the sworn account is that Robert told her on 26 February that he had sent the finalised tender to Mr Baltinos). 48 Hodge in fact sent a tender on 28 February 2000 addressed to Mrs Baltinos "c/o Australand Properties Homeworld 3". Mr Baltinos said that when he received that letter, in which Robert J Hodge Constructions Pty Ltd identified itself as "the nominated builders for Australand Properties", he did not know who they were. His wife said, "Well, what's this?" and he replied, "Probably they're the subcontractors, you know. I don't know. They'll probably work with Australand, I don't know." He rang Ms Kuntze. His evidence was that she said "Oh they are alright, they've been building for Australand for a long time". He raised a concern with her that the price had been increased. According to Mr Baltinos, Ms Kuntze said "Trust Robert. He's very honest". In his oral evidence, Mr Baltinos added "I'm not a hundred percent sure, but I think she said 'Oh after all Mr Baltinos you're dealing with a billion dollar company'". I do not accept that Ms Kuntze made that last remark. It seemed to me to be an embellishment thought up by Mr Baltinos in the witness box. 49 I interpolate to note that there is a curious reference to Mr Hodge in a much later letter sent by Mr Baltinos to Mr Crottey, the managing director for Australand, on 12 September 2001 when Mr Baltinos was seeking assistance from Australand to solve the problems he was encountering with the construction works. The letter states: "As I have informed you we had similar approved plans by Concord Council for a two-storey residence to be built on the same land, but because we were not confident to give the job to an independent builder (including Mr Robert Hodge who tendered also), my wife and I decided to have a project home instead, as such a construction would have had to be undertaken by a reputable firm" 50 That is inconsistent with the suggestion in Mr Baltinos' evidence that, when he received the tender in February, he wondered who Robert Hodge Constructions was. It suggests a preparedness to embellish. 51 Ms Kuntze said that on about 2 March, she had a further telephone conversation with Mr Baltinos during which she said words to the following effect: "You need to talk to Robert Hodge about anything to do with the tender and building. I cannot help you because it is Robert who is building the house, not Australand. That is why I keep suggesting that you ring Robert Hodge direct." 52 She said that she followed that conversation up with a further call to Mr Hodge during which she said: "Mr Baltinos has called me again and said that he would be arranging for the demolition of the existing house at Concord. Could you please call him to discuss the matter - you are the builder, not Australand." 53 Her note of 2 March says: Thurs 2/3/00 = 10.50am. Spoke to Solon (he rang = 10.15am) -won't take demolition - he will arrange. 54 In her evidence in chief, Ms Kuntze gave evidence that the conversation with Mr Baltinos said in her affidavit to have happened on 2 March actually happened on 1 March. She said that her comment on that occasion was made in response to Mr Baltinos telling her that he had received the tender and had some questions he wanted to ask. The upshot of that correction is that her sworn evidence as to a conversation on 1 March was that Mr Baltinos said that he had received the tender and that he had some questions he wanted to ask her about, and that she said: "You need to talk to Robert Hodge about anything to do with the tender and building. I cannot help you because it is Robert who is building the house, not Australand. That is why I keep suggesting that you ring Robert Hodge direct. I don't have a copy of the tender anyway". 55 That version was still inconsistent with the note dated 1 March set out above, which in my view suggests that she was chasing up a copy of the tender for herself so that she could discuss it with Mr Baltinos. 56 In response to concerns expressed by me as to some unexplained discrepancies between the notes and the sworn evidence, Mr Andronos recalled Ms Kuntze and she made yet another correction to her evidence, saying that two conversations dealt with in her affidavit as having occurred on different days in fact both occurred on 1 March. That evidence did not advance the matter. It meant that the sworn evidence, as it finally stood, of conversations that occurred on 1 March was more consistent with the notes of that date, but it also had the result that the evidence of the 26 February conversation as it finally stood was completely inconsistent with the note. The evidence (as finally corrected) was that the only conversation on 26 February was a call from Mr Baltinos in which he chased her up for the tender and she told him to call Robert because he was the one building the house. The notes record only a phone call by her to Robert. 57 Ms Kuntze's further evidence included the following exchange (the question is mine):

[29]

