APPEAL AND NEW TRIAL – NEW TRIAL - IN GENERAL AND PARTICULAR GROUNDS
– PARTICULAR GROUNDS – MISDIRECTION OR NON-DIRECTION
– where
the respondent is a seller of off-road caravans – where the appellant
Source
Original judgment source is linked above.
Catchwords
APPEAL AND NEW TRIAL – NEW TRIAL - IN GENERAL AND PARTICULAR GROUNDS– PARTICULAR GROUNDS – MISDIRECTION OR NON-DIRECTION– wherethe respondent is a seller of off-road caravans – where the appellantallowed others to publish material on herwebsite “Lemon Caravans &RVs in Aus” which was critical of the respondent – where theappellant also publishedher own material on her website which was critical ofthe respondent – where the respondent brought proceedings in the DistrictCourt alleging that the appellant made these publications maliciously and withthe intention of causing financial harm to the respondent– where therespondent claimed it had suffered loss of profits by reason of theappellant’s publication of these maliciousfalsehoods – where afterthe trial the jury found that the appellant had made statements that therespondent’s caravanswere defective, of poor quality, unsafe andoverpriced – where the jury found that the appellant made the statements
with the
intention of causing financial harm to the respondent – where the
learned trial judge gave judgment in favour of the respondent
in the sum of
$357,000 – where the appellant’s counsel at trial submitted that the
jury should be directed in terms of
the dicta of Dixon J in
Briginshaw v Briginshaw – where the learned trial judge directed
the jury about the onus of proof, notably, that the onus was similar to weighing
the
cases on a set of scales – where the learned trial judge directed the
jury about malice – where the allegations made
by the respondent against
the appellant were serious because they impugned her integrity – whether
the jury was misdirected
as to the appropriate standard of proof
APPEAL AND NEW TRIAL – NEW TRIAL - IN GENERAL AND PARTICULAR GROUNDS
– PARTICULAR GROUNDS – IMPROPER ADMISSION OR
REJECTION OF EVIDENCE
– where the respondent is a seller of off-road caravans – where the
appellant allowed others to
publish material on her website “Lemon
Caravans & RVs in Aus” which was critical of the respondent –
where
the appellant also published her own material on her website which was
critical of the respondent – where the respondent brought
proceedings in
the District Court alleging that the appellant made these publications
maliciously and with the intention of causing
financial harm to the respondent
– where the respondent claimed it had suffered loss of profits by reason
of the appellant’s
publication of these malicious falsehoods – where
after the trial the jury found that the appellant had made statements that
the
respondent’s caravans were defective, of poor quality, unsafe and
overpriced – where the jury found that the appellant
made the statements
with the intention of causing financial harm to the respondent – where the
learned trial judge gave judgment
in favour of the respondent in the sum of
$357,000 – where the appellant submits that that evidence given to prove
the respondent’s
loss of profit was inadmissible – where the
evidence given about the expected sales of the respondent exhibited through
graphs
were not prepared by the witness and the witness was unable to explain
the basis for the expected sales or, indeed, when that expectation
was held by
him or anyone else – where the witness candidly said that there were
discrepancies in the graph – whether
the evidence was admissible
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –
PLEADINGS – where the appellant submits that the learned
trial judge erred
in permitting an amendment to be made to the statement of claim – where
this ground bears a relationship
to the ground of appeal above that contends
that evidence given to prove the respondent’s loss of profit was
inadmissible –
where the amendments were to the loss and damage suffered
by the respondent – where the appellant opposed these amendments
on the
ground that the respondent’s subjective reasonable expectations about
future sales were not a material fact that could
form a basis for a claim for
loss of profits – where the learned trial judge did not consider that the
amendment constituted
“such a significant change in the nature of the case
that would prejudice” the appellant – whether the learned
trial
judge erred in permitting the amendments to the statement of claim
Alford v Magee (1952) 85 CLR 437
[1952] HCA 3, cited
Balden v
Shorter [1933] Ch 427, cited
Briginshaw v Briginshaw (1938) 60 CLR
336
[1938] HCA 34, considered
Joyce v Motor Surveys Ltd [1948] Ch
252, cited
Loudon v Ryder (No 2) [1953] Ch 423, cited
Makita
(Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
[2001] NSWCA 305,
cited
Judgment (118 paragraphs)
[1]
APPEAL AND NEW TRIAL - NEW TRIAL - IN GENERAL AND PARTICULAR GROUNDS - PARTICULAR GROUNDS - MISDIRECTION OR NON-DIRECTION - where the respondent is a seller of off-road caravans - where the appellant allowed others to publish material on her website "Lemon Caravans & RVs in Aus" which was critical of the respondent - where the appellant also published her own material on her website which was critical of the respondent - where the respondent brought proceedings in the District Court alleging that the appellant made these publications maliciously and with the intention of causing financial harm to the respondent - where the respondent claimed it had suffered loss of profits by reason of the appellant's publication of these malicious falsehoods - where after the trial the jury found that the appellant had made statements that the respondent's caravans were defective, of poor quality, unsafe and overpriced - where the jury found that the appellant made the statements with the intention of causing financial harm to the respondent - where the learned trial judge gave judgment in favour of the respondent in the sum of $357,000 - where the appellant's counsel at trial submitted that the jury should be directed in terms of the dicta of Dixon J in Briginshaw v Briginshaw - where the learned trial judge directed the jury about the onus of proof, notably, that the onus was similar to weighing the cases on a set of scales - where the learned trial judge directed the jury about malice - where the allegations made by the respondent against the appellant were serious because they impugned her integrity - whether the jury was misdirected as to the appropriate standard of proof
[2]
