Judgment No 12 - were the damages awarded excessive?
375 The appellants allege that the awards of damages were excessive as a consequence of a number of specific errors that they claim were made by the primary judge. There is no claim that, independently of specific error, the assessments of damages were manifestly excessive. Many of the specific errors going to the assessment of damages that are alleged by the appellants have been considered in addressing other grounds. The claimed errors are extensive, and are set out in 23 sub-grounds of Ground 10 of the amended notice of appeal which I will consider in turn. In considering the sub-grounds, I will group some of them together.
(a) The primary judge erred in finding, at [244], [245], [316], [331], [344, [353], that the 'Kazal website' and the First and Second Matters remained online up until the date of the Primary Judgment.
376 I have addressed the substance of this ground at [301] to [310]. While the matter is not clear-cut, on balance I am persuaded that the judge's findings at J12 [244], [315], and [316] contain an error to the extent that it appears that his Honour considered that the Kazal website remained online beyond mid-2017 and up until the time of publication of Judgment No 12. I do not think that by his Honour's findings he intended to treat publication of the archived website on the Wayback Machine as a publication by the appellants for the purpose of assessing damages. There was no evidence that the archived Kazal website on the Wayback Machine would be disclosed by an ordinary Google search. The judge's error may also have infected his understanding of where the YouTube videos that were played to the Court during the trial were posted, which is a matter that I will address under Ground 10(q).
(b) The primary judge erred in finding, at [100], that "short Link 1" had received 1016 "clicks" in the period commencing in 2016 and ending on 12 July 2018;
(c) The primary judge erred in finding, at [100], [311], [206] and [294], that the Respondents' use of bitlinks had the effect of prioritising the position or ranking of the Respondents' website in search engine results;
377 Counsel for the appellants addressed sub-grounds 10(b) and (c) together.
378 At J12 [96] to [103], the primary judge addressed the evidence concerning the use of bitlinks on the appellants' Twitter accounts, and the way in which they disguised hyperlinks to the Kazal website. The judge at J12 [98] referred to evidence in the expert report of Dr Schatz that was tendered by Thunder Studios and Mr David and stated that the reasons why short links are used on Twitter accounts can include an intention to drive users to the website and to increase the ranking of that website in search engines or provide a reference to source material related to an assertion referred to in the tweet. The appellants impugned the primary judge's findings at J12 [100], which were as follows -
100 Dr Schatz found that Bitly's statistics showed that the bitlink to the website that he labelled "Short Link 1" had received 1016 "clicks" as at 12 July 2018 which, of course, only covered a period commencing in 2016. Dr Schatz said that he did not have access to Google or Twitter Analytics or statistics to confirm his opinion, based on his expertise and experience, it would be reasonable to assume that the inclusion of that bitlink in Charif's tweets would have the effect of prioritising the position or ranking of the Kazal website in search engine results at the time of their publication. In my opinion, based on the evidence, Dr Schatz's view about this is correct.
379 The reference to "Short link 1" in the above passage was to a bitlink that Dr Schatz identified in his report which had appeared on Charif Kazal's Twitter account and for which the target URL was the Kazal website. Dr Schatz referred to data that he retrieved from a Bitly statistics page that showed that "Short link 1" had been created on 13 September 2013, and to available statistics for the link for the period commencing in 2016 that indicated that by 12 July 2018 "Short Link 1" had received 1,016 clicks, and that this was a measure of the amount of traffic that had been driven to the Kazal website through the bitlink. As the primary judge correctly stated at J12 [100], Dr Schatz was not able to provide a concluded opinion regarding whether the inclusion of "Short Link 1" in the numerous Tweets on the Charif Kazal Twitter feed would have prioritised the position or ranking of the Kazal website in search engine results, but on the basis of his knowledge, and in the absence of evidence to the contrary, it was Dr Schatz's opinion in [83] of his report that it was reasonable to assume that it had that effect -
83. In absence of evidence to the contrary, based on my knowledge it is my opinion that it is reasonable to assume that the inclusion in the numerous Tweets on the CharifKazal twitter feed had the effect of prioritizing the position or ranking of the Kazal Website in search engine results at their time of publishing.
380 In Ground 10(c), the appellants also referred to J12 [206], [294], and [311] as containing findings that the use of bitlinks had the effect of prioritising the position or ranking of the Kazal website in search engine results. Indeed, at J12 [311] the judge found that the appellants used their Twitter accounts over several years with the purpose of enhancing search engine optimisation of results for the Kazal website for persons seeking information about Mr David, and that together with other evidence supported the inference that the appellants intended to injure Mr David and Thunder Studios.
