Islamic Co-Ordinating Council Of Victoria Pty Ltd v Australian Halal... [2026] VCC 236 | Case summary

Hall-Gibbs Mercantile Agency Ltd v Dun [1910] HCA 66; (1910) 12 CLR 84

Islamic Co-Ordinating Council Of Victoria Pty Ltd v Australian Halal... [2026] VCC 236 | Case summary | Zoe

[16]

The system requires certification in the home or export market of individual product shipments and also of the abattoirs where the beasts are slaughtered. These local certifying organisations must be recognised or "listed" as approved by the regulators in the importing countries.
According to Mr Edin Dzelalagic, who has been the Chairman of Directors of the plaintiff, Islamic Co‑Ordinating Council of Victoria Pty Ltd (ACN 097 332 726) ("ICCV") has been providing certification services to the Australian meat export industry "since halal has been introduced to Australia [in] 1994". (T41, L21) At that time the only other body involved in such certification was AFIC - the Australian Federal Islamic Council, which, according to Mr Dzelalagic, is and was "not a major player". (T41, L23 - T42, L3) Now there is a multiplicity of organisations providing certification services. According to Mr Dzelalagic, there are 16 for the Indonesian market, 5 for the Malaysian market: "there's about 18 to 20 organisations now that are in the same market". (T42, L6-9) The advantage for the plaintiff's organisation is that it provides certification for all of these Islamic export markets, not merely one or two. (T41, L16-17) It provides certification for the Saudi Arabian market, the Indonesian market, the Malaysian market, and the Singaporean market. (Ibid, L11-15)
ICCV is trustee of the Halal Board of Australia Trust. (CB 1372) Its "shareholders", (which I take to mean beneficiaries under the trust), are a variety of mosques. (T37, L19-20) The trust earns income from the certification process which is distributed to the several mosques. (T38, L28-29) ICCV is one of Australia's largest certifiers of Australian red meat for export, holding about 35 per cent of that certification market. (T48, L18-23)
ICCV and Midfield Meat International Pty Ltd entered into what was described as a "certification agreement" governing the provision to Midfield of ICCV's certification services, dated 23 February 2022. (CB 1399-1406) The agreement included clause 4, headed "Termination", in the following terms:

[61]

A Statement of Claim alleged the incorporation of the corporate parties, plaintiff and first defendant, and those corporations' common involvement in the Halal meat certification market in Victoria. The second defendant, Mr Muhammad Esfandiar, was said to be a shareholder in AHAA and one of its directors. It was alleged that he was "In authority at the First Defendant and able to give instructions to the Third Defendant in the conduct of his role as national halal manager." The third defendant was said to hold the office of National Halal Manager of AHAA and to be the son of Mr Muhammad Esfandiar and to be authorised to make commercial communications "with Third parties as a representative and/or agent and/or employee of [AHAA]".
It was alleged that "During the period August to September 2023", Mr Khalil Esfandiar made statements to Midfield Meat that ICCV "was involved in the funding of Islamic extremist groups [and] was being investigated for possible criminal offences arising out of the funding of Islamic extremist groups". It was said that "By reason of [Mr Khalil Esfandiar's] function in [AHAA] the Statements were also made" on behalf of AHAA for Mr Muhammad Esfandiar's benefit and by him. Alternatively it was said that since the statements were made "within the scope of [Mr Khalil Esfandiar's] authority as employee, [AHAA was] vicariously liable for" the statements. It was said the statements were "false" and were knowingly maliciously made in that "they were motivated by an intention to secure the red meat halal certification services business that [ICCV] had provided to Midfield Meats for over 15 years."
Next there was an allegation that Mr Muhammad Esfandiar had repeated the statements to Mr Hassan, ICCV's company secretary, variously on 10 and 11 September 2023, by having admitted to him having made the statements inter alia to Midfield Meat "specifically in order to secure their business". It was said that by reason of Mr Muhammad Esfandiar's role in AHAA, his statements could be regarded as having been made on its behalf for Mr Muhammad Esfandiar's benefit and having been made by the first defendant.
Those statements were said to have "caused Midfield Meats to sever its commercial relationship with" ICCV and thereby secured that business. As a result, it was said that ICCV had suffered loss and damage. The revenue for the six months prior to October [scil 2023] was $207,268, averaging $34,544 [scil per month]. The mean revenue was over $40,000 [scil per month]. No fees were earned by the plaintiff in the months of October 2023 and November 2023. (CB 18, paragraph 14) There were further allegations as to similar statements allegedly made by, or on behalf of AHAA to another ICCV customer, MC Herd Pty Ltd. These matters were not pursued by way of evidence at trial, and so may be put to one side.
The Prayer for Relief sought interim or interlocutory injunctive relief, restraining the further making of the alleged statements, together with damages, and damages pursuant to s236 of the Australian Consumer Law, together with interest and costs.