APPEAL AND NEW TRIAL - NEW TRIAL - IN GENERAL AND PARTICULAR GROUNDS - PARTICULAR GROUNDS - IMPROPER ADMISSION OR REJECTION OF EVIDENCE - where the respondent is a seller of off-road caravans - where the appellant allowed others to publish material on her website "Lemon Caravans & RVs in Aus" which was critical of the respondent - where the appellant also published her own material on her website which was critical of the respondent - where the respondent brought proceedings in the District Court alleging that the appellant made these publications maliciously and with the intention of causing financial harm to the respondent - where the respondent claimed it had suffered loss of profits by reason of the appellant's publication of these malicious falsehoods - where after the trial the jury found that the appellant had made statements that the respondent's caravans were defective, of poor quality, unsafe and overpriced - where the jury found that the appellant made the statements with the intention of causing financial harm to the respondent - where the learned trial judge gave judgment in favour of the respondent in the sum of $357,000 - where the appellant submits that that evidence given to prove the respondent's loss of profit was inadmissible - where the evidence given about the expected sales of the respondent exhibited through graphs were not prepared by the witness and the witness was unable to explain the basis for the expected sales or, indeed, when that expectation was held by him or anyone else - where the witness candidly said that there were discrepancies in the graph - whether the evidence was admissible
[3]
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - where the appellant submits that the learned trial judge erred in permitting an amendment to be made to the statement of claim - where this ground bears a relationship to the ground of appeal above that contends that evidence given to prove the respondent's loss of profit was inadmissible - where the amendments were to the loss and damage suffered by the respondent - where the appellant opposed these amendments on the ground that the respondent's subjective reasonable expectations about future sales were not a material fact that could form a basis for a claim for loss of profits - where the learned trial judge did not consider that the amendment constituted "such a significant change in the nature of the case that would prejudice" the appellant - whether the learned trial judge erred in permitting the amendments to the statement of claim
[1] SOFRONOFF P: The respondent is a seller of off-road caravans. In April 2018 a man named Mr Coles bought a caravan from the respondent and began to have difficulties with it. Mr Coles became a very dissatisfied customer although it is not clear that his dissatisfaction was actually due to any failure on the part of the respondent. In any case the respondent tried to address his concerns but, after some communications with the respondent, in April 2019, with the assistance of a woman named Lisa Desmond, Mr Coles established a website on which he related his disappointments. The publication on Mr Coles's website falsely alleged that the respondent produced defective caravans, that they were of poor quality, that they were unsafe and that they were not worth the price charged for them.
[2] The appellant also had a website which she called "Lemon Caravans & RVs in Aus", the content of which she controlled. On 5 May 2019 the appellant allowed Ms Desmond to publish material on her website which included a hyperlink to Mr Coles's website. In this way visitors to the appellant's website had a referral, as well as easy access, to Mr Coles's critical statements. The respondent alleged that by this means the appellant became the publisher of the content of Mr Coles's website and this was referred to in the proceedings as the "first statement".
[3] On 30 June 2019 the appellant published a statement of her own on her Lemon Caravans website. This statement contained further material which was critical of the respondent's products. This was referred to as the "second statement". On 2 July 2019 the appellant made alterations to her post which contained further criticisms. This was the "third statement". Finally, on 4 July 2019 the appellant published yet another similar statement on her website, the "fourth statement". For the purposes of this appeal it is not necessary to detail the contents of the four statements. All of them, in one way or another, were very critical of the respondent's business practices and the caravans that it sold.
[4] The respondent brought proceedings in the District Court alleging that the appellant made these publications maliciously and with the intention of causing financial harm to the respondent. The respondent claimed it had suffered loss of profits by reason of the appellant's publication of these malicious falsehoods.
[11]
"So my suggestion, in good faith, is to advise your client to cease this aggressively litigious behaviour, comply with their ACL obligations and then I will report a good outcome. The alternative is extensive and ongoing negative publicity, significant costs and potential loss of sales."
[12]
[8] Thus, the parties' opposing cases were, on the respondent's side, that the appellant had set out to harm the respondent's business of selling caravans by the publication of false statements that its caravans were defective and, on the appellant's side, that she was publishing these statements believing them to be true and in order to inform people who had an interest in being warned about these kinds of defects.
[9] The case was tried by Sheridan DCJ and a jury. The jury found that the appellant had made statements that the respondent's caravans were defective, of poor quality, unsafe and overpriced. The jury found that the appellant had published statements imputing that the respondent had refused to assist customers, had bullied and threatened customers, and had made other damaging imputations. The jury found that all of these imputations were false. The jury found that the appellant made the statements with the intention of causing financial harm to the respondent. The jury found that the respondent had proved that the publication of the first and fourth statements had caused loss to the respondent but found that the respondent had failed to prove that the publication of the second and third statements had done so. The jury assessed the damages caused by the first publication to be $214,000 and the damages caused by the publication of the fourth statement to be $143,000.
[10] Upon these findings, Sheridan DCJ gave judgment in favour of the respondent in the sum of $357,000. Her Honour also gave injunctive relief to restrain further similar publications by the appellant and made a costs order in favour of the respondent.
[11] The appellant has appealed against these orders. It is convenient to consider at the outset the appellant's submissions about the instructions which her Honour gave to the jury about onus of proof.
[12] The jury was given a set of written questions which they were required to answer. A single example will demonstrate the way in which the questions were put:
[13]
Has Bruder Expedition proved that the "first statement" published on or about 5 May 2019 conveyed to the ordinary reasonable reader the meaning alleged?
[14]
If you have answered "proved" in column 2B for a particular meaning, has Bruder Expedition also proved that the meaning was false?
[15]
If you have answered "proved" in column 2C for a particular meaning, has Bruder Expedition also proved that Ms Leigh published the statement conveying this meaning with the intention of causing financial harm to Bruder Expedition?
