Ischnura Group Pty Ltd v McAuley

Ischnura Group Pty Ltd v McAuley - [2022] NSWSC 1223 - NSWSC 2022 case summary — Zoe

Background facts

Ischnura Group Pty Ltd (the plaintiff) is the registered proprietor of 8 and 8A Kariwara Street, Dundas: they are duplexes that were constructed adjoining each other. Mr McAuley (the defendant) is the registered proprietor of the adjoining property, 10A Kariwara Street, Dundas. The plaintiff is in the process of selling that property, using a real estate agent, but it is being hampered, so it alleges, by the conduct of the defendant.
On 23 and 30 July and 3 September 2022 the plaintiff's property was open for inspection to prospective purchasers. On those occasions, the defendant appeared outside the property and was observed handing out a 'flyer'. The flyer is at p 17 of Exhibit YL-1 to the affidavit Mr Yan Lam (Exhibit A), the director of the plaintiff.
The flyer contains information that suggests, at least, the following: that the property was built by Amescorp Pty Ltd, and that the property having been constructed by them, is likely to contain a range of defects or did in fact have those defects. The same flyer was handed out by the defendant on each of the days that the property was open for inspection: see pars 12, 21-23 of Exhibit A in relation to the inspection on 23 July 2022; pars 29-31 of Exhibit A in relation to the inspection on 30 July 2022; and pars 5 and 6 of Exhibit A in relation to the inspection on 3 September 2022.
It is the plaintiff's case that the property does not contain any defects. Furthermore, according to Mr Lam, the dwelling was largely constructed by the plaintiff: a company in the business of acquiring, developing, building on and then selling property. Mr Lam does, however, accept that Amescorp did undertake some building works - largely confined to the demolition and construction of the foundation slab as well as some work as a site manager - during, and as part of, the construction of the dwelling.
In relation to the specific "defects" referred to in the flyer, Mr Lam has identified that, in fact, in relation to the premises, Amescorp did not construct, supply or install any of those items: par 17 of Exhibit A.
There is, at least for the purposes of this present application, no issue with the fact that there is a reference in the flyer to Amescorp; the plaintiff's complaint is directed to the matters relating to the condition of the property.
I was told by counsel for the plaintiff that the plaintiff did not hold further openings for the property during August 2022 in the hope that the issue with the defendant could be resolved. The campaign for the sale of the property, including opening the property for inspection, recommenced last Saturday, 3 September 2022, albeit that, as I have mentioned, the defendant continued to hand out the flyer.
The plaintiff's selling agent has scheduled a further opening for the property tomorrow - hence the urgency of this application.

[4]

The plaintiff's cause of action: injurious falsehood

The plaintiff has commenced proceedings by Summons filed on 19 August 2022. That Summons seeks interim, as well as final, relief. The final relief includes a claim for damages.
The cause of action relied upon by the plaintiff is for injurious falsehood. The cause of action "consists in the publication of false statements, whether oral or in writing, concerning the plaintiff or the plaintiff's property, calculated to induce others not to deal with the plaintiff": Carolyn Sappideen and Prue Vines, Fleming's the Law of Torts (10th ed, 2011, Thomson Reuters) at p 797.
There are four elements of this tort, conventionally expressed in terms deriving from the judgment delivered by Bowen LJ in Ratcliffe v Evans [1982] 2 QB 254 at 527-528 and as restated by the High Court in Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69 at [52] (Gummow J) broadly as follows: (1) that a false statement has been made about the plaintiff's property; (2) that the statement was published to a third party; (3) that there was malice on the part of the defendant; and (4) that the plaintiff has suffered actual loss as a result.
In order for the plaintiff to secure the interlocutory relief that is sought, it is necessary to consider whether there is an arguable case that the defendant has committed this tort. In my view, there is such an arguable case for the following reasons.
It is clear that the evidence of Mr Lam establishes that the flyer contains statements that are, not only inaccurate, but false. Furthermore, it is clear that the flyer was prepared by the defendant and was thereafter "published": it was handed out on each occasion that the property was open for inspection by the defendant. In fact, the defendant does not dispute that he has done so. In Exhibit E (an email sent by the defendant to the Common Law Registrar on 7 September 2022) the defendant relevantly stated: "… I am handing out a pamphlet giving people a checklist of things to look for in advertised Amescorp built properties…". He made a similar statement in Exhibit F, namely that in response to advertising by Amescorp, showing images of the properties at numbers 8 and 10A Kariwara Street Dundas, the defendant stated that he "should be able to hand out pamphlets with a list of items that prospective buyers can check before deciding on purchasing any Amescorp built property": see p 3 of Exhibit F.
In terms of publication, there is no doubt that the defendant prepared the flyer - he has admitted as such - as well as handed the flyer out to those who attended the plaintiff's property when it was open for inspection.
It is essential that the falsehood is published with malice; that is, with some indirect, dishonest or improper motive: Serville v Constance [1954] 1 WLR 487 at 490 (Harman J) or "wilfully and intentionally done without just occasion or excuse": Joyce v Motor Surveys Ltd [1948] Ch 252 (Roxburgh J); Flemings at p 798. The authorities have also been collected in AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd [2010] NSWSC 1395 at [31]-[37] (Brereton J). In my view it is evident from what the defendant has said, which I have referred to above, that he holds grievances with Amescorp and that those grievances are motivating him to act as he is. I am further satisfied that there is an arguable case that the defendant knew the statements were false or he was recklessly indifferent to their truth or falsity: as Fagan J observed in Southern Meats Pty Ltd v Zhi [2021] NSWSC 1120 at [20]: "deliberately or recklessly false statements indicate malice".
I am satisfied, therefore, that there is at least an arguable case that the defendant's conduct satisfies the first three elements of the tort. I also accept that there is a sufficiently arguable case of damage - being a general loss of custom or business: Ratcliffe v Evans [1892] 2 QB 524 at 533 (Lord Esher MR, Bowen and Fry LJJ).
The next issue is whether, if not restrained, it is likely that the defendant will continue to distribute the flyer. I am satisfied that, if not restrained, the defendant will continue to distribute the flyer on the further occasions that the property is open for inspection. His most recent statements (contained in Exhibits E and F) show no disinclination on his part to cease in this conduct, despite the fact that the defendant was aware that legal proceedings had been commenced. I am satisfied that there is a clear risk that him doing so may cause significant damage.
Although the tort of injurious falsehood resembles defamation, the grant of an interlocutory injunction is not subject to the same restriction that applies when an injunction is sought in connection with anticipated defamation: Palmer Bruyn & Parker Pty Ltd v Parsons at [58]. The rationale is said to lie in the fact that the tort of injurious falsehood "protects proprietary and commercial rather than personal interests": Palmer Bruyn & Parker Pty Ltd v Parsons at [58]; Swimsure Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796 at 800-801; Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 694; (1994) 83 LGERA 115.
I am satisfied that the balance of convenience favours granting the relief sought. I accept, as the plaintiff argued, that it should be provided the opportunity to sell the property without the defendant's interference and the risk of a depressed market price. Furthermore, there is no identifiable harm in granting the injunction: this is particularly where, as here, the plaintiff has given the usual undertaking as to damages.
Further, I should for note for completeness the following: I was told by counsel for the plaintiff that the defendant had evaded service and, further, that the nature and urgency of the orders necessitated the matter proceeding before me as an ex parte application. I have proceeded on that basis.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (5 paragraphs)

Parties

Cases Cited (6)