381 On appeal, the appellants submitted in writing in support of Grounds 10(b) and (c) that the primary judge impermissibly expanded the extent of publication by relying on the Tweets, being the third and fourth matters, as evidence of publication of the first and second matters, when those matters were only pleaded in respect of the misleading and deceptive conduct claim. Counsel for the appellants relied on J12 [100] and his Honour's finding that it would be reasonable to assume that the use of "Short Link 1" had the effect of prioritising the ranking of the Kazal website in search engine results, as disclosing this claimed error. In relation to this finding, counsel for the appellant submitted in writing that -
The evidence of Dr Schatz was far more equivocal. He opined 'it may be possible to determine the extent to which Short Link 1 effectively drove content to the Kazal Website based on analysis of the records in Twitter Analytics and Google Analytics. I do not currently have access to these sources of evidence'. As to the effect of Short Link 1 on prioritising the position or ranking of the Kazal website in search engine results, he thought it 'may have' done so, 'in the absence of evidence to the contrary', based on his experience, however he was 'unable to provide a concluded opinion regarding whether Short Link 1's inclusion in the numerous Tweets on the Charif Kazal twitter feed would have prioritized the position or ranking of the Kazal Website in search engine results'.
(Footnotes omitted.)
382 I do not accept the appellant's submissions in support of grounds 10(b) and (c). Dealing with the pleading point first, the fact that the appellants' Twitter posts were alleged to give rise to separate causes of action, being the third and fourth matters, did not immunise their relevance to other issues in the proceeding. The evidence of the Twitter posts and their use of bitlinks provided evidence of publication of the first and second matters, and evidence of the appellants' malice for the purposes of the injurious falsehood claims, and on the question of damages to the extent provided for by s 36 of the Defamation Act, to which the primary judge referred at J12 [350]. In relation to the injurious falsehood claims, the appellants' use of their Twitter accounts was pleaded in paragraphs (f) and (o) of the particulars under [21] of the amended statement of claim as supporting the allegation of malice, and those particulars were also relied on in support of the claim for aggravated damages.
383 Next, the account of the evidence of Dr Schatz in the appellants' submissions is incomplete. While it is correct that Dr Schatz qualified his opinions in the ways submitted on behalf of the appellants, in the end he did express the opinion at [83] of his report that it was reasonable to assume that the inclusion of Short Link 1 in the numerous Tweets had the effect of prioritising the position or ranking of the Kazal Website in search engine results. There was no error by the primary judge in acting on this evidence in circumstances where it was unchallenged by any cross-examination, or any evidence called on behalf of the appellants. Further, while the technical aspects of the workings of bitlinks and search engines was the subject of expert evidence, the question of the purpose and effect of the appellants' use of their Twitter feeds containing the links to the Kazal website was for the judge based upon the totality of the evidence. The evidence before the judge, and the absence of any contradictory evidence called by the appellants, compelled the findings that his Honour made.
(d) The primary judge erred in rejecting, at [191], Charif Kazal's verified answers to interrogatories as to the extent of publication of the Second Matter, in circumstances where those answers were tendered by the Respondents (at T445.1) and not challenged;
384 At [273] above, I rejected this ground as misconceived when addressing Ground 5(a)(iii) in support of the claim of apprehended bias.
(e) The primary judge erred, at [150], in accepting the evidence of David that his anxiety increased when he read of links between the Kazals and Hezbollah in an article published by Linton Besser in the [sic] Sydney Morning Herald on 16 March 2013 entitled "Two bags of Money and a lot of trouble in Beirut";
385 Although the counsel for appellants submitted at [10.1] of their written submissions that they relied on "each of the specific errors identified in paragraph 10 of the Notice of Appeal, some of which have already been addressed in these submissions", several of the claimed errors were unsupported by any written or oral submissions. Ground 10(e) is one such instance. The judge's finding at J12 [150] was supported by evidence that Mr David gave in re-examination, and no error has been shown.
(f) The primary judge erred, at [157], in accepting the evidence of David that the First and Second Matters caused him to have real concern for his life;
386 I have addressed the subject-matter of this ground at [281] above in considering Ground 5(a)(vii) in support of the appellants' claim of apprehended bias. This ground is without merit. Mr David gave evidence that he interpreted the blood-red hand depicted in the Intro article (see [61] above) as suggesting a risk to life, and he was not challenged on this evidence in cross-examination.
(g) The primary judge erred in finding, at [318], that Thunder and David had suffered actual damage in circumstances where they had not pleaded or particularised and led no evidence of any business that they were conducting in Australia or of a general decline of business in Australia (or the United States);
387 I have addressed the subject-matter of this ground at [371] to [374] above. I uphold the appellants' claim that the primary judge erred in finding that Thunder Studios and Mr David had established actual damage for the purposes of the tort of injurious falsehood. However, the appellants have not demonstrated that the judge was in error in awarding damages to Thunder Studios under ss 236 and 237 of the ACL for reputational damage, even though the evidence supporting the assessments was exiguous.
(h) The primary judge erred in finding, at [176], that the Westside Group's concern that David was "some type of fraud" was not induced by its knowledge of allegations of fraud made against the Respondents in proceedings brought by Focus on Cars;
(i) The primary judge erred in finding, at [178] and [327], that businesspeople who knew of the findings of Jones J in Emergent, would not be deterred from doing business with David;
(j) As a consequence of the errors in (h) and (i) above, the primary judge erred in finding at [317] and [319], that the Westside Group ceased its negotiation with Thunder as a result of the First and Second Matters and that Thunder and David had suffered actual loss and damage as a result;
388 Each of these grounds has diminished significance as a result of the fact that, for the reasons I have given, the primary judge's findings did not support a conclusion that Thunder Studios or Mr David had suffered actual damage for the purposes of the tort of injurious falsehood. That is because the four matters that were relied on by Thunder Studios and Mr David as giving rise to actual damage occurred in the United States, and the judge was not satisfied that such damage was actionable.