[16]
Bruder Expedition produces off road caravans which are defective
[17]
[13] The appellant's counsel submitted to her Honour that, in relation to the issue of malice, the jury should be directed in terms of the dicta of Dixon J in Briginshaw v Briginshaw.[2]
[14] Briginshaw was a divorce case in which the husband had to prove that his wife had committed adultery. The High Court held that the standard of proof was proof on the balance of probabilities rather than beyond a reasonable doubt. The controversy between the parties about the standard of proof arose because the co-respondent submitted that the criminal standard of proof applied, having regard to the seriousness of the allegation which was the subject of proof.[3]
[15] Latham CJ observed that the standard of proof will vary in accordance with the seriousness or importance of the issue. His Honour quoted the following passage from Wills' Circumstantial Evidence:[4]
[18]
"Men will pronounce without hesitation that a person owes another a hundred pounds on evidence which they certainly would not hang him, and yet all the rules of law applying to one case apply to the other and the processes are the same."
[19]
[16] Dixon J said that the application of the civil standard to proof of facts was not a mere mechanical comparison of probabilities. Rather, the fact finder must feel an actual persuasion of the occurrence of the relevant fact before its existence can be found. An opinion that a state of facts exists may be held according to indefinite gradations of certainty. However, except in criminal cases, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. Reasonable satisfaction on the balance of probabilities is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. In particular, the seriousness of the allegation made, the inherent unlikelihood of an occurrence, or the gravity of the consequences flowing from a particular finding, are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.[5] His Honour said:
[20]
"This does not mean that some standard of persuasion is fixed intermediate between the satisfaction beyond reasonable doubt required upon a criminal inquest and the reasonable satisfaction which in a civil issue may, not must, be based upon a preponderance of probability. It means that the nature of the issue necessarily affects the process by which reasonable satisfaction is attained."[6]
[21]
[17] After introducing to the jury the document that contained the questions stating that the respondent had the burden of proving the elements of its cause of action and after telling the jury that the respondent had to prove the necessary facts on the balance of probabilities, her Honour directed as follows:[7]
[22]
"It is often compared to weighing the cases on a set of scales; if one side of the scales is weighed down ever so much more slightly than the other side, that is sufficient.
[23]
On each question you ask: is that more probable than not? If your answer is "Yes" then you answer "Proved". If you are not satisfied that something is more probable than not, you answer "Not Proved".
[24]
[18] Later, her Honour instructed the jury about the respondent's allegation that the appellant had published the statements maliciously. Relevantly, her Honour directed the jury as follows:
[25]
"'Malice' on the part of the defendant, Ms Leigh, is a critical element of the action. It has been said that "impropriety of purpose is the essence of malice".
[26]
Again, like the other elements, the onus is on the plaintiff to prove that Ms Leigh acted maliciously. There is no onus on Ms Leigh to prove that she did not act maliciously.
[27]
Here, if you accept the meanings, or some of them attributed to the first, second, third or fourth statements as alleged by the plaintiff and you find them, or some of them, to be false, you should next consider whether the plaintiff has proved they were published maliciously by Ms Leigh in that she did so with an intention to cause Bruder Expedition financial harm.
[28]
The issue for you will concern your assessment of Ms Leigh's intention or state of mind at the time when she published those statements. "Intent" and "intention" are familiar words. In this legal context, they carry their ordinary meaning. In ascertaining Ms Leigh's intention, you are drawing an inference from facts which you find established by the evidence concerning her state of mind.
[29]
Intention may be inferred or deduced from the circumstances in which the publications were made, and from the conduct of Ms Leigh before, at the time of, or after she made the publications. And, of course, whatever a person has said about their intention may be looked at for the purpose of deciding what that intention was at the relevant time.
[30]
Now we know that in every day life that sometimes more than one thing will cause us to act or cause us to speak, we will have more than one motive. In considering Ms Leigh's intention, you will need to find that her intention to cause financial harm to the plaintiff was, at the time she published those statements, a dominant motive or reason for publishing those statements. If you find that at the time she published those statements, she did so with that dominant motive to cause financial harm that means Ms Leigh published the statements maliciously.
[31]
The fact of reasonable foreseeability of harm by the defendant is not part of the cause of action. So, if you accept the evidence of Ms Leigh that "it's just a fact of life - if something negative is said about a company ... there is a potential that they will lose sales", that does not mean that, in publishing those statements, the necessary impropriety of purpose has been proved. That is, it is not enough that Ms Leigh foresaw that financial harm to Bruder Expeditions was one possible, even a likely consequence, of her actions. Ms Leigh has to have intended that harm.
[32]
In relation to the third statement, the plaintiff also says that in publishing that statement Ms Leigh did so with a reckless indifference as to its truth or falsity. This is an alternative plea. So, in relation to the publication of the third statement, you will need to consider whether it was published with an intent to cause financial harm and you will need to consider whether it was published with a reckless indifference as to its truth or falsity. Depending on the evidence you accept, you could find both proven, one or the other proven or neither proven.
[33]
Again, your answer to this will depend on your assessment of Ms Leigh's evidence in relation to the publication of this statement.
[34]
To prove, 'reckless indifference' will require something more than carelessness, even to a high degree. Carelessness, even to a high degree, is insufficient to establish malice. The plaintiff will need to prove a complete disregard as to whether the statement was true or false. It will require proof of a high level of indifference; a deliberate wilful blindness to the facts.
[35]
If you find that the third statement was made by Ms Leigh with a 'reckless indifference as to whether it was true or false', that means Ms Leigh published that statement maliciously.
[36]
In answering these questions, as I have said, your focus will be on the evidence of Ms Leigh and the inferences you draw from the facts which you find proved; remembering that you may only draw reasonable inferences from the facts you find proved by the evidence.
[37]
Now the last thing on malice, a finding of malice is a very serious finding because it involves a finding of improper motive. So it is not one that you would make lightly. You would want to feel an appropriate degree of persuasion before you would make a finding like that."