She says that she followed that conversation up with a further call to Mr Hodge saying that Mr Baltinos kept ringing her about the house and asking Mr Hodge to call Mr Baltinos. However, her note dated 5 March 2000 suggests that she did participate in some discussion as to the terms of the tender on that occasion. It says: "Sun 5/3/2000 = 2.10pm. Spoke to Solon while he was at Homeworld - He will give cheque to Robert Hodge as he didn't have his cheque book with him. (Solon previously had a different house design approved & will now go with our one) - price for fully ducted airconditioning & 3 phase power. - wants tender subject to plans being approved by the bank - said this should be no problem & I'd let Robert know. Solon's 9743.3224 TONIGHT (0409) 554.227 Robert Hodge 2.20pmish Message left for Robert to ring Solon tonight, on above no. to arrange Solon to sign tender & drop cheque in." 60 Ms Kuntze's contemporaneous notes are not consistent with either her original version of the conversations set out in her affidavit or her oral evidence. Where, in her evidence, she stated that she repeatedly told Mr Baltinos he should be dealing with Robert and not with her as Robert was the builder, the notes indicate that she regularly discussed details of the proposals with both Mr Baltinos and Mr Hodge and acted as an intermediary in their dealings. I cannot accept her account of the conversations as being wholly reliable. 61 As already indicated, I also have substantial reservations about the reliability of the evidence of Mr Baltinos. The result is that it is not possible to make findings with any confidence as to many of the disputes as to what was said. It seems likely that the original conversations, unlike the accounts of them given in evidence, were amiable, perhaps relatively vague as to detail and not littered with self-serving statements. 62 In my view there is, however, no basis for concluding that Ms Kuntze set out to deceive Mr Baltinos as to the true status of Hodge and I am satisfied that she did not. She seems to have been prepared to give a great deal of assistance both to Mr Baltinos and to Mr Hodge and that may have contributed to a misconception on the part of Mr Baltinos, but not through any fault on Ms Kuntze's part. 63 Nonetheless, I am persuaded that Mr Baltinos probably came away from his initial discussions with Ms Kuntze believing that he was dealing with Australand and that the house was going to be built by a company engaged by Australand as a subcontractor. Events after the initial conversations 64 On 16 March 2000, the builder and Australand entered into the licence agreement already referred to pursuant to which Australand granted the builder a licence to build a house for Mrs Baltinos using the Australand design. It is common ground that Mr and Mrs Baltinos were not informed of the existence of that agreement. 65 On 19 July 2000, Australand sent an internal memorandum to client advisors and Homeworld notifying them that management had reached a decision that they would no longer offer contract homes to be built on home sites other than Australand estates and, as a consequence, they would not be referring any customers to Australand's previously nominated builder, Hodge. The memorandum records an intention to be "supportive" to all customers previously referred to that company. It asks staff to remove all marketing material which states "we will build on your land or ours". 66 On 25 July 2000 Australand wrote to Hodge to inform him that they would no longer refer building work to him, citing difficulties with his fiscal management and concerns as to the manner in which the customers referred to him were being managed. It is common ground that Mr and Mrs Baltinos were not informed of those events either. Their significance is considered below. 67 The negotiations between Mr and Mrs Baltinos and Hodge continued until late November 2000 when the building contract was entered into between Hodge and Mrs Baltinos. Mr Baltinos did not have any further dealings with Australand until 7 September 2001 when he wrote to its managing director to complain about the progress of the construction. That letter states: "This is to advise you that your nominated builder acting for your company is unable to complete the above house within the twenty-eight weeks allocated for its complete construction".

[32]

"Principal activity: Receive complaints from the public" 71 He submitted that the publication of the representations and the documents that contain them fell within the wider definition of "trade or commerce" contained in s 4 of the Act. That argument assumed that the Council undertakes the activity of receiving complaints as a business, without addressing that issue. The only authority referred to by Mr Andronos on the issue of the applicability of the Act was Chapman v Luminous Pty Ltd (2001) 123 FCR 62 at [182] where von Doussa J noted that the definition of trade or commerce in s 4(1) of the Fair Trading Act is a wide one, "perhaps reflecting the fact that the New South Wales Parliament is not under the constitutional limitations of the Federal Parliament". 72 By their Amended Defence, the defendants disputed the applicability of the Fair Trading Act. The Council admits that the committee is the author and distributor of material criticising the conduct of the plaintiff but contends that has been done "in the public interest". The Council pleaded by way of defence that it is "a non-commercial entity". 73 In Fasold v Roberts (1997) 70 FCR 489, Sackville J considered the issue whether an unincorporated association known as Noah's Ark Research Foundation (NARF), established to further the purpose of investigating the supposed site of the remains of Noah's Ark, had engaged in trade or commerce within the meaning of the Fair Trading Act. His Honour approached the issue by first considering whether the conduct of the association demonstrated that it was engaged in a "business" within the meaning of the Act. As in the present case, the contention was that NARF was an organisation carrying on a business otherwise than for profit. After a summary of the relevant authorities as to the meaning of the word "business", Sackville J said at 524G: "The nature of non-profit enterprises can vary from those which are essentially commercial in character (cf Re Ku-Ring-Gai Co-Operative Building Society (No 12) Ltd; Re Dee Why Co-operative Building Society (No 29) Ltd (1978) 36 FLR 134 at 166-167 per Deane J) to those which exist entirely for charitable or altruistic purposes. In my view, the less commercial the character and objectives of an organisation, the greater the degree of system and regularity required for the organisation's activities to be characterised as a ``business''. This approach, in my view, is consistent with the purposes underlying the Fair Trading Acts, namely to establish standards of conduct applicable to commercial and consumer transactions: Prestia v Aknar at 180 , 183 . If the net is cast too widely, the legislation will apply to transactions that are not truly commercial in character and confer protection on persons who cannot fairly be described as consumers." 74 The conclusion reached by Sackville J was that the activities carried out by NARF lacked the degree of system and regularity that is normally required before such an organisation can be said to conduct a business. Central to his Honour's reasoning was the fact that NARF's objectives were not primarily trading or commercial in character. Its principal objectives revolved around the significance of Noah's Ark and reflected the religious and ideological orientation of its founding members. 75 However, I accept that there is not a great deal of assistance to be obtained from comparing the facts of this case with those in other cases. There are many points of distinction between the facts here and in Fasold, not least among which is the fact that NARF remained an unincorporated association at the time of the relevant conduct. The critical question is whether the activities or undertaking of the Council amount to a business. 76 Regard should be had to the objects of the Council. In its application for incorporation, Mr Baltinos stated that the objects of the incorporation would be to help democracy work better and to make representations to various authorities on behalf of complainants. The objects identified in the Council's constitution include to investigate and take action on complaints against public officials; to advise, assist, organise and participate on all levels of legal class action; to ensure that various people including company directors conduct themselves in a "transparent and accountable manner"; to release information collected by the Council to the media at the completion of investigations and to expose any public official who in the opinion of the Council after the completion of an investigation has failed or refused to correct the problem. 77 As already noted, the only complaint in fact investigated by the Council so far has been the complaint made by Mr Baltinos in respect of the conduct of Australand and the builder. 78 The activity of the Council could not be said to be essentially commercial in character nor, on the other hand, could it be said to be entirely for charitable or altruistic purposes. Notwithstanding the lofty objects articulated in its constitution, it is doubtful whether its purposes can be characterised as entirely altruistic when, so far as its short history suggests, its true reason for being is to air the grievances of one of its officers under the cloak of limited liability. 79 There was very little evidence as to the activities of the Council apart from the committee's compilation of the report. There was no evidence to suggest any kind of system or regularity in the conduct of its activities of the kind one would expect to see in an organisation whose undertaking may be characterised as a business. Mr Baltinos said that the Council evolved from an informal study group: "Q. Were the people who were in the study group, the people who then formed the council? A. Yes, but it was a very loose--