[73]

Dr Stern, who represented the defendant, contended that the injurious or malicious falsehood alleged here, even if made out as a matter of fact, would be actionable only under the tort of defamation. If that be true, since s9 of the Defamation Act 2005 precludes defamation claims on behalf of "for profit" corporations, were ICCV's allegations to be made out on the facts it would be without remedy under the common law law of torts.
Dr Stern referred to and relied upon the High Court of Australia's decisions in Lithgow City Council v Jackson (2011) 244 CLR 352 [25]-[26] per French CJ, Heydon and Bell JJ; Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1; Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; (2009) 238 CLR 460 [10]-[11] per French CJ, Gummow, Kiefel and Bell JJ; Hall-Gibbs Mercantile Agency Ltd v Dun [1910] HCA 66; (1910) 12 CLR 84, 91, 93 per Griffith CJ and Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388. He contended, based on the authority of the Radio 2UE case, that injuries to reputation are protected by the law of defamation alone, and malicious or injurious falsehood is available only where the damage is to the person's business or goods.
In the Palmer Bruyn & Parker case, the High Court considered an appeal by the plaintiff, a land surveying company, against a decision of the Supreme Court of New South Wales (Court of Appeal) dismissing its claim for damages for injurious falsehood. The plaintiff company alleged that the defendant had maliciously concocted a letter purporting to come from the plaintiff which, according to the headnote in the Commonwealth Law Reports, "contained both fanciful offers of inducements and threats, and was calculated to ridicule the surveyor as the purported sender." The surveying company alleged that it had lost a consultancy to McDonald's Australia Ltd relative to a proposed fast-food restaurant as well as all future consultancy work. The High Court held by a majority that the termination of the retainer by McDonald's was not the natural and probable consequence of any false statements by the defendant. The causal connection required for the tort of injurious falsehood was therefore not made out; Callinan J dissented. The paragraph relied on by Dr Stern in the judgment of Gummow J is as follows:

[83]