[38]
[19] It is necessary to distinguish between malice, as a fact, and the facts led in evidence as proof of malice.[8] In actions for malicious falsehood, malice is a question of motive and intention.[9] Malice means some dishonest or otherwise improper motive.[10] In the absence of an admission it will be necessary to prove a person's state of mind by the inference to be drawn from circumstantial evidence. A plaintiff suing for malicious falsehood must prove that the statement sued upon was false. It is not necessary that the defendant should have known the statement was false when it was published. However, evidence of such knowledge may be evidence of malice. In a particular case that might be conclusive evidence but that is not necessarily so. Evidence of carelessness in checking the truth may also be evidence of malice. In Loudon v Ryder (No 2)[11] the defendant had wrongheadedly asserted a falsehood that affected the plaintiff's title to certain funds. He was found to be "an impulsive and emotional person". The trial judge held that:
[39]
"It may be that his acceptance was careless and was due to the fact that he was an advocate of the mother against her daughters; but that he acted in an ill-considered and foolish way does not make his act fraudulent. Recklessness, as used when applied to fraud, is never the same as carelessness."[12]
[40]
[20] Similarly, in Balden v Shorter[13] it was held that it was necessary to prove actual malice in the sense of a wrongful intention to injure the plaintiff, and that the making of a false statement will not support such an action if the statement was made in the belief, even a careless belief, that it was true but without any hostile motive to injure the plaintiff. On the other hand, the making of a statement believed to be true might nevertheless give rise to a valid claim if the motive for making it was improper. In Joyce v Motor Surveys Ltd[14] the defendant had published a statement to business connections of the plaintiff that the plaintiff's tenancy had been terminated. The judge decided the case upon the footing that the defendant may have believed the statement to be true. Nevertheless, it was actionable because it was false and it was actuated by an improper motive.
[21] The allegations which the appellant made against the respondent included allegations of dishonesty. Not only did the case put to the jury contain the allegation that the appellant made some of her statements reckless as to the truth and that, under the guise of informing consumers about defective goods, she was really setting out to harm the respondent, the cross-examination of the appellant proceeded in part upon the basis that she was telling lies in her evidence and the respondent's counsel submitted to the jury that they should find that that was so.
[22] Therefore this was a case in which the respondent's allegations against the appellant were serious because they impugned her integrity. There is no doubt that the appellant was someone who was emotionally intense in her opinions on the subject of caravan manufacturing and that she was, accordingly, prone to use the most vigorous and vehement, even intemperate, language when criticising the respondent and others. Such an emotional frame of mind can frequently give rise to the pursuit of ends that are improper but they do not always do so. It would have been one thing for the appellant, believing Mr Coles's false complaints to be true, even if the belief was an instance of wilful blindness, to think that she should publish his complaints as a warning to potential purchasers of the respondent's caravans and to persist in publishing them until the respondent rectified matters. Her motive in such a case would not have been to harm the respondent, although that might be the incidental result. It would have been to warn potential purchasers. It would have been quite another thing for the appellant to publish Mr Coles's untrue statements, not caring whether they were true or not, and not in order to warn potential customers to take care against possible loss, but for the dominant or real purpose to hurt the respondent's business. Both are instances of commercially damaging acts but only the second is actionable. That is because the second example involves the appellant acting maliciously. In this context, to allege malice is to make a serious allegation about a person's lack of integrity.
[41]
"30. As a consequence of the respondent publishing the first, second, third and/or fourth statements the applicant has:
[42]
(a) suffered loss and damage in the sum of $900,000.00 particulars of which are as follows:-
[43]
(i) the applicant's suppliers are enforcing stricter trading terms meaning that the applicant can only manufacture on average 1.5 caravans per month, as opposed to the applicant's production of, on average, 2.6 caravans per month prior to 5 May 2019;
[44]
(ii) the applicant had forecasted demand for 3 caravans per month for the 12 month period from May 2019 to May 2020;
[45]
(iii) it will take the applicant at least 12 months to rebuild its reputation with its suppliers;
[46]
(iv) the average gross profit per caravan is $50,000.00;
[47]
(v) the plaintiff has therefore lost the ability to sell 18 further caravans over a 12 month period resulting in a loss of gross profit of $900,000.00 (exclusive of Goods and Services Tax); and
[48]
(b) alternatively suffered loss and damage in the sum of $900,000.00 particulars of which are as follows:-
[49]
(vi) the applicant only has demand for on average 1.5 caravans per month since 5 May 2019;
[50]
(vii) the applicant had forecast demand for 3 caravans per month for the 12 month period from May 2019 to May 2020;
[51]
(viii) it will take the applicant at least 12 months to rebuild its reputation in the marketplace;
[52]
(ix) the average gross profit per caravan is $50,000.00;
[53]
(x) the plaintiff has therefore lost the ability to sell 18 further caravans over a 12 month period resulting in a loss of gross profit of $900,000.00 (exclusive of Goods and Services Tax);"
[54]
(c) further or alternatively lost the opportunity to sell at least eight caravans to potential customers, those being the individuals referred to in paragraphs 26, 27 and 28 above, the gross profit of which opportunity is at least $400,000 (exclusive of Goods and Services Tax).