389 For completeness, I will consider Grounds 10(h) and (i). The appellants' challenge to the judge's finding at J12 [176] that was the subject of Ground 10(h) was not supported by any written or oral argument. The finding at J12 [176] related to the cessation of negotiations by Thunder Studios to let some space to the Westside Group to which I referred at [362] above. The negotiations did not proceed following Mr David being told that preliminary due diligence on the internet showed that he was "some type of fraud". At J12 [177], the judge considered and rejected a submission by counsel for the appellants that the likely reason for the cessation of negotiations was actually a concern that Westside had about litigation in which Thunder Studios was involved that was referred to at J12 [168] as "the Focus proceedings". On appeal, counsel for the appellants did not engage with the judge's findings at J12 [177], still less develop any submission that there was any error.
390 As to Ground 10(i), the judge's findings at J12 [178] included the following -
It is doubtful that businesspeople would consider the facts or Jones J's findings (or a fair report about them) about Mr David as suggesting that they should not do business as a tenant with Mr David or Thunder. The conduct as Jones J found was suggestive of Mr David's frustration with having to continue to fund the joint venture with substantial funds, while the Kazal brothers were dishonestly repudiating their obligations to provide any significant funds.
391 It is to be noted that the judge's findings were tied to the preparedness of businesspeople with knowledge of the findings of Jones J in Re Emergent to do business with Mr David or Thunder Studios as a tenant. Counsel for the appellants did not develop any submissions that the judge was wrong in making these findings.
(k) The primary judge erred in accepting the evidence of Mr Panos that a proposed IPO in which he and David were involved had failed as a result of the publication of the First and Second Matters and in finding, at [318] and [319], that Thunder and David had suffered actual loss and damage as a result;
(l) The primary judge erred in finding, at [318] and [319], that Thunder and David had suffered actual loss as a result of the incident with Steven Rockefeller;
392 Grounds 10(k) and (l) also have diminished significance as a result of my conclusion that the primary judge's findings did not support a conclusion that Thunder Studios or Mr David had suffered actual damage for the purposes of the tort of injurious falsehood. Otherwise, as with Grounds 10(h) and (i), counsel for the appellants did not develop any submissions in support of them.
(m) The primary judge erred in permitting the Respondents to rely upon and lead evidence concerning the Los Angeles conduct in circumstances where such conduct had not been pleaded or particularised and was first introduced by the Respondents in opening;
(n) Further to (m) above, the primary judge erred, at [343], [347] and [348], in awarding aggravated damages to David and Thunder on the basis of the Los Angeles conduct, in circumstances where that conduct was determined by the United States Court of Appeals for the Ninth Circuit to be lawful;
(o) The primary judge erred in finding, at [216], [227], [232] and [355], that the Los Angeles conduct, including the email from Adam Kazal to David dated 28 October 2016, amounted to a threat and caused David to fear for his life and that of his family, in circumstances where, in the US proceedings between the parties the Court of Appeals for the Ninth Circuit had held that such conduct could not on either an objective or subjective test amount to a true threat;
393 In opening the case at trial, senior counsel for Thunder Studios and Mr David referred to evidence that he proposed to lead relating to the conduct that occurred in Los Angeles in 2016 where Adam Kazal had organised protestors outside the family home of Mr and Mrs David, and outside the premises of Thunder Studios, together with a van roaming the streets carrying signage disparaging of Mr David and directing attention to the Kazal website. This activity coincided with similar activity in Sydney at that time, and it was during this period that Adam Kazal sent the 28 October 2016 email that was set out at J12 [223], which I extracted at [285] above, and other emails to employees of Thunder Studios. Senior counsel for the appellants objected to evidence of this conduct being led on the grounds that it had not been pleaded, and that there was otherwise no notice of it in the affidavits that had been filed and which served the purpose of outlines of evidence. In response, senior counsel for Thunder Studios and Mr David submitted to the trial judge that the allegations were within the particulars of aggravated damages under [50] of the amended statement of claim, that the matters were referred to in the chronology that had been filed, and that documents that were included in the court book gave the appellants notice that the conduct in Los Angeles would be relied on. The primary judge obviously thought there was merit in some of the submissions of senior counsel for the appellants, but was concerned to know what prejudice they would suffer in circumstances where the subject matter of the evidence had already been the subject of the proceedings in California which at that point had been the subject of a trial verdict in favour of Thunder Studios and Mr David, and which would later result in the successful appeal: Thunder Studios Inc v Kazal 13 F.4th (9th Cir, 2021). The judge declined to rule on the objection at that point in time, not wishing to talk in generalities. The judge stated that counsel for the appellants could object to the evidence, and that his Honour would rule upon the objections when they arose.
394 Towards the commencement of the second day of the hearing, senior counsel for the appellants again made a submission that Thunder Studios and Mr David had sought to introduce material that had not been properly pleaded, accepting that there might be good answers to the objections, but raising the prospect that time would be needed to consider the materials. Counsel for the appellants also raised with the primary judge the question whether his Honour would reserve the appellants' ability to call further evidence directed to the legal consequences in the United States, whether there would be double-recovery, and sought time to investigate these matters. Counsel for the appellants formally applied for an adjournment of the trial to deal with the material to which the judge did not accede. His Honour did not accept that counsel would be prejudiced in cross-examining Mr or Mrs David, and stated that any legal question concerning double-recovery could be the subject of submissions.
395 No submissions were developed on appeal concerning the admission of evidence of the Los Angeles conduct, and no ruling by the primary judge on this issue was identified still less challenged, and the judge's refusal of the appellants' application for an adjournment was not challenged. Instead, the submissions of counsel for the appellants focussed on the legal consequences of the dismissal of the stalking claim by the United States Court of Appeals for the Ninth Circuit (US Court of Appeals) in Thunder Studios Inc v Kazal on the ground that for the purposes of the First Amendment to the United States Constitution, the conduct of Adam Kazal did not constitute a "true threat". Counsel for the appellants submitted that the Los Angeles conduct was ultimately found to have been lawful because it was constitutionally-protected activity, and that the email from Adam Kazal dated 28 October 2016 did not amount to a "true threat". It was submitted that the primary judge erred at J12 [343], [347] and [348], in awarding aggravated damages to Mr David and Thunder Studios on the basis of the Los Angeles conduct, and that by purporting to confine the award to conduct that "originated in Australia" (at J12 [343]), the primary judge drew a distinction that was not available on the evidence or at law.
396 Counsel for the appellants also sought to rely on the decision of the US Court of Appeals as giving rise to an issue estoppel. It was submitted that two relevant issues had been decided by the United States Court of Appeals for the Ninth Circuit (US Court of Appeals), namely: (1) whether a reasonable person could conclude that Adam Kazal's conduct would be interpreted by Mr David as a serious expression of intent to harm or assault; and (2) whether Adam Kazal subjectively intended to threaten Mr David. It was submitted that both issues were determinative in the primary judge's decision to award aggravated damages against Adam Kazal. As to the first, the appellants relied on the primary judge's finding at J12 [355] that Adam Kazal's conduct was "significantly more threatening and malicious (as communicated to and perceived by Mr David)" than Charif Kazal's extraordinary behaviour. As to the second issue, counsel for the appellants relied on the primary judge's finding at J12 [350] that the intention of Charif and Adam Kazal to harm Mr David "as much as they could" was relevant to the award of damages. It was submitted that the decision of the US Court of Appeals was a final decision in a proceeding between the same parties, and that the primary judge erred in reopening matters that had already been raised and decided.
397 As I mentioned earlier at [288] above, the appellants did not submit to the primary judge that the decision of the US Court of Appeals gave rise to an issue estoppel. No leave was sought from this Court to raise issue estoppel as a fresh argument. No features of the case that might attract leave to raise a new point on the ground that it was "expedient in the interests of justice" were identified, or argued by counsel for the appellants: see, O'Brien v Komesaroff [1982] HCA 33; 150 CLR 310 at 319 (Mason J), cited in VUAX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158; 238 FCR 588 at [46] (Kiefel, Weinberg and Stone JJ). In the circumstances the Court should decline to consider this new argument.
398 In any event, no issue estoppel is made out. An issue estoppel operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in an earlier proceeding: Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; 256 CLR 507 at [22] (French CJ, Bell, Gageler and Keane JJ), citing Blair v Curran [1939] HCA 23; 62 CLR 464 at 510 (Starke J), 531-533 (Dixon J); Jackson v Goldsmith [1950] HCA 22; 81 CLR 446 at 466-467 (Fullagar J). It is important to emphasise that insofar as the doctrine applies to facts, it is confined to ultimate facts, and does not extend to mere evidentiary facts. In Blair v Curran at 532. Dixon J stated in an often-cited passage -
Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v. Inhabitants of the Township of Hartington Middle Quarter (1), the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.
(1) (1855) 4 E. & B. 780, at p. 794 [119 E.R. 288, at p. 293].
399 The doctrine of issue estoppel extends to a decision of any tribunal which has jurisdiction finally to decide a question arising between the parties: Administration of the Territory of Papua New Guinea v Daera Guba [1973] HCA 59; 130 CLR 353 at 453 (Gibbs J), cited by the Court in Kuligowski v Metrobus [2004] HCA 34; 220 CLR 363 at [22]. It is now accepted that the doctrine extends to decisions of foreign courts: Clayton v Bant [2020] HCA 44; 272 CLR 1 at [52]-[54] (Gordon J), [72] (Edelman J, who noted that it was common ground that a cause of action estoppel could arise out of a foreign judgment); Armacel Pty Ltd v Smurfit Stone Container Corp [2008] FCA 592; 248 ALR 573 at [56]-[78] (Jacobson J), citing DSV Silo-und Verwaltungsgesellschaft mbH v Owners of The Sennar (The Sennar) (No 2) [1985] 1 WLR 490; Tyne (as trustee of Argot Trust) v UBS AG (No 3) [2016] FCA 5; 236 FCR 1 at [397] (Greenwood J). However, caution is required in evaluating whether it has been proven that a decision of a foreign court meets the other requirements so as to give rise to a preclusion, such as the requirement that an ultimate issue of fact or law was resolved finally on the merits by a foreign court of competent jurisdiction. Any material may be looked at which will show what issues were raised and decided, and reasons given for the judgment pronounced are likely to be particularly important for this purpose: Jackson v Goldsmith at 467; see also, Evidence Act, ss 174 and 175.
400 The question determined by the US Court of Appeals was whether Tony Kazal and Adam Kazal had committed the tort of stalking. The majority opinion described the statutory foundation for the tort, and framed the issue at [4]-[5] -
[4] Under California law, a defendant commits the tort of stalking by ''engag[ing] in a pattern of conduct the intent of which was to follow, alarm, place under surveillance, or harass the plaintiff.'' Cal. Civ. Code s 1708.7(a)(1). The pattern of conduct must lead the plaintiff either to ''reasonably fear[ ]'' for his own safety or that of an immediate family member, or to ''suffer substantial emotional distress'' when a reasonable person would also suffer substantial emotional distress. Id. s 1708.7(a)(2)(A), (B); see also id. s 1708.7(a)(3) (articulating additional elements that must be satisfied). The statute proscribes only conduct occurring in California. See Diamond Multimedia Sys., Inc. v. Superior Ct., 19 Cal.4th 1036, 80 Cal.Rptr.2d 828, 968 P.2d 539, 554 n.20 (1999) (the determinative factor in California's presumption against extraterritoriality is the location of the conduct).
[5] The stalking statute excludes ''[c]onstitutionally protected activity'' from the definition of ''pattern of conduct.'' Cal. Civ. Code s 1708.7(b)(1); see also id. s 1708.7(f) (''This section shall not be construed to impair any constitutionally protected activity, including, but not limited to, speech, protest, and assembly.''). The question before us is whether Tony and Adam Kazal's conduct was protected by the First Amendment and thus excluded from coverage under the statute.
(Footnote omitted.)
401 The factual foundation for that determination was that -
The Kazals hired protestors, organized leafletting, hired a van to drive around Los Angeles with a message on its side, and published emails online to ''openly and vigorously [ ] mak[e] the public aware'' of their views of David's business practices.
402 The prima facie position was that this activity constituted protected free speech. However this would be otherwise if its content rose to the level of a "true threat". A "true threat" is a concept developed in US constitutional cases which refers to threats that are not protected by the First Amendment. The majority opinion stated at [12-14] that true threats were, "statements where the speaker means to communicate a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals", though the speaker "need not actually intend to carry out the threat". The majority stated at [18] that in civil cases the test was objective, with the Court only asking "whether a reasonable person would foresee that the statement would be interpreted by those to whom the maker communicates the statement as a serious expression of intent to harm or assault". This was referred to as the "reasonable speaker" test, citing Planned Parenthood of the Columbia/Willamette Inc v American Coalition of Life Activists, 290 F.3d 1058 (9th Cir, 2002) and United States v. Orozco-Santillan, 903 F.2d 1262, 1265 (9th Cir, 1990). The Court did not decide whether a subjective element that was required in criminal cases also needed to be satisfied in a civil case, being a subjective intent to threaten. The Court held that the conduct of Adam and Tony Kazal did not satisfy either test, stating at [19] -
A reasonable speaker could not conclude that David would understand these communications to threaten anything more than a continuation of this campaign to provide their side of the story. Nor is there any evidence that Tony subjectively intended to threaten violence. Tony wrote in an email to his investigator that he intended to "screw with" David. In context, this did not show an "intent to commit an act of unlawful violence."
403 The above findings were made by reference to a standard of review under which the Court made an independent de novo examination of the whole record in order to determine for itself whether speech constituted a "true threat" and was therefore unprotected by the First Amendment to the US Constitution.
404 Therefore, there were two issues of relevance that were determined by the US Court of Appeals that were essential to its disposition of the proceeding. The first was whether, by reference to an objective standard, the reasonable speaker would conclude that the communications by Adam Kazal would be understood as threatening a serious intent to commit an act of unlawful violence. The second issue was, on the hypothesis that a subjective intent to threaten had to be shown, whether Adam Kazal subjectively intended to threaten violence. Both issues were determined in favour of Adam Kazal.
405 The issue before the primary judge was in what sum should damages be assessed in respect of publications that occurred outside the United States. As I have mentioned, his Honour excluded from the assessment of damages publications within the United States on the ground that the evidence showed that the laws of that country in relation to damage to reputation by defamatory publications was substantively different from that in Australia such that no reliance could be placed upon the common law presumption of fact that the laws are the same: see, Walker v W A Pickles Pty Ltd [1980] 2 NSWLR 281 at 284-285 (Hutley JA); Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; 223 CLR 331 [16] (Gleeson CJ, [115], [125] (Gummow and Hayne JJ), [249] (Callinan J) and [275] (Heydon J). The legally indispensable issues that the US Court of Appeals determined were different from the relevant issues before the primary judge, which were: (1) whether in relation to torts committed outside the United States the appellants had engaged in conduct that was unjustified, improper, or lacking bona fides such that it aggravated the respondents' harm and could be taken into account in assessing compensatory damages in accordance with the principles referred to in Triggell v Pheeney [1951] HCA 23; 82 CLR 497 at 514 (Dixon, Williams, Webb and Kitto JJ); and (2) whether the respondents' conduct should otherwise be taken into account in assessing compensatory damages in accordance with the well-known principle stated by Lord Esher in Praed v Graham (1889) 24 QBD 53 at 55 that in assessing damages for defamation the whole of the publisher's conduct down to judgment may be relevant: see, Nationwide News Pty Ltd v Rush [2020] FCAFC 115; 380 ALR 432 at [428]-[429] (White, Gleeson and Wheelahan JJ). The determination of these issues did not require any findings that the aggravating conduct, or conduct that might otherwise inform the assessment of damages, be unlawful or itself constitute a civil wrong: Nationwide News Pty Ltd v Rush at [441]. Nor was the objective "reasonable speaker" test that was applied by the US Court of Appeals relevant. And whether Adam Kazal had an actual intent to threaten violence was not the issue. In determining whether there was aggravating conduct that should be taken into account in assessing compensatory damages the issue was whether, for the purposes of the law of tort in Australia, the conduct of Adam Kazal was not justifiable as between the parties and had the result of increasing the hurt to Mr David in relation to torts that had occurred outside the United States. And in assessing compensatory damages generally, there is a broad range of circumstances that may be taken into account.
406 The judge's findings concerning the Los Angeles conduct were concerned with what Adam Kazal did, and its effect on Mr David and his family. Neither inquiry involved determining whether Adam Kazal exercised a right to constitutionally-protected free speech in the United States by reference to the objective standard of the "reasonable speaker", and neither inquiry was dependent upon establishing that Adam Kazal committed the tort of stalking under Californian law. Further, the judge's findings had as their focus the fact that the conduct of Adam Kazal was inseparably linked to parallel conduct in Sydney: see J12 [356]. There is therefore nothing about the primary judge's findings on damages that suggests that the US Court of Appeals decision was erroneous. What Adam Kazal did was not put in issue. And the decision of the US Appeals Court did not operate as a preclusion on the primary judge accepting Mr David's unchallenged evidence, during which he broke down in tears. Mr David gave evidence of his reaction to Adam Kazal's email of 28 October 2016, that he was traumatised, and that he was in fear of his life and the lives of the members of his family: see J12 [227], [232] and [355].
407 Counsel for the appellants also submitted that the primary judge erred at J12 [313]-[316] in imputing to Charif Kazal the conduct of Adam Kazal. The judge's findings were as follows -
313 Charif asserted that there was no evidence of his being involved in Adam's conduct in October and November 2016. However, two of the orders that I made by consent on 11 November 2016 had required Adam to cease publishing on the Kazal website and YouTube and remove from the website a video entitled "STREET PROTESTS AND VANS EXPOSING THE CORPORATE THIEVES RODRIC DAVID AND DAVID SINGH". The Full Court set aside the convictions that I entered against Adam for breaching those orders. They also found that, although there was no doubt the video continued to be available on the website and YouTube after 11 November 2016, Adam's convictions had to be set aside because as they said (Kazal 256 FCR at 121 [66]):
[i]n this case, aspects of the available evidence positively suggested that the appellant [Adam] did not in fact have control of the Family Website, in particular because it was operated by his brother, Charif. It was a reasonable possibility therefore that the appellant may not have had the control and thus capacity to determine whether or not the video continued to be on the Family Website. The suggestion at least followed that, rather than him, his brother or perhaps somebody else also had control of the means by which the video was on YouTube, although that is less clear.
(emphasis added)
314 Thus there was an inference consistent with Adam not being in a position to bring about compliance with the orders to take the video down and so there was a reasonable doubt as to his guilt.
315 However, because Charif, as he admitted in this proceeding, controlled the Kazal website, he was a publisher of the video showing the street protests and vans. I infer that this video was, or was similar to, the video in evidence which Mr MacCallum played from the website during the trial, that I described at [245] above. It is also safe to infer that Charif posted that video on the website because he intended to disseminate more widely how Adam and he were "exposing" the alleged conduct of Mr David and Mr Singh. In addition, he made or authorised the posting of content on the Kazal's website during the period of Adam's conduct in contempt, that repeated, yet again, the imputations, that I infer he knew at all times after 11 November 2016, Adam had given undertakings not to publish. For example, on 27 November 2016, Charif posted on the Kazal website an email he had sent to Mr Singh entitled "Charif Kazal Queries why David Singh a corporate fraud who stole $180 million, has nothing to say? - Day 62". The post commenced by asserting that for nearly nine weeks Charif had "highlighted to you the many crimes you and Rodric David committed". He wrote to Mr Singh:
… the best you could come up with to respond to the most damaging allegations a businessman could face was for you to have your wife seek an AVO against my brother Adam because he is driving a van around time [sic] exposing you for being a Corporate Fraud who stole $180 million from our family…
My website www.kazalfamilystory.com is tracking all of the despicable acts Corporate Thief #1 (C1) Rodric David and Corporate Thief #2 (C2) David Singh committed against Tony & I.
(emphasis added)
316 Moreover, Charif continued the publication on the Kazal website of the stream of emails that he and his brothers, including Tony, wrote to Mr David, Mr Singh and their employees that repeated one or more of the imputations that the landing page and or the Intro article conveyed up to March 2017 and have remained accessible to anyone visiting the Kazal website since then (see [244] above).
408 Counsel for the appellants submitted that these findings were contrary to the respondents' own case. Counsel relied on the following exchange at trial between the primary judge and senior counsel for Thunder Studios and Mr David at T28/20-27 -
SENIOR COUNSEL: Your Honour asked me, secondly, do we say that the conduct of 20 October/November 2016 which was, of course, not just vans but posters, placards, videos and so on is something that we rely upon as impugning Charif. And the answer is no; we don't have that evidence.
HIS HONOUR: So but you were just relying on that against Adam, so - - -
SENIOR COUNSEL: Yes.
409 Contrary to the appellants' submissions, the primary judge did not at J12 [313]-[316] impute Adam Kazal's conduct to Charif Kazal. The judge's findings were concerned with the publication of those activities on the Kazal website, which Charif Kazal had admitted to controlling.
(p) The primary judge erred in finding, at [230], that the Appellants physically threatened David;
410 This ground of appeal was not supported by any submissions on behalf of the appellants and is without merit. The ground is not a fair reflection of the primary judge's findings at J12 [230], as it strips the reference to physical threats from its context. At J12 [230] the judge addressed credit issues affecting Mr David's evidence, in the course of which his Honour stated -
Most of his evidence, apart from his state of mind, was consistent with objective facts or satisfied me as to its inherent plausibility. I have said that some of his account is coloured by the hurt and pain of the abusive conduct of the Kazals beginning with his arrest in the UAE, and continuing with the online and then physical threats and harassment to which he was exposed.
411 The physical threats and harassment, as opposed to those that were online, included the use of the vans, the protestors, and the placards that were the subject of his Honour's findings.
(q) The primary judge erred, at [245], in finding that the YouTube video played by Mr MacCallum during the trial was available for viewing though the Kazal Website and, at [315], that Charif Kazal had continued to publish that video, or one similar to it, after the Court had enjoined its publication on 11 November 2016;
412 This ground of appeal was also not the subject of any submissions. The primary judge did not find in terms at J12 [245] that the YouTube video that was downloaded and viewed during the course of the trial was "available for viewing through the Kazal website". At J12 [245] his Honour referred to a "Google article on the Kazal website" thereby suggesting that a Google page was the source of the reference to the YouTube video, although the position is not entirely clear, as this Court has only the written record of the trial and the recordings of the YouTube videos that were tendered. There were references in the transcript of the trial when the YouTube videos were played to a "YouTube link" (at T211/19) and to a "Google page" (at T212/34). What does appear from the evidence is that Charif Kazal had a YouTube account, and the evidence at trial was that the videos that were played in Court were from his YouTube account. I do not consider that this matter of detail is material to the most relevant aspect of the judge's findings at J12 [315], namely that Charif Kazal posted the video showing the street protests and vans, which became exhibit B, because "he intended to disseminate more widely how Adam and he were 'exposing' the alleged conduct of Mr David and Mr Singh".
(r) The primary judge erred, at [325], [326] and [327], in his characterisation of the findings of Jones J in Emergent;
413 Counsel for the appellants made submissions about the primary judge's characterisation of the findings of Jones J in Re Emergent in support of Grounds 5(a)(v) and (vi) and 5(b), claiming that his Honour's characterisation gave rise to a reasonable apprehension of bias. At [277]-[279], [291], and [294]-[295] above I rejected the underlying foundation for the submissions.
(s) The primary judge erred in holding, at [339], that there was no evidence that anyone to whom the matters complained of were published knew of the actual findings of Jones J in Emergent or had read a fair report of them;
(t) As a consequence of the error identified in paragraph (s) above, the primary judge erred in finding, at [324], that the Appellants' case in mitigation of damages had no proper basis;
414 At J12 [339] the primary judge considered, for the purpose of assessing damages, whether account should be taken of the possibility that Mr David's reputation could have been affected, to a minor extent, in the eyes of persons who had knowledge of the findings of Jones J in Re Emergent. The judge held that there was no evidence that anyone to whom the matters complained of were published knew of the actual findings of Jones J or had read a fair report of them, and nor was there any evidence of any effect of the findings on Mr David's reputation. Counsel for the appellants on appeal did not develop any submissions in support of the above grounds, and I reject them.
(u) The primary judge erred, at [341], in finding that the Appellants' submission that the following allegations and finding made against David and Thunder were the cause of any actual loss of business they claimed to have suffered was unjustifiable:
(i) the finding of Jones J in Emergent that David was not always truthful in his evidence and had breached his fiduciary duty;
(ii) a jury finding of fraud against David in proceedings brought by a former business associate; and
(iii) the Focus of Cars proceeding against David and Thunder which included allegations of fraud against them;
(v) As a consequence of the error identified in paragraph (u) above, the primary judge erred in finding, at [341], that in making the submission the Appellants had aggravated the damages suffered by David;
415 Grounds 10(u) and (v) challenge the judge's findings at J12 [341] that the conduct of counsel for the appellants in cross-examining Mr David and making submissions about other court proceedings in which a jury in the United States made a finding of fraud against him, and about the character of Mr Panos, whom Mr David called as a witness, aggravated the damage. The findings at J12 [341] were as follows -
I reject the respondents' submission that Mr David had had a number of most serious allegations and findings against him in the conduct of his business, and had chosen to associate with others, such as Mr Panos, of the same ilk. In my opinion that submission was unjustifiable and aggravated the damages. First, the proposition that Mr David had made such a conscious choice was not put to him. I doubt that the respondents intended the submission to include his unfortunate business association with Charif, Tony and other members of the Kazal family. And, had Mr David had any inkling of how they behaved in business and elsewhere, it is unlikely that he would never be where he is now. Secondly, the respondents referred in cross examining Mr David to a jury finding in a proceeding that Carey Martell brought. Thunder had employed him as a vice president from January 2015 to late 2016. Mr David and Mr Martell had a falling out and Mr Martell took proceedings that Mr David "didn't attend". The jury made a finding of fraud, but the judgment was vacated by agreement. The circumstances of that proceeding and the settlement are not in evidence. The jury's findings were vacated by consent. There is no sufficient basis on which to make any findings about Mr David's conduct in relation to his dealings with Mr Martell, who agreed to the jury's findings being vacated. Nor is there any evidence of the effect, if any, of the jury's finding on Mr David's reputation.
416 It is plain that the judge rejected the submissions that were put, and did not think much of the submissions. However, in my view the judge was in error to treat the submissions and the cross-examination as aggravating the damage. Such a finding would have required subordinate findings that the cross-examination and submissions were unjustified, improper, or lacked bona fides in the way discussed by Walsh JA in Rigby v Associated Newspapers [1969] 1 NSWR 729 at 740, cited with approval by the Full Court in Nationwide News Pty Ltd v Rush [2020] FCAFC 115; 380 ALR 432 at [433]. No specific findings of this nature were made. As the Full Court explained in Rush at [432] -
... The reason for the requirement that conduct in the course of defending a proceeding must meet the threshold of being unjustified, improper or lacking bona fides in order to qualify as a basis for awarding aggravated damages is the unfairness that would result if proper conduct in the pursuit of a legitimate defence exposed a publisher to increased damages on that account
417 In support, the Full Court referred to Coyne v Citizen Finance Ltd [1991] HCA 10; 172 CLR 211 at 237 (Toohey J), citing Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348 at 379 where Samuels JA stated -
It is quite clear, in my opinion, that the vigorous persistence in a legitimate defence cannot be used to aggravate the damages. The manifest unfairness of any contrary view is obvious.
418 In circumstances where Mr David had been the subject of a finding of breach of his fiduciary duties as a director, had been the subject of a finding of fraud by a Californian jury, albeit in an undefended proceeding that was later compromised on appeal, and where counsel for Mr David called as a witness Mr Panos, who had reached a compromise with the United States Securities and Exchange Commission in relation to claims of creating fraudulent shelf companies, I cannot agree that it was outside the bounds of legitimate advocacy to raise these matters as issues affecting the assessment of damages. The fact that the judge rejected the submissions, and that one of the submissions of counsel for the appellants misfired because its substance was not put to Mr David in cross-examination, did not for these reasons render the appellants' conduct of the trial, as between the parties, unjustified, improper, or lacking bona fides. I would therefore uphold Grounds 10(u) and (v).
(w) The primary judge should have taken the findings of Jones J in Emergent into account as mitigating any damage.
419 No separate submissions were made on behalf of the appellants in relation to Ground 10(w). The ground is a loaded one, because it likely rests on an assumption that the findings of Jones J were far more serious than the primary judge considered them to be at J12 [178] and [327], and also upon an assumption that the findings were known to persons to whom the matters were published, which the judge did not accept. For the reasons I have given, I am not persuaded that the judge was in error in his characterisation of the findings of Jones J, or in relation to his finding that there was no evidence that the findings were known to persons to whom the matters were published. It follows that Ground 10(w) should be rejected.