Here, whether what the plaintiff complains of might, apart from s9 of the Defamation Act, have been the subject of defamation proceedings, it must also be regarded as a proper basis for a claim in injurious or malicious falsehood. The High Court disposed of the Palmer Bruyn & Parker case on the basis of causation, not on the basis that the communication complained of was not apt to found a claim for injurious falsehood. Gummow J expressly accepted that it was ([51] above). Absent a prohibition on corporate proceedings for defamation, or if the land surveyor in question had been a sole practitioner, a natural person, it would surely have been defamatory to attribute to the surveyor the letter in question. In so far as it made preposterous or unreasonable proposals, it reflected upon the surveyor's competence. In so far as it proposed bribes or other inducements, it reflected upon the surveyor's integrity. Here, the matter complained of touches what Kirby J referred to as "interests of an economic character". To look at it another way, ICCV's business of providing Halal certification services was an item of its personal property. To claim, as it is alleged the defendants did, that this business or undertaking was devoted to supporting Islamic extremism would, if false, constitute injurious falsehood, whether or not, absent s9 of the Defamation Act, ICCV could have brought a claim in defamation.
The crucial issue at trial was whether the alleged assertion of a connection between ICCV and Islamic extremism was in truth made by or on behalf of the defendants or any of them. The pivotal witness was Mr Mckenna. It was to him that the assertion was alleged to have been made by the third defendant, Khalil Esfandiar. As previously noted, I gave the plaintiff's counsel, Mr Catlin, leave pursuant to s38 of the Evidence Act 2008 to cross-examine Mr Mckenna inter alia as to this matter. It will be recalled that Mr Dzelalagic said that Mr Mckenna identified Mr Esfandiar as the source of the allegation in a telephone call with Mr Mckenna. When Mr Catlin put that scenario to Mr Mckenna, the latter said "No, I never replied "Khalil" because Khalil never told me that ..." (T182, L2−5) Mr Mckenna's email to Mr Dzelalagic of 11 August 2023 by way of confirmation of their telephone conversation stated that Mr Mckenna was "told" (inter alia) that "there is an investigation that ICCV may have funded extremist groups recently". Mr Catlin pursued Mr Mckenna at length as to the source of the concerns about an alleged ICCV connection with Islamic extremism and an investigation into that matter, but Mr Mckenna was unable or unwilling to "name names".
Has it been established upon the evidence that the defendants, or any of them, or anyone on their behalf, made the allegations relative to Islamic extremism to Mr Mckenna of Midfield Meat? Mr Mckenna denies it. The only attribution to Mr Khalil Esfandiar is an alleged statement by telephone by Mr Mckenna to Mr Dzelalagic which Mr Mckenna now denies. The alleged statement by telephone is, according to the common law of evidence, hearsay. None of the traditional exceptions to the hearsay rule would render it admissible. The evidence of the alleged statement by Mr Mckenna to Mr Dzelalagic over the phone was admitted pursuant to s64(3) of the Evidence Act 2008, which provides inter alia:

[105]