[55]
(d) further as a consequence of the respondent's conduct as pleaded herein the applicant was required to employ a salesperson to deal with customer enquiries regarding the respondent's statements and to rectify the applicant's reputation in the marketplace at a cost of $95,000.00 per annum plus superannuation together with a motor vehicle." (emphasis added)
[56]
[29] On the first day of the trial the respondent applied to amend the statement of claim to substitute it with the following:
[57]
"30. As a consequence of the respondent publishing the first, second, third and/or fourth statements the applicant has:
[58]
(a) suffered loss and damage in the sum of $483,064.00 particulars of which are as follows:-
[59]
(i) in February 2019 the plaintiff received orders for one EPX6 and three EXP4 caravans;
[60]
(ii) in March 2019 the plaintiff received orders for one EXP4 and four EXP6 caravans;
[61]
(iii) in April 2019 the plaintiff received orders for two EPX4 and three EXP6 caravans;
[62]
(iv) based upon the sales pleaded in (i)-(iii) herein the plaintiff reasonably expected that in May 2019 it would have received orders for three EXP4 and two EXP6 caravans;
[63]
(v) the plaintiff received an order for one EXP-6 caravan in May 2019;
[64]
(vi) the plaintiff reasonably expected that in June 2019 it would have received orders for three XP4 and three XP6 caravans;
[65]
(vii) in June 2019 the plaintiff received orders for one XP4 and two XP6 caravans;
[66]
(viii) for the period 1-11 July 2019 the plaintiff received an order for one XP4 caravan;
[67]
(ix) for the period 12-31 July 2019 the plaintiff received orders for two XP4 and two XP6 caravans;
[68]
(x) if not for the defendant publishing the first, second, third and fourth statement pleaded herein the plaintiff would have sold an additional six XP4 caravans at a gross profit of $109,495.00 and six XP6 caravans at a gross profit of $373,569.00 being a total of $483,064.00 as set out in attachment A to this pleading.
[69]
Further or alternatively as a consequence of the respondent's publication of the first, second, third and fourth statements the applicant has suffered a loss of general business in the sum of $200,000.00." (emphasis added)
[70]
[30] The appellant opposed leave to make the amendments on the ground that the plaintiff's subjective reasonable expectations about future sales were not a material fact that could form a basis for a claim for loss of profits. She also opposed leave on other grounds. The learned judge allowed the amendment for the reason that she did not consider that the amendment constituted "such a significant change in the nature of the case that would prejudice" the appellant. Her Honour did not give any reasons for rejecting the submission that the claim lacked any legal coherence.
[31] Consistently with this new plea, the respondent led evidence from Mr Daniel Bosschieter, who was one of the respondent's directors. He did so by reference to certain graphs which were tendered as exhibit 50. These graphs showed the number and value of actual and "expected" orders and sales between January and October 2019. Mr Bosschieter had not prepared these graphs himself. He said in evidence that they had been prepared by "[o]ur accounts girl". This exhibit showed that, for example, the respondent "expected" to sell a total of five caravans in May, six in June and eight in July.
[32] Mr Bosschieter was unable to explain the basis for the expected sales or, indeed, when that expectation was held by him or anyone else. It also became apparent that the "expected" sales of zero for January was not an expectation that was ever held by anyone but was actually a record of a past event, namely that there had been no sales in January. This was, said Mr Bosschieter, "some discrepancy in the graph there". Mr Bosschieter gave evidence of different months when the expectation of sales was formed but finally admitted that it "would be fair to say that the orange line [which showed expected sales] has got some inconsistencies in there". When pressed, he said that the expectations were "created off facts that we knew and expectations of where we were going" but gave no further data. The evidence culminated in the following:
[71]
"How was this line prepared? How did the person who prepared this document know to input a figure that would result in showing a decline after March of 2019 into April of 2019?---I don't know exactly.
[72]
Right. Well, what is the point of your coming along to give evidence before this jury about a chart that someone else prepared that you had no input into?---I did have input into it, so I beg to---
[73]
What - what input did you have into that part?---I did work with Jodie [the "accounts girl"] on this. I did not do the line section through there.
[74]
All right?---However, you will be able to - if you would like to, I can give you the minutes from our general meetings about what our expectations are for sales.
[75]
Have you disclosed those?---No, I haven't, but this is---"
[76]
[33] It is fundamental that, in order for expert opinion evidence to be admissible, the facts upon which the opinion is based must be proved by evidence. It has been said that it is the prime duty of an expert who is giving opinion evidence to furnish the trier of fact with criteria enabling evaluation of the expert's conclusions. Merely to offer expert opinion without furnishing the means to evaluate the opinion would constitute an impermissible usurpation by the expert of the function of the judge or the jury.[16]
[34] Claims for loss of past or future profit are commonly made in cases involving the commission of torts which have a consequential commercial effect. Conformably with the onus of proof and the standard of proof, a plaintiff claiming damages for loss of profits in such a case must prove the probable amount of profit that would have been made but for the commission of the tort. The profit that the directors of a plaintiff company expected that the company would have made in a period might well be the probable amount of profit that the company would have made. But that will be so not because the directors held that expectation. It will be so because, objectively and based upon facts proved in evidence, the amount is in fact the probable amount of profit that the company would have made but for the commission of the tort. The relevant allegation in such a case is that, but for the tort, the plaintiff would have made certain profits. The certainty implied by the words "would have" is, of course, tempered by the standard of proof which requires a court to treat as certain that which it finds to be probable. However, the fact that somebody, even somebody intimately connected with a business, held an expectation about future profits is not evidence that can be used to prove loss of profits.
[35] In this case, it can be accepted that Mr Bosschieter is a skilled and experienced man of business. However, he was not proved to be, nor was he put forward as, an expert qualified to analyse facts and, upon such an analysis, to offer a sound hypothesis upon which a court could act about the amount of profit the respondent would have made but for an interfering event. Nor was he able to prove facts from which probable future sales could be inferred by someone capable of doing so. The problem in this case is that the evidence which Mr Bosschieter gave about the expectations which he held (and were evidently shared by Jodie, the "accounts girl") was given in proof of a direct allegation of a purported material fact and was, for that reason only, admissible despite the fact that he had no expertise to offer it. His opinion was only made admissible because the respondent pleaded an irrelevant fact, the sales that the respondent "reasonably expected". The plea about expected sales was bad and the amendment should not have been allowed.