[38]

81 During the course of his opening, Mr Andronos suggested in response to a question from me that the trade or commerce of Australand might be a sufficient basis to enliven the relevant provisions of the Fair Trading Act. That argument was not developed during the hearing, but an opportunity was given to the plaintiff following the conclusion of the hearing to identify the authorities upon which it wished to rely in support of that proposition. 82 In response to that invitation, Mr Andronos referred to Houghton v Arms (2006) 225 CLR 553 at [34]-[35] where the High Court noted that statements made by a person not himself or herself engaged in trade or commerce may answer the statutory expression if, for example, they are designed to encourage others to invest, or to continue investments, in a particular trading entity. The High Court cited Fasold v Roberts at 531 in support of that proposition. Mr Andronos also referred to TCN Pty Ltd v Ilvariy Pty Ltd [2008] NSWCA 9 at [48]. That paragraph simply cites the passage from Houghton already referred to. 83 As very fairly conceded by Mr Andronos, Sackville J in Fasold drew a distinction between conduct which is promotional of the trade or commerce of another and conduct which seeks to denigrate the trade of another. Mr Andronos acknowledged that the authorities to which he referred do not overrule, distinguish or extend Fasold, which relevantly followed Unilan Holdings Pty Limited v Kerin (1992) 35 FCR 272 on that issue. He acknowledged that it is not axiomatic that seeking to derogate from a corporation's trade or commerce can itself be conduct in trade or commerce. 84 In my view, to hold that the conduct of the Council and Mr Baltinos in the present case was conduct in the trade or commerce of Australand would entail an application of s 42 of the Fair Trading Act beyond the scope of that section as it has been construed in the authorities. Having considered the authorities referred to by Mr Andronos, I have concluded that the law on this issue remains as it was expressed by Sackville J in Fasold at 531D: "Public statements by a person not engaged in trade or commerce himself or herself, may be made in trade or commerce if designed to encourage others to invest, or continue investments, in a particular trading corporation: Meadow Gem ." 85 To extend the application of s 42 to public statements by a person not engaged in trade or commerce himself designed to discourage others from engaging in trade or commerce with a particular trading corporation strains the limits of the reasoning in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 from which the principle identified by Sackville J set out above is derived. It was held in Concrete Constructions at 604 that s 52 of the Trade Practices Act is concerned with the conduct of a corporation towards persons "with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character." 86 In Fasold, Sackville J noted that it has been accepted that the principles laid down by the High Court in that decision apply to the equivalent provisions in the Fair Trading Acts, notwithstanding the extended definition of "business". In my view, it is implicit in the reasoning sustaining those principles that, although s 42 may apply to public statements by a person not engaged in trade or commerce himself, that application is confined to public statements by a person seeking to represent or promote the activities or transactions that bear the necessary trading or commercial character. Conduct by a person not himself engaged in the relevant activities or transactions that seeks to denigrate those activities may be amenable to other remedies but does not appear to me, on the current state of the law, to bear the necessary trading or commercial character to be caught by s 42 of the Fair Trading Act. Such conduct is better characterised as being in relation to, rather than in, the trade of another. Denigrating statements made by a competitor are in a different category because competitors will be engaged in trade or commerce themselves. For those reasons, I am not satisfied that the impugned conduct in the present case is in trade or commerce within the meaning of s 42. The plaintiff's claim on that ground must be dismissed.

[39]

Liability of Mr Baltinos under the Fair Trading Act 87 If I had come to a different conclusion as to whether the conduct of the Council was in trade or commerce, it would have been necessary to consider the position of Mr Baltinos under the Fair Trading Act. It is appropriate to indicate what my findings on those issues would have been in case my conclusion as to trade or commerce is wrong. 88 The first question is whether the compilation and distribution of the documents was conduct attributable to Mr Baltinos. Mr Andronos acknowledged that, in the context of the Fair Trading Act claim, there might be room for argument as to whether Mr Baltinos was directly liable under s 42. Although Mr Baltinos was the complainant to the Council, he denied authorship or publication of the report. He said that it was written by members of the Council and that he did not give them any assistance in writing their analysis. 89 His evidence as to the leaflet was that he did not know who wrote it and that he was not present when it was written. He said that he supposed the committee must have gotten together and written it. In circumstances where he represented the Council at the hearing, I note that Mr Baltinos did not call any other person to give evidence as to how the documents were prepared. 90 Notwithstanding there being a strong basis for suspicion as to the likely contribution made by Mr Baltinos to the preparation of the documents, I cannot be satisfied that their compilation and distribution was not the work of others, as contended by Mr Baltinos. 91 The alternative basis for the claim was that Mr Baltinos was accessorily liable so as to enliven the Court's discretion under s 65(1)(c) or (e) of the Act. Australand submitted that there could be "little doubt" that Mr Baltinos was knowingly concerned in the contraventions by the Council. It was noted that Mr Baltinos was not only the complainant to the Council but its public officer and its representative in these proceedings. It was submitted that it was overwhelmingly likely that, in making the complaint, he was "knowingly concerned in - and indeed procured - the wider dissemination of the allegations of which he is the author". 92 Australand's submissions on that issue did not address the question of Mr Baltinos's knowledge and intention. A person will not have aided or abetted a contravention unless it is proven that he was aware of the facts that gave rise to the contravention and intentionally participated in it. It is not enough to be aware of the representations. Knowledge of their falsity must be established: Yorke v Lucas (1985) 158 CLR 661 at 666-669. 93 In its case against the Council, it is not necessary for Australand to prove that the Council knew of the misleading nature of the statements in question. However, Australand cannot succeed against Mr Baltinos on an accessorial basis unless it establishes such knowledge on his part. 94 The issue is complicated in the present case by Mr Baltinos' apparent conviction as to the truth of the allegations made in his complaint. What is the knowledge or state of mind required to be established by Australand in that circumstance? That question was not argued before me by either party. Since it is an issue that it is not necessary for me to decide, it is appropriate only to indicate that, if the test is whether Mr Baltinos knew that the representations were misleading or deceptive, I would have held in his favour on the basis that I accept that he genuinely, albeit unreasonably, believes in the truth of his complaint to the Council. 95 If, however, the test is whether he knew the facts that would, to a reasonable person, have indicated that his allegations were misleading or deceptive, I would have been satisfied that Mr Baltinos had the requisite knowledge and, accordingly, that he is a person who aided and abetted the Council or was knowingly concerned in its preparation of the report.