Here, there has been no explanation given as to the failure to call as witnesses either of the natural person defendants. Mr Khalil Esfandiar could have given direct evidence as to whether or not he had imparted an allegation that ICCV was involved in funding Islamic terrorism or that it was subject to an investigation as to such a matter.
The effect of the Court's analysis in Jones v Dunkel is not that the failure to call either of the natural person defendants as witnesses, or Mr Khalil Esfandiar in particular, could provide a positive element of proof. Rather, it would leave me entitled more confidently to draw the inferences from the evidence advocated by the plaintiff.
Mr Catlin contended that Mr Mckenna's denial that Mr Khalil Esfandiar made the alleged statements ought to be rejected. The substance of the allegation was confirmed by the email, a written document emanating from Mr Mckenna, and the evidence of Mr Dzelalagic. The crucial link to be proved was that Mr Khalil Esfandiar was the source.
Mr Catlin noted the documentary evidence established without contradiction that Mr Esfandiar, on behalf of AHAA, was attempting to obtain from Midfield the certification business formerly done on Midfield's behalf by ICCV. He noted that ICCV had a long-established reputation, and its service and pricing had not been subject to criticism. Hence, something distinct and significant would have been required to induce Midfield to change its allegiance. This was doubly so in light of the fact that there was an agreement in force between Midfield and ICCV giving ICCV the entitlement to continue providing certification services.
The survey of the evidence already undertaken shows that Mr Mckenna was at pains to attribute his and Midfield's disenchantment with ICCV to the listing difficulties in Saudi Arabia and a failure on ICCV's part to respond adequately, to take his phone calls or those of his "team". It was, according to Mr Mckenna, a situation where "millions of dollars" of Midfield beef was at peril of being condemned. (T197, L1-4) Yet these matters were not mentioned in the email to Mr Dzelalagic or in any other written document. Mr Mckenna explained this omission by presenting himself as a plain man who dealt with important matters by word of mouth, either in person or over the telephone, and did not waste time on lengthy emails. (T161, L7-11; T191, L16-17) A consideration of the email traffic between Mr Mckenna and Mr Esfandiar would not appear to bear this out. Mr Mckenna is seen to be as ready as the average senior businessman to communicate by email. He was also taken to numerous phone texts, including those between himself and Mr Esfandiar. There is no basis for the contention that Mr Mckenna had an aversion to putting things in writing. The fact that there are no written complaints about a failure to respond to telephone calls during a crisis caused by the Saudi delisting leads me to conclude that this was a recent invention by Mr Mckenna.
For the reasons explained, therefore, I consider it has been established relatively exiguously, but adequately for the present purposes, that the allegations as to a connection between ICCV and Islamic extremism or an investigation into such matters (the cause of the breach between ICCV and Midfield) were imparted to Mr Mckenna by Mr Khalil Esfandiar. The email shows that this was the dominant factor in Midfield's decision to sack ICCV.
The next requirement to establish liability for injurious falsehood is that the assertion or statement be proven to be "false". This would seem to be perhaps the most fundamental point requiring proof. Admittedly the proof of a negative might be regarded as difficult or impossible. In some instances clear proof may be given. If it is alleged that an individual did something in Melbourne on 1 June, proof that that individual was in Sydney for the whole 24 hours of 1 June would appear to prove the negative. To prove that ICCV was not involved in the support of Islamic extremism would be more complex. As to whether there was an investigation on that subject focused on ICCV, one might, for instance, obtain evidence from the Australian Federal Police, though a negative response as to investigations from the AFP would not exclude the possibility of an investigation by some other police or investigative organisation.
Perhaps in a context such as the present it would be sufficient to obtain evidence from one or more of ICCV's officers asserting a lack of involvement by that company with Islamic extremism. As it is, not even that evidence seems to have been adduced. When Mr Dzelalagic was speaking to Mr Mckenna in August 2023, he said that he denied any involvement of ICCV with Islamic extremism. He gave evidence of a statement obtained from an Australian Federal Police senior officer identified only as "Gerry" denying the existence of an investigation of ICCV as to involvement with Islamic extremism. This was double or triple hearsay, though it went into evidence without objection.
Aside from formal matters such as incorporation, the defendants made no admissions. They certainly did not admit that an allegation of ICCV's involvement with Islamic extremism was false; though, in calling no evidence and undertaking limited cross-examination by their counsel, the defendants avoided making any positive assertions that ICCV was involved with Islamic extremism. It would be fair to say that the trial proceeded upon the unstated assumption that the assertion of ICCV's involvement with Islamic extremism, if in fact made, was false.
In these unfortunate circumstances, can it be said that falsehood has been made out? With some hesitation, I am prepared to act upon the unstated assumption of falsehood which underlay the conduct of the trial and the implicit adoption by Mr Dzelalagic of the denial of such involvement which he reported having made to Mr Mckenna in their August 2023 telephone conversation.
The final element required to establish the cause of action for malicious or injurious falsehood, proof of damage aside, is the issue of malice. ICCV's case is that whatever Mr Esfandiar said was said for the purpose of winning Midfield's business. Competition is generally favoured both by the common law and by statute. Competition is therefore assumed to be a good thing. There is a presumption against the enforceability of contractual provisions in restraint of trade. National legislation in the form of the Competition and Consumer Act 2010 (Cth) establishes a competition code for the nation. Competition simpliciter therefore is regarded by the law as a virtue and not a vice.
Mr Catlin contended that fair competition could not be regarded as malicious. Here, however, he suggested that retailing falsehood by the defendants (if this be proven) goes way beyond legitimate competition and is ipso facto malicious by its very nature. I accept that submission.
I will turn later to the issue of whether ICCV has proven that it has suffered loss and damage as a result of the matters described.