[77]
"All right. But that doesn't get us away from the fact that all of the figures you inputted were subject to adjustment?---Okay. Yeah, we're going to go round in circles here.
[78]
And you can't assist the jury with what the actual cost of goods sold would be?---The cost of goods sold on an average is 120,000.
[79]
No, the cost of goods sold after you make your quarterly adjustments?‑‑‑In some cases, yes. In other cases, no.
[80]
Thank you. And tell me, the way the so-called cost of goods sold is worked out, particularly with these quarterly adjustments, is that your accounting staff work out what is an amount that can be put into an invoice from the manufacturing company to the expedition company that will keep both companies afloat?---It's an amount so that both companies, yes, do stay afloat.
[81]
So it doesn't actually reflect the cost of producing the caravan. It may be more than the actual cost; it may be less than the actual cost. But the process isn't to work out what the actual cost is of producing the caravan. The process is to work out how you want the funds distributed between the two companies?---No. It is worked out under costs, right? It's not like we are sending invoices across of half a million backwards and forwards or 50,000 here or 50,000 there to keep both companies afloat. It is based on the cost of production of units."
[82]
[38] It may be the case, as Mr Bosschieter said, that the costs shown on the invoices that he tendered to prove the respondent's loss were "based off an average of our actual costs" but, in the result, there was no evidence of the actual value of lost sales or of a lost sale.
[39] A further problem was that the number of actual orders made shown in exhibit 50 was understated for several of the months. This was revealed when the respondent's invoices were disclosed during the trial. For the month of June they showed six sales whereas exhibit 50 showed only two sales. The invoices showed eight sales in September while exhibit 50 showed only three sales. There were also discrepancies the other way. It followed that the figures put before the jury by way of exhibit 50, upon which the respondent relied in its counsel's address to the jury, were incapable of supporting the claim.
[40] For these reasons the jury's findings about loss of profits cannot be sustained.
[41] The appellant also relied upon grounds of appeal concerning another later amendment. The amendment was allowed after the close of evidence, including the evidence of the appellant. The amendment was to add an allegation that the appellant made the third statement not only with the intention of harming the respondent but, additionally, "with reckless indifference as to whether the third statement was true or not". The jury found that the respondent had proved both allegations. However, the jury declined to find that the making of the third statement had caused any loss. Consequently, the amendment went nowhere.
[42] However, the appellant argued that the amendment placed a "false and distracting issue before the jury". That submission cannot be accepted. Even if the amendment had not been made, the appellant was cross-examined about the statement and about the lack of any basis for making them. Recklessness of that kind is evidence of bad motive and, whether or not there was a plea of the kind that was added, it was open to the respondent, after fairly putting the matter in issue in cross-examination, to rely upon it in proof of its case. In the result, the respondent's counsel limited his reliance upon that factor to an argument about the third statement. Consequently, this ground should be rejected.
[43] Having regard to the conclusions that have been reached in relation to the matters discussed above, it is not necessary to consider the appellant's remaining grounds of appeal.
[83]
(a) Judgment for the respondent in this appeal against the appellant for $357,000;
[84]
(b) That the appellant be restrained by herself or her servants or agents from publishing, causing to be published, encouraging, requesting or enabling to be published by any means whatsoever any statements, comments or images with respect to the respondent and the products sold by any means whatsoever including but not limited to on a Facebook page entitled 'Lemon Caravans and RV's in Aus' to the same effect or matters substantially to the same effect as statements, comments or images that:
[85]
Bruder produces off road caravans which are defective;
Bruder produces off road caravans which are of poor quality;
[86]
Bruder produces off road caravans which are unsafe;
[87]
Bruder's off road caravans are overpriced and not good value for money;
2. Bruder refuses to assist its customers;
3. The application filed by Bruder was vexatious litigation;
4. Bruder sold a caravan which was severely defective;
5. Bruder was required to provide a refund to the owner of the severely defective caravan;
[88]
The severely defective caravan sold by Bruder could have killed the owner due to the suspension giving away whilst driving.
[89]
(c) An order requiring the appellant to pay the respondent's costs.
[90]
[45] For the reasons given, these orders must be set aside. There remains the question of what orders should now be made. Uniform Civil Procedure Rules1999 (Qld) r 770(1) confers a discretion upon the Court of Appeal to order a new trial if it appears to the Court that there ought to be such a trial. UCPR r 770(2) provides:
[91]
"Unless the Court of Appeal considers some substantial wrong or miscarriage happened, a new trial may not be granted merely because -
[92]
(a) evidence was improperly rejected or admitted; or
[93]
(ii) the verdict of the jury was not taken on a question that the judge at the trial was not asked to leave to the jury."
[94]
[46] The appellant submitted that if the appeal is allowed on the ground of want of proof, as it has been, then there ought be no retrial.
[47] It is not for this court to substitute its own views for that of the jury by speculating about what the jury might have decided if it had been directed properly.[18] Further, there is no rigid principle of law or practice about when a retrial will or will not be ordered. The court's jurisdiction depends upon the demands of justice. What is done or not done at the trial is an important consideration and will affect the court's exercise of discretion.[19]
[48] In relation to the jury's damages verdicts, the setting aside of those verdicts is a consequence of the respondent's failure to plead and prove a rational case on damages. The respondent persisted in maintaining a flawed case despite the appellant's correct submission that the case as pleaded was bad in law. It should be accepted, therefore, that the respondent put forward the case that it wished to put forward and it has failed in that endeavour. In these circumstances, it would not be a proper exercise of discretion to provide the respondent with an opportunity of mending its hand (assuming that to be possible) at a new trial.[20]
[49] The injunctive relief that the respondent sought and obtained presents a different case. This part of the judgment cannot stand because the findings about malice were the product of misdirection. That misdirection had the result that there is a real risk that the jury arrived at its finding by an erroneous path. This means that the appellant has suffered a miscarriage of justice and for that reason the injunction must be set aside.