[40]

Injurious falsehood 96 I turn to consider the claim in injurious falsehood. The four elements of that cause of action are (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) actual damage suffered as a result of the statement: Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [52] per Gummow J. 97 As already noted, the Council admits past publication and openly threatens to repeat it. Mr Baltinos denies publication on his own part. 98 Mr Andronos noted that there is scant authority on the issue of the test to be applied in determining whether a person has "published" a statement for the purpose of the tort of injurious falsehood. He submitted that I should apply the test applicable in respect of the tort of defamation, which is identified in Webb v Bloch (1928) 41 CLR 331. There does not seem to me to be any relevant distinction between the concept of publication for the purpose of defamation and for the purpose of injurious falsehood. I accept that the proper approach is to consider whether Mr Baltinos has participated in the publication of the documents complained of according to the test in Webb v Bloch. 99 Applying that test, I am satisfied that, notwithstanding his denial, Mr Baltinos participated in the publication of the documents. First, he raised his grievances with the study group, which was then an informal group and not an incorporated association. In due course, he oversaw the incorporation of the association; made a complaint to that association which contains the substance of the allegations ultimately made in the report; submitted documents to them; undertook three years investigation of the complaint and provided further material as sought by the investigation committee. It was the natural and probable consequence of his acts that the findings would be published. Further, in his role as public officer of the Council, he must be taken to have authorised what was written by the Committee. 100 Further, in my view it is clear from the terms of the report, compared with the language of the original complaint and, indeed, the language adopted by Mr Baltinos in his written submissions and oral evidence and submissions, that the report is substantially derived from words originating from Mr Baltinos. I am satisfied that he has played a significant role in the authorship of the Council's documents and may properly be held to account as a publisher of that material.

[43]

The deceptive marketing conduct finding 107 Allegation (d) is that agents employed or contracted by Australand deceived Mr Baltinos. It appears to be drawn from "finding one" in the report, that Mr Baltinos "was deceived by Australand's sales agents, acting on behalf of Australand, to refer their purchase of an Australand home to a third party". 108 The deception found by the committee was Australand's failure to disclose its true relationship with the builder. A question might arise as to whether it would be sufficient, to establish the truth or falsity of that allegation, to consider whether Mr Baltinos was in fact deceived, in the sense of being led into error by the conduct of Australand's agents or employees, regardless of the state of mind of those people. In my view, however, it is clear from the surrounding discussion in the interim report that the finding was of deliberate deceit, and I have assumed that is the gist of Australand's complaint. For example, page 11 of the interim report states: "the TACIC inquiry on the evidence presented by the complainant found that Australand Limited its directors, management and sales agents presented [Hodge] as the "nominated builder for Australand". This designation was deliberately misleading and designed by Australand's management to give their clients, like the complainant and his wife, the impression that Robert J Hodge Constructions Pty Limited were either sub-contractors of Australand Limited or a subsidiary part of Australand Limited" 109 I accept that Mr Baltinos was in fact under the impression, following his discussions with Ms Kuntze, that Hodge was a sub-contractor of Australand or otherwise amenable in some way to supervision by Australand in the construction of the house. That misconception is reflected in the terms of Mr Baltinos' initial complaint to Mr Crotty referred to above. 110 I also accept that his misconception was, in some measure, contributed to by the content of his discussions with Ms Kuntze and her readiness to assume responsibility to act as intermediary between the builder and Mr Baltinos. Ms Kuntze accepted, in cross-examination, that she had been told by Mr Baltinos that they did not trust private builders to do the work and that under no circumstance would they go to a private builder. It is therefore surprising that she offered to refer them to "a nominated builder" who was in fact no more than a private builder. 111 It is likely, in my view, that Ms Kuntze was motivated by the potential to earn a commission and that, guided by that consideration, she chose to ignore the concerns expressed by Mr and Mrs Baltinos about private builders and actively encouraged them to proceed to retain Hodge. I am satisfied, however, that Ms Kuntze did not deliberately deceive Mr Baltinos as to the relationship between Australand and Hodge. In my view, it is likely that it simply did not occur to her that Mr Baltinos was under any misapprehension in that respect. 112 Mr Baltinos cross-examined Ms Kuntze at great length as to the conversations that took place between them. The cross-examination was riddled with misunderstanding on the part of both Mr Baltinos and Ms Kuntze. It assisted me to understand how the misconception arose in the mind of Mr Baltinos in the first place. In my view, from the very outset, Mr Baltinos and Ms Kuntze each embarked on the negotiations with an entirely different preconception as to how they were proceeding. Ms Kuntze thought it was perfectly obvious that she was referring them to a builder who was not part of Australand, and was not astute to the misconception under which Mr Baltinos was proceeding, because so far as she was concerned, the true position was obvious. 113 Mr Baltinos, however, had it fixed in his mind that he was dealing with Australand and has kept that idea fixed ever since. The same thinking is disclosed in the Council's report. The discussion in the interim report that seeks to sustain the deceptive marketing conduct finding is a combination of misconception and circular reasoning under the guise of objective analysis. Some of the arguments in support of the finding are only sustained if the proposition contended for is assumed as a premise of the argument. One of the contentions is that the designation of Hodge as "nominated builder for Australand" was "deliberately misleading and designed by Australand's management to give their clients … the impression that Robert J Hodge Constructions Pty Ltd were either sub-contractors of Australand or a subsidiary part of Australand Ltd". That contention is not substantiated by any evidence or by material from which an inference to that effect could properly be drawn. It appears to be based on nothing more than the fact that Mr Baltinos was in fact mislead by the use of that term, and regards it to be misleading. The report then proceeds to complain, in respect of the builder, that he did not advise the complainant that the designation was misleading. That is only one example of the kind of question-begging logic adopted in the report. 114 In my view, the expression "nominated builder" is apt to convey that Hodge was the builder named or proposed by Australand as the suitable or appropriate builder to carry out the works. It carries an implication of recommendation or endorsement but does not, in my view, convey any implication that there was a formal contractual or corporate relationship between the companies and was not misleading or deceptive in that respect. 115 Another contention made in support of the finding of deceptive marketing conduct was that Australand had a "permanent arrangement" with Hodge. The arrangement was said to be that Australand would present Hodge as its nominated builder and, in return, Hodge would pay Australand $10,000 for each successful contract negotiated with Australand's clients. The arrangement was said to have been advanced by the publication of advertisements, which Mr Baltinos construed as being misleading, that referred to a selection of Australand designs "to build on your land or ours". 116 Mr Newsom, the General Council for Australand, gave evidence as to the circumstances in which Australand would build on land not owned by it. In summary, his evidence was that Australand, in addition to building on its own estates, would sometimes build on land adjacent to an estate and, until July 2000, would otherwise refer the work to Hodge. After the arrangement with Hodge was terminated, staff were instructed to remove the references to "your land or ours" in advertising material. Until that point, it was possible to have an Australand house built on private land in the manner described. I accept Mr Newsom's evidence and am satisfied that the advertisements were not misleading.