[112]

The learned author notes that s19 of the Australian Consumer Law precludes the bringing of proceedings reliant on s18 against what might be described as media organisations. The same considerations which render s18 available as a cause of action in defamation where the defendant is a non-media organisations, as in the present instance, would seem to apply where the corresponding common law remedy is by way of malicious or injurious falsehood. For the reasons given by Sir Harry Gibbs in the passage quoted, there is no need to establish malice. The mere making of the misleading or deceptive conduct is sufficient to ground liability.
Dr Stern contended, however, that the s18 remedy was rendered unavailable to ICCV because it could be brought only with respect to conduct engaged in "in trade or commerce". Dr Stern took me first to the well-known statement in the joint judgment in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594, 602-3 (Mason CJ, Deane, Dawson and Gaudron JJ) that the words "in trade or commerce" could be construed as encompassing conduct in the course of the myriad of activities which are not of their nature of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business. He then cited a number of other authorities.
I challenged Dr Stern to cite and rely upon his "best case" in support of the contention that the statements here were not in trade or commerce. He referred to the decision of Weinberg J sitting as a Judge of the Federal Court of Australia in Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) [2002] FCA 860 where his Honour held that certain contentious statements made by the Society and its president, Dr Hugh Wirth, were not in trade or commerce [194]. Dr Wirth and the Society, in a series of presentations, alleged that electronic dog collars manufactured by the plaintiff Orion were cruel. These presentations included a radio broadcast in 1995, statements made by officers of the Society to a named individual in 1998, statements on the Society's website, and an article in the Herald Sun. His Honour accepted, as he was required to do, the authority of the High Court in the Concrete Constructions case. He said:

[117]

The falsehood or misleading or deceptive conduct here, upon the evidence, was imparted by Mr Khalil Esfandiar. The statement was made in the context of negotiations and presentations made on his part for AHAA with a view to its obtaining the Halal certification business of Midfield Meat formerly provided by the plaintiff ICCV. Whilst not an officer of ICAA he is a shareholder and made an affidavit of documents on its behalf (CB 265) In those circumstances, it is appropriate to regard Mr Khalil Esfandiar as having made the statements on behalf of and for the benefit of AHAA, with the result that AHAA bears legal responsibility and liability for causes of action which have accrued to ICCV as a result. In contrast to the law in matters of alleged breach of contract where a person engages in tortious contract, whether tortious by reason of the common law (the tort of injurious falsehood) or statute (the statutory quasi tort cause of action for misleading or deceptive conduct), the fact that his or her employer or principal may be vicariously liable, as is the case here with AHAA, does not relieve the agent or employee from personal liability: Houghton v Arms [2006] HCA 59; (2006) 225 CLR 553. Accordingly, there ought to be judgment against the first defendant and the third defendant.
The situation of the second defendant, Mr Muhammad Esfandiar, is more problematic so far as the plaintiff's claim is concerned. The evidence adduced at trial did not in any way implicate him as having engaged in misleading or deceptive conduct or having imparted a falsehood. As previously noted, the Statement of Claim alleges repetitions of the falsehood attributed to his son to Mr Esfandiar senior in overseas conversations. Nothing was said as to these matters in the course of the trial.
The alleged repetitions were said to have been made by Mr Muhammad Esfandiar to Fouad Hassan, who made an affidavit dated 7 December 2023 apparently in support of the abortive injunction application. This deponent did not give evidence at trial. Mr Catlin made no reference to Fouad Hassan's affidavit in the course of the trial, aside from responding to Dr Stern's wish to be entitled to refer to that affidavit in his closing address by observing that it was in the Court Book (and presumably therefore proper for Dr Stern to refer to). Prior to the abortive trial date last year, the defendants had given notice of intention to cross-examine Mr Fouad Hassan. (CB 301) Had Mr Catlin sought to rely on the affidavit therefore, I have no doubt that Dr Stern would have objected on the footing that the deponent had not been offered for cross-examination.
In these circumstances, therefore, I believe it would be wrong to treat the contents of Mr Hassan's affidavit as having been before the Court for the purposes of establishing a liability for the matters for which judgment ought be given against the first and third defendants. In the absence of the Hassan affidavit, there would appear to be no basis for attaching any liability for these matters to Mr Muhammad Esfandiar.

Islamic Co-Ordinating Council Of Victoria Pty Ltd v Australian Halal Authority and Advisers Pty Ltd & Ors [2026] VCC 236

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Judgment (121 paragraphs)

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Cases Cited (12)