[50] As in the case of the claim for damages, the error which requires upsetting the jury's verdict is an error into which the learned judge was led by the respondent's counsel's opposition to the giving of a Briginshaw direction, something which was judged at the time to be to the respondent's advantage. The discretion to order a retrial should not be exercised in this case to permit the respondent to have a second go at persuading a jury about its case when the need for the trouble and expense of a second case had been brought about by the way in which it conducted the trial.
[95]
(b) Orders made by Sheridan DCJ on 1 November 2019 and on 20 December 2019 are set aside.
[96]
(d) The respondent pay the costs of the appellant of the proceeding including the appeal.
[97]
[52] DAVIS J: I agree with the reasons of Sofronoff P and the orders proposed by his Honour.
[53] WILSON J: I also agree with the reasons of Sofronoff P.
[98]
[1] THE COURT: In the course of Sofronoff P's reasons for judgment in this appeal, with which Davis and Wilson JJ agreed, there was the following:
[99]
"[25] The room for error by the omission of the direction was increased by the omission in the summing up to identify for the jury the relevant evidence and the way in which that evidence was relevant to the jury's task. The law has to be given to the jury not merely with reference to the evidence in the case but with an explanation of how the law applies to the facts of the particular case. A summing up should also sum up the case for each party and remind the jury of the arguments of counsel in relation to the issues they have to decide. No such directions were sought on the appellant's behalf at the trial and no complaint was made about their absence on appeal." (footnote omitted)
[100]
[2] That criticism of the learned trial judge's reasons was based upon the draft of Sheridan DCJ's summing up which was tendered on the appeal as an exhibit.
[3] This was a jury trial. The appellant's grounds of appeal included grounds that asserted defects in the learned trial judge's summing up to the jury. At the commencement of the hearing of the appeal the Court observed that the parties had not included in the appeal record the learned trial judge's summing up to the jury. The Court had access to a draft of the proposed summing up which was on the court file and counsel were each given a copy of that draft.
[4] The Court was informed by counsel that they had each been given a copy of a draft of the summing up by Sheridan DCJ in good time before her Honour was to sum up the case and that, apart from inconsequential minor verbal differences between the oral summing up and the draft, the draft in the Court's hands "reflects what was actually said to the jury in the summing up".[21] The Court allowed the parties time to consider whether or not they were prepared to conduct the appeal upon that footing.[22] Sometime later on the same day, both counsel assured the Court that the draft document was "an accurate record of the summing-up".[23] On that basis the document was admitted as exhibit 5 on the appeal.
[5] During argument on the appeal there was not a great deal of reference made to the summing up except so far as the appellant directed attention, in support of certain grounds of appeal, to directions that her Honour declined to make although they had been sought.[24]
[6] The Court has now learned that the summing up was indeed transcribed. A perusal of the transcript of the actual summing up makes it clear that the criticism in paragraph [25] of Sofronoff P's reasons is unjustified. Although the draft tendered at the hearing of the appeal did not contain any reference to counsel's addresses to the jury, the transcript of Sheridan DCJ's summing up shows that her Honour dealt in detail with the case of each party.[25]
[101]
[1] Paragraphs [14], [17], [22] and [25] of the Second Further Amended Statement of Claim.
[7] Remarkably the summing up was not transcribed. However, the parties agreed that a draft of the summing up provided to them adequately represented Sheridan DCJ's summing up. That was tendered in the appeal as Exhibit 5.
[104]
[8]British Railway Traffic and Electric Co Ltd v CRC Co Ltd & London County Council[1922] 2 KB 260 at 269.
[17] Concerning inadmissible evidence (grounds (3) and (4)), the effect of the respondent's withdrawal of certain allegations (ground (5)), a failure to give a Jones v Dunkel direction (ground (7)), parts of the summing up concerning an action brought by Mr Coles (ground 8)), the withdrawal of a right to return a general verdict (ground (9)) and whether the jury's verdicts in relation to publication, malice, falsity of the fourth statement and the attribution of loss to the first and fourth statements were perverse (ground (10)).
[20]cf. Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd(1977) 16 ALR 23 at 38.
[115]
[21] Transcript of appeal hearing, page 1-6, line 13, per Mr Morris QC.
[116]
[23]Ibid, page 1-65, line 45, per Mr Morris QC; ibid, page 1-66, line 3, per Mr Martin QC.
[117]
[24] Mr Martin QC, for the respondent, referred to it when responding to a question from the bench about damages at page 1-97, lines 14 to 31; Mr Morris QC directed attention to the parts of the summing up which were the subject of grounds of appeal, namely the use of scales as a metaphor to explain the onus of proof: ibid, page 1-51, lines 5 to 21; the failure to direct the jury concerning Briginshaw v Briginshaw[1938] HCA 34; (1938) 60 CLR 336:ibid, page 1-54, lines 1 to 3; the failure to direct the jury about Jones v Dunkel[1959] HCA 8; (1959) 101 CLR 298:ibid, page 1-56, lines 25 to 32; her Honour's directions about causation: ibid, page 1-58, line 11 et seq.
[118]
[25] The transcript of that part of the summing up covers 5 pages.
Parties
Applicant/Plaintiff:
# Leigh
Respondent/Defendant:
Bruder Expedition Pty Ltd \[2020\] QCA 246
Cases Cited (9)
(1952) 85 CLR 437
(1938) 60 CLR 336
(2001) 52 NSWLR 705
(2002) 212 CLR 1
(1949) 79 CLR 442
(1964) 111 CLR 234
(1991) 173 CLR 33
(1977) 16 ALR 23
(1959) 101 CLR 298
[5] As to malice, the respondent pleaded that, in respect of each statement, the statement "was published by the [appellant] maliciously in that she did so with the intention of causing the applicant financial harm".[1] After the close of evidence in the case, the respondent was given leave to amend its statement of claim to add the allegation that she had published the third statement "with reckless indifference as to whether the third statement was true or false".