[45]

(3) If: (a) a contract is entered into with the holder of a contractor licence for the construction of a dwelling that is similar to an exhibition home, and (b) the holder knows that it was entered into after the other party to the contract had inspected the home, and (c) the contract in any way identifies the dwelling to be built by reference to the home, the contract is to be taken to contain a provision that the dwelling will be constructed according to the same plans and specifications, standards of workmanship and quality of materials as the exhibition home, except to the extent (if any) that the contract and its accompanying plans and specifications provide for any departure from them." 119 The proposition was that since Australand was the exhibitor of the Marsden 251 home which Mrs Baltinos retained Hodge to build, the effect of subs 3 was that Australand was the builder and was totally responsible for the construction of the house. That argument is based on a confused analysis of the section. Sub-section 3 does not create a contract with the "person who makes an exhibition home available for inspection" referred to in subs 2. The only effect of subs 3 is to deem the inclusion of a contractual provision in a contract in certain circumstances. In the present case, the only effect of subs 3 could be to deem the inclusion of a provision in the contract between Mrs Baltinos and Hodge, assuming the conditions of paragraphs (a)-(c) of that sub-section were met. The committee's report notes that s 9 has no provision for licensing copyright plans and specifications to private and independent builders. In my view, nothing flows from the silence of the section on that issue. Indeed, the section appears to assume that the person who makes an exhibition home available for inspection within the meaning of subs 2 may not be the holder of a licence for the construction of the dwelling within the meaning of subs 3. 120 I am satisfied that the allegation that agents employed or contracted by Australand deceived Mr Baltinos, understanding the gravamen of the allegation to be deliberate deception, is false.

[46]

The illegal conduct finding 121 Allegation (e) is that Australand, in conjunction with other persons, has acted illegally in its dealings with Mr and Mrs Baltinos. It reflects "finding two" in the report. There are separate allegations as to the conduct of Australand's general counsel, Mr Newsom. Those allegations are dealt with in the discussion of allegation (f) below. 122 In some respects, the reasoning of the committee in support of the illegal conduct finding is not easy to understand. It appears in substance to be a rehearsal of the contention that it was misleading to describe Hodge as Australand's nominated builder when there was in fact no legal connection between Hodge and Australand. The illegal conduct finding appears, in substance, to be that the conduct the subject of the deceptive marketing conduct finding breached a number of specific laws. 123 The first breach of the law identified is that the designation of Hodge as the nominated builder for Australand was misleading or deceptive conduct contrary to s 42 of the Fair Trading Act. That contention has already been considered in the discussion as to the deceptive marketing conduct finding above. 124 Secondly, the committee found that there had been a breach of s 9 of the Home Building Act because no copy of the contract was given to Mr Baltinos by Australand. That overstates the obligation imposed by s 9(2), which provides only that, if the person who makes an exhibition home available for inspection is aware that persons are to be invited to enter into building contracts for the construction of similar dwellings, a copy of the form of contract must be "prominently displayed". There is no obligation to provide a copy of the contract to each person who inspects the home. Separately, the committee found that the "scheme of passing on the jobs to a private builder" contravened s 9 of the Home Building Act. I have dealt with that contention in the discussion as to the deceptive marketing conduct finding above. 125 The third finding of the committee was that there was a breach of the Fair Trading Act based on a finding that Australand's advertising was misleading in that they claimed to build houses on private land and failed to disclose their role as "sales agent" for Hodge. The first part of that allegation has been addressed above. As to the alleged failure by Australand to disclose its role as sales agent for Hodge, as with much of the reasoning of the report, the argument assumes as a premise the correctness of the conclusion contended for. As I have already indicated, there was in my view nothing inherently deceitful in the arrangement of referring people to Hodge. Mr Baltinos knew that he was dealing with Hodge, in the sense that he was speaking to him, meeting with him, receiving tenders from him and so on. The critical question is whether Australand falsely represented that the contract would be with Australand, or in some way supervised by it. As I have already found, I am satisfied that there was no deliberate deception. 126 The most serious finding of illegal conduct is that Mr Hodge and Ms Kuntze were guilty of a criminal offence of conspiracy to deceive. It is enough to say that the argument in support of that finding reflects the same circular reasoning and misconceptions to which I have already referred. In my view, the allegation is completely without foundation and amounts to a most unfair attack on Ms Kuntze. 127 There was also a finding that the amount of $10,000 required to be paid under the licence agreement was in fact a secret commission, payment of which was prohibited under the Crimes Act 1900 and the Secret Commissions Act 1905. It is not clear what offence under the Crimes Act was contemplated. The section of the Secret Commissions Act identified in the report as having been breached is s 3, but that is the definition section. Section 4 makes it an offence for an "agent" (as defined), without the full knowledge and consent of the "principal" (as defined) to accept a gift or consideration as an inducement or reward. The committee's finding proceeds on the premise that Australand was the agent of Mr Baltinos in its dealings with Hodge, that is, that it was employed by him or was acting on his behalf and that, in that capacity, it accepted the $10,000 licence fee from Hodge as a reward for referring the work to Hodge without informing Mr Baltinos as its principal. 128 A central step in the argument is the proposition that the licence agreement was a sham, not intended to operate according to its terms. There is no evidence to support that proposition. It appears to be derived from no better foundation than the general perception held by Mr Baltinos that, if he was misled, it must be because people were out to mislead him. 129 I am satisfied that the finding of breach of the Secret Commission Act is wrong. It proceeds on the misconception that Australand was in the role of agent for Mr Baltinos within the meaning of the Act and the assumption, for which there is no foundation, that the licence agreement was a sham. 130 Finally, the committee found that the failure to inform Mr and Mrs Baltinos of the dismissal of Hodge as nominated builder on 19 July 2000, the arrangement in respect of the $10,000 fee and the "illegal scheme" of passing on jobs in contravention of s 9 of the Home Building Act was misleading or deceptive conduct in breach of the Fair Trading Act. Subject to one matter, I am satisfied that those contentions are without substance for the reasons already outlined. The one matter that deserves closer consideration is the matter of Australand's failure to notify Mr and Mrs Baltinos of the termination of their arrangements with Hodge, and the question whether its silence on that issue amounted to misleading or deceptive conduct. In considering that question, it is important to bear in mind the chronology of the relevant events. 131 Ms Kuntze first made contact with Robert Hodge to introduce Mrs Baltinos in the facsimile dated 21 February 2000. On 13 March 2000, she was informed that the client had signed the tender and it was her understanding that she was entitled to claim her commission at that stage (in fact she was later told that she was not entitled to her commission until the building contract was signed). 132 The licence agreement was signed on 16 March 2000. It provided for payment of $10,000 made up of three payments due at various stages of completion of the works. 133 On 19 July 2000 Australand management communicated a decision to client advisors including Ms Kuntze that Australand would no longer offer their contract homes to be built on home sites other than Australand estates and that, as a consequence, they would not be referring any customers to their previously nominated builder Robert Hodge Constructions.

[47]

134 On 25 July 2000, the state manager of Australand wrote to Hodge. The terms of the letter are important in the present consideration and I set them out here: "As discussed previously during our meeting, Australand has agreed to monitor the referral agreement between ourselves and yourself. As a result of the recent facsimile dated 13 July 2000, it has become apparent to myself that you are still continuing to have difficulties with your fiscal management. The details as raised in the letter of 13 July 2000 are for Australand unacceptable and it raises significant concern to us as to the manner which the customers whom are being referred to you are being managed. I must confirm that our concerns rest solely with financial matters as previously discussed. As the circumstances have already changed, Australand is left with no alternative other than to discontinue with the referral of business to yourself effectively immediately. Upon which time you can demonstrate that the circumstances are such that a normal trading relationship can be established, we will resurrect this mutually beneficial relationship" 135 Mr Baltinos made attempts in these proceedings to obtain a copy of the letter dated 13 July referred to, but Australand was unable to produce it. 136 After that date, according to her notes, Ms Kuntze had no further contact with Mr Baltinos before Mrs Baltinos signed the building contract. Ms Kuntze did, however, have two discussions with Mr Hodge, apparently seeking to find out whether the contract had been signed (which was the event that triggered payment of her commission). 137 The question is whether, after Ms Kuntze had described Hodge to Mr Baltinos as "a nominated builder for Australand" who could build the house for them, the failure to inform Mr Baltinos that Hodge no longer enjoyed Australand's hearty approval amounted to misleading or deceptive conduct. As I have already indicated, I take the view that the description given to Hodge carried the implication that he was in some way recommended or endorsed by Australand as a suitable or appropriate person to be retained to carry out the works. It is implicit in the letter to Hodge terminating the arrangement that, by July 2000, Australand held grave reservations in that respect. No witness was called by Australand who had direct knowledge of the relevant events, but it was Mr Newsom's understanding that Hodge was "dismissed" as nominated builder because it owed Australand some money which Mr Hodge was late in paying and because there had been at least one complaint from a client about his performance. 138 It is relevant also that Mr Baltinos was ignorant of the fact that the sales consultant, Ms Kuntze, stood to earn a commission and Australand itself stood to earn a licence fee if the contract proceeded. Those matters might have been considered relevant to Mr Baltinos' assessment of the apparent recommendation. Mr Andronos submitted that Australand could not have terminated the licence agreement dated 16 March 2000 when it terminated its overall arrangement with Hodge because there was no event of default under that agreement. That may be so, but Australand could have told Mr Baltinos that Hodge was no longer its "nominated builder". At the time Australand made its decision in July, Mrs Baltinos had not yet entered into any agreement with Hodge. Australand, having in effect recommended Hodge, had apparently come into possession of information that caused it to resile from that recommendation but it remained silent. 139 In considering this question, it is important to bear in mind where the onus of proof lies. The case is unusual because ordinarily one would expect the question to be whether Mr Baltinos had established, on balance, that Australand engaged in misleading or deceptive conduct in contravention of the Act. However, by bringing these proceedings to restrain publication of that allegation, Australand has assumed the onus of proving, on balance, that it is false, or misleading or deceptive, to say that Australand engaged in such conduct. 140 On that issue, Australand has not persuaded me, and has not discharged the onus. It is not necessary for me to make a finding as to whether Australand's conduct was misleading or deceptive, and I emphasise that I make no such finding. If the onus were on Mr Baltinos to establish that Australand's failure to disclose certain matters amounted to misleading or deceptive conduct, he would have to establish that the circumstances gave rise to a duty to disclose those matters. In the present case, it is enough to say that I am not persuaded that the allegation of breach of the Fair Trading Act is wrong. 141 The evidence establishes that Australand was sufficiently concerned about Hodge's fiscal management and at least one complaint from a client to warrant making a decision no longer to refer work to him. It is clear that Australand must have known more at the time that decision was made than the evidence before me disclosed, but Australand did not adduce evidence from any person with direct knowledge of those matters, including the reasons for ending the arrangement. In the absence of that information, I cannot properly assess whether, in all the circumstances, Australand was under a duty to reveal relevant facts such that its silence as to the termination of the arrangement with Hodge may be said to have amounted to misleading or deceptive conduct.

[53]

Malice 150 The next question is whether the statements were published maliciously. Mr Andronos submitted that malice exists where a defendant intends to cause harm or where harm is the natural and probable consequence of the publication. In support of that submission, he cited the decision of the High Court in Palmer Bruyn at 397. In my view, as to the second proposition, the submission was misconceived. Palmer Bruyn was concerned, not with the question of malice (which was found in the appellant's favour by the trial judge) but with the question whether there was a causal relationship between the making of the false statement and the damage of which the appellant complained. It was in that context that Gleeson CJ said at 397: "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." 151 That is not a statement about malice. Australand's reliance on Palmer Bruyn, in my view, confuses the harm required to be proved to establish an entitlement to damages with the harm required to be proved to have been intended in order to establish the existence of malice. Gummow J in a separate judgment in Palmer Bruyn noted at [61] that the element of malice has been said to cause the most difficulties for courts in resolving cases of injurious falsehood, but could be put aside in that case since the trial judge's finding of malice had not been the subject of any challenge before the Court of Appeal or the High Court. I do not accept the submission that Palmer Bruyn stands as authority for the proposition that malice exists where harm is the natural and probable consequence of the publication. 152 Mr Andronos also referred to Swimsure Laboratories v McDonald [1979] 2 NSWLR 796 at 802 and to the English decision of Wilts United Dairies v Thomas Robinson Sons & Co [1957] RPC 220 at 237, a decision of the Queen's Bench Division. In Swimsure, Hunt J, considering whether to extend an interlocutory injunction to restrain injurious falsehood pending final hearing, said: "There is evidence before me of falsity, and evidence from which the inference can be drawn that the direct object of the publication was to injure the plaintiff's business, rather than to sell the defendant's product. That is sufficient to establish malice in the publication." 153 I understand his Honour's reference to the object of the publication to be a reference to the object of the publisher, that is, to his subjective state of mind. 154 In Wilts United Dairies, Stable J, after noting in passing that the case concerned a sweetened condensed milk very similar to the product that his Honour remembered consuming in large quantities at preparatory school, said: "As I understand the law it is this, that if you publish a defamatory statement about a man's goods which is injurious to him, honestly believing that it is true, your object being your own advantage and no detriment to him, you obviously are not liable. If you publish a statement that turns out to be false but which you honestly believe to be true, but you publish that statement not for the purpose of protecting your own interests and achieving some advantage to yourself but for the purpose of doing him harm, and it transpires, contrary to your belief, that the statement that you believed to be true has turned out to be false, notwithstanding the bona fides of your belief because the object that you had in mind was to injure him and not to advantage yourself, you would be liable for an injurious falsehood." 155 Mr Andronos submitted that the approach in Wilts United Dairies is consistent with the comparable principle in defamation law where, even if the defendant firmly believes his statement to be true, he is guilty of malice if his sole or dominant purpose is to harm the plaintiff: Horrocks v Lowe [1975] AC 135 at 150 per Lord Diplock. Mr Andronos submitted that the basis for that proposition is that the essence of malice is the improper purpose, knowledge of falsity being merely a means of proving the impropriety. 156 I accept that impropriety of purpose is the essence of malice. However, care must be taken when drawing comparisons with the principles applicable in the law of defamation. Where malice is alleged to defeat a defence of qualified privilege in a defamation case, the propriety of the defendant's purpose in publishing the matter complained of is measured by reference to its relevance to the privileged occasion. The existence of a sole or dominant purpose irrelevant to the occasion amounts to malice. The parameters of impropriety of purpose in the context of the tort of injurious falsehood are more elusive. 157 Wilts United Dairies suggests that the relevant distinction is between the objects of advantaging oneself and injuring another, but that may be a false dichotomy. 158 In Palmer Bruyn, Gummow J at [61] referred to the view of the English Court of Appeal that the criteria for malice in injurious falsehood are the same as at common law for libel and slander but noted that it was not necessary to consider the correctness of that view because the trial judge's finding of malice was not the subject of any challenge on appeal. The approach applied by the trial judge had been that malice is established either by showing the existence of some indirect, dishonest or improper motive, or by showing an intent to injure without just cause or excuse. 159 The apparent difficulties of definition are helpfully analysed by Mr JD Heydon, as his Honour then was, in the following passage in Economic Torts (2nd ed 1978) at 83, the first part of which is adopted in Clerk & Lindsell on Torts (19th ed 2006) at 24-13: "Malice means one of three things: either personal spite, or an intention to injure the plaintiff without just cause, or knowledge of the falsity of what is said. There has been a great deal of discussion as to which formulation is correct; this has largely been arid, because the precise formulation has hardly ever mattered. The best view now seems to be that any one of the three states of mind will suffice for liability." 160 In the present case, it was not suggested that Mr Baltinos was actuated by personal spite. The thrust of the submission put by Mr Andronos was that it was enough that the defendants acknowledged that the publication of the committee's findings would cause substantial damage to Australand. As I have already indicated, in my view that submission proceeds on a misconception as to the proposition for which Palmer Bruyn is authority. 161 Mr Andronos further submitted that, to the extent that subjective belief is relevant, the evidence established at the very least reckless indifference on the part of the defendants to the question of falsity of the allegations. I do not accept that submission. In my assessment, Mr Baltinos was not indifferent to the truth but passionate about it. Further, I am satisfied that Mr Baltinos holds an honest belief in the truth of his allegations which he has reached, not recklessly, but through a close and lengthy analysis of all the information he could gather. He has, as it is sometimes said, sought to leave no stone or any part thereof unturned. Many of his beliefs are unfounded and even irrational in some respects but that is not enough to constitute malice: cf Horrocks v Lowe at 152H - 153A. 162 The defendants denied that it was their intention to injure the plaintiff. By their amended defence, they stated: "The intention of the first defendant is the same as the media exposing a public company that was running an illegal scheme without the knowledge of their clients, and in close association with a builder known to the plaintiff as a rapacious thief, as the plaintiff received several complaints against the so-called nominated builder for Australand before its 19/7/2007 'dismissal'. It is common sense to expect a negative reaction from clients and future clients once the conduct of the plaintiff will be fully known." 163 I accept that exposure of the perceived misconduct of Australand in the public interest may have been one of the objects of publication. However, the evidence discloses that the documents were published, and are threatened to be published, with the concurrent object of inducing Australand to compensate Mr Baltinos for his perceived losses under threat of the harm that would be likely to flow from the publication of the material. Indeed, I am persuaded that that was probably the defendants' main object in publishing the material. I have already referred to some of the statements in the documents that clearly articulate the threat. It is clear from those statements that the object of both the Council and Mr Baltinos was to hold up the risk of harm to reputation as an inducement to Australand to soften its recalcitrant stance in response to Mr Baltinos' claims. 164 It is important to consider the nature of the harm threatened. The threat was not simply to "go to the media" or to publish the underlying evidence so that the public could judge the conduct for itself. Mr Baltinos went to enormous lengths to facilitate the production of a document which, in its presentation, is designed to appear to have some authoritative status. The inference I draw is that the purpose of publishing the findings was to pursue a campaign by means of a threat, not to publish the truth, but to publish a document calculated to convey the impression that Mr Baltinos' allegations had been upheld in an independent and competent inquiry. The making of that threat, coupled with the apparent preparedness not to publish if compensation is paid, undermines the contention that the exposure of misconduct in the public interest was the true object of the report. 165 The position might have been different if the content of the threat had simply been to publish a bare factual statement of the events that occurred and the underlying documents relied on by Mr Baltinos in support of his complaint. The vice of the threat made in the interim report is in the presentation of its findings as the reasoned conclusions of an independent inquiry. A threat in that form indicates an intention to expose Australand to the risk of harm to its business, not on account of the public's judgment of its conduct (as alleged in the defence) but on account of the appearance of its having been already judged adversely by some authoritative body. That is a threat in the true sense. It is a declaration of intention to inflict punishment, if no resolution is reached, in the form of publication of something more than the bare facts. 166 It is difficult to analyse those matters against the formulation of malice as an intention to injure without just cause. The justness of the cause is a matter of perception. If the statement turns out to be false, that establishes the element of falsity but in my view it is doubtful whether it could be regarded as establishing the element of malice. The formulation "intention to injure without just cause" suggests that knowledge of the absence of just cause is an aspect of the intention to injure. Mr Andronos submitted that I should find that Mr Baltinos must have known after many rounds of unsuccessful litigation that his allegations were wrong but I am persuaded that he did not falter in his views. 167 The critical question is whether the purpose disclosed by the content of the threat is an improper purpose. I have come to the view that it is. The impropriety lies in the presentation of the material as the findings of an authoritative body coupled with the preparedness not to publish if there is a resolution of the dispute. A threat to commence proceedings or to lodge a complaint to a proper authority if a perceived breach of obligation is not rectified would be in a different category. It is not necessary in the present case to consider the more difficult question of a threat to publish facts fairly presented to a journalist. The vice of the threat in the present case, as I have said, is in the expression of the allegations as authoritative findings and legal conclusions. 168 The consequence is that, notwithstanding an honest belief in the truth of the allegations, the defendants would be liable for an injurious falsehood if the documents and the allegations were published, assuming that actual damage can be established. Damage 169 As to the question of damage, the amended defence concedes, in effect, that a general loss of business would be suffered if future publication were permitted. Mr Andronos submitted that the absence of evidence of actual loss could be explained by reference to the fact that an injunction restraining publication was swiftly sought by Australand and ordered by this Court. I am satisfied that there is a reasonable probability that actual damage to the plaintiff would result if the statements were permitted to be published.

Australand Holdings Limited v Transparency & Accountability Council Incorporated

At a glance

Court

Decision date

Before

Source

Judgment (59 paragraphs)

Parties

Legislation Cited (8)

Cases Cited (10)

Cited By (9)