[6] The appellant gave evidence. In her evidence in chief she explained that she had purchased a defective caravan from another manufacturer and had found it difficult to find help in dealing with the problems. She said that the website that was directed to owners of the brand of caravan that she had purchased would not permit her to post negative comments. For that reason she had established her own website in order to permit herself and other purchasers of defective caravans to have a place at which "you would get a frank and fearless opinion on caravans". She said that, before becoming aware of Mr Coles's case, she had heard of the respondent but had had no experience with the company or its caravans. She said that she did not know any people involved with the company. She denied that she had any intention to cause the respondent any financial harm. She said that she had exchanged communications with Mr Coles before permitting the link to his website to be published on her own web page because she would not allow "what we call naming and shaming without evidence". In cross-examination the appellant asserted that her "primary intention was to let other consumers know, and perhaps even other Bruder customers know, that there was, potentially, a really critically serious safety defect ... in this caravan." These were justifications that were consistent with the appellant's case that she had published the material in good faith.
[7] There was evidence which supported the respondent's allegation that the appellant's intention in publishing the statements had been to cause financial harm to the respondent. This evidence as to her state of mind was circumstantial. One example is the concluding paragraph of the appellant's letter dated 2 June 2019 to the respondent's solicitors:
[23] The jury could not correctly perform its task of deciding the appellant's state of mind by a process of "weighing the cases" on a set of scales so that "if one side of the scales is weighed down ever so much more slightly than the other side, that is sufficient" and it was an error to instruct the jury that this was how they should perform their function. This is because, as Dixon J said in Briginshaw, the application of the civil standard to prove facts is not a mere mechanical comparison of probabilities. The jury's task is to consider the evidence which has been led to prove a fact and to determine if that evidence has been able to effect an actual persuasion of mind that the fact exists. The degree of certainty in the fact finder's belief depends upon the standard of proof required. Although it is convenient for lawyers who are familiar with the proposition to refer to "the Briginshaw standard" it must be borne in mind that the case does not establish a third standard of proof which lies between the civil and criminal standards. Briginshaw establishes that, when applying the civil standard of proof, it is only common sense for a rational tribunal of fact which is deciding whether evidence actually proves a fact to bear in mind the seriousness of the allegation in issue, or the gravity of the consequences of a finding, when considering the probative value of the evidence.
[24] This was a case in which, having regard to the respondent's allegation against the appellant, the jury should have been reminded that they should act with care and caution before finding the allegation established. This was a difficult case because, seemingly, the respondent had proved that the appellant was prone to react excessively and, sometimes or even often, to use immoderate and unjustified language when confronted by actions of which she disapproves. That meant that it would have been easy for the jury to leap from a finding of unreasonable and extreme behaviour to a conclusion that what was actually intended was to cause financial harm to the respondent, that is to say, to confuse a disproportionate display of wrongheaded righteous indignation and which has caused harm with acts which were actually intended to harm.
[25] The room for error by the omission of the direction was increased by the omission in the summing up to identify for the jury the relevant evidence and the way in which that evidence was relevant to the jury's task. The law has to be given to the jury not merely with reference to the evidence in the case but with an explanation of how the law applies to the facts of the particular case.[15] A summing up should also sum up the case for each party and remind the jury of the arguments of counsel in relation to the issues they have to decide. No such directions were sought on the appellant's behalf at the trial and no complaint was made about their absence on appeal.
[26] It was an error not to instruct the jury in terms of Briginshaw v Briginshaw and, for that reason, to the extent that the judgment is based upon the findings that required that direction, it cannot stand and must be set aside.
[27] The appellant has also appealed upon the ground that the learned trial judge erred in permitting an amendment to be made to the statement of claim. This ground bears a relationship to a further ground of appeal that contends that evidence given to prove the respondent's loss of profit was inadmissible. It is convenient to consider these grounds together.
[28] The respondent, as the plaintiff, had pleaded its loss by allegations that included the following:
[36] There was also a claim for a loss caused by an alleged need to employ a person "to deal with customer enquiries regarding the respondent's statements and to rectify the applicant's reputation". An employment contract was tendered showing that a person named Mr Brickhill was employed from 17 June 2019. The contract said he was a "Team Member - Sales". Mr Bosschieter said that he himself "was personally doing the majority of sales and talking to people" and that he "did not have the time to do that with the number of comments we were actually getting in, and so we needed to hire other people to - to do sales". The evidence from Mr Bosschieter was that Mr Brickhill was engaged in selling caravans and that he was sent to the United States during the month of October to work at a trade show advertising the respondent's products. Mr Bosschieter was unable to identify any individuals whom Mr Brickhill might have contacted in relation to lost sales as a result of reading the appellant's statements. Nor did he give the slightest details about how the publications took him away from his work and required the employment of Mr Brickhill. In short, there was no evidence to support the claimed loss.
[37] There were also problems of proof with the respondent's figures for the cost of its products. The manufacturer of the caravans sold by the respondent was its related company Bruder Manufacturing Pty Ltd. The two companies were under the same effective control. Although the respondent purchased the caravans from Bruder Manufacturing Pty Ltd, and although the price it paid was based upon the cost of production, the invoices between the two companies did not necessarily represent the cost to the respondent of the caravans that it purchased. This was because, as Mr Bosschieter candidly acknowledged:
[44] Upon the basis of the jury's findings in relation to loss and in relation to the publication of malicious falsehoods, Sheridan DCJ made the following orders: