Whether the primary judge's approach to the Trade Practices Act claim was correct
61 As to (1), the primary judge's approach to the Trade Practices Act claim, Senior Counsel for Ms Madden submitted that the primary judge's reasoning was infected with two principal errors. The first was that his Honour treated three distinct publications with distinct characteristics compendiously. Secondly, it was submitted that his Honour erred in identifying the dividing line between fact and opinion in the s 52 jurisprudence by distinguishing, in effect, a mere expression of opinion on the one hand from everything else on the other. It was submitted that in this latter respect the primary judge should have drawn the dividing line between a fact, a statement of established or historic fact, on the one hand, and matters of comment upon facts, including the possible or probable existence of the facts and opinions, on the other. Reliance was placed on Channel Seven Adelaide Pty Ltd v Manock (2007) 232 CLR 245 at [35], Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 and Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304.
62 The trial proceeded on the basis that there were three publications, Ms Madden's Facebook postings, the White Sands Facebook posting, and the 2 September email: cf Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [102] emphasising that the 'conduct' with which s 52 deals is not confined to 'representations'. The primary judge, at [62], accepted the submission by Ms Madden that each of the three publications had to be examined separately and discrete decisions made as to whether the relevant statutory provisions had been contravened.
63 In so approaching the matter, which involves treating the conduct for the purposes of s 52 as three instances of conduct rather than one, we see no error in the primary judge's approach.
64 Importantly, his Honour noted at [42] that it was not disputed that if Ms Madden's statements conveyed the representations for which Seafolly contended, they would have been likely to mislead or deceive their readers and were false.
65 The only issue for the primary judge therefore, was whether each of Ms Madden's statements conveyed to the ordinary reasonable reader of the relevant publication the meanings for which Seafolly contended, that is, did it convey the meaning that Seafolly had copied Ms Madden's swimwear designs which appeared in the photographs, that Seafolly was not the creator of the original "Seafolly" designs and had copied the White Sands garments; and, in the cases of the Facebook postings, Seafolly had used underhanded means to obtain pictures of the White Sands garments and then copied the White Sands garments to create the Seafolly garments from those photographs.
66 We adopt, for present purposes, the approach contended for by Ms Madden as stated in Dynamic Hearing Pty Ltd v Polaris Communications Pty Ltd (2010) 273 ALR 696, [85]-[86], per Besanko J with whom Moore and Gordon JJ relevantly agreed. His Honour said:
The weight to be given to the advantages enjoyed by the primary judge will depend on the nature of the alleged error under consideration. ….
With these considerations in mind, I think this court must consider the evidence relevant to each alleged error and decide for itself the proper conclusion. If it is a conclusion which differs from the primary judge, then the proper conclusion is that the primary judge has erred. ….
67 Considering first Ms Madden's Facebook postings, it is in our opinion clear that Ms Madden's statements did convey the meanings found by his Honour. We see no error in the analysis of Ms Madden's Facebook postings made by the primary judge, especially at [51].
68 Considering next the 2 September email, in our view it is clear that the email, sent, as the primary judge noted, to a number of journalists amongst others, conveyed the meanings that Seafolly had copied Ms Madden's swimwear designs which appeared in the photographs, that Seafolly was not the creator of the original "Seafolly" swimwear designs so depicted and that it had copied the White Sands garments. Senior Counsel for Seafolly conceded in argument before the Full Court that the 2 September email did not convey the third representation, that is, that Seafolly had used underhanded means (in the taking of photographs by Ms McLaren) to obtain pictures of the White Sands garments.
69 Apart from the matter so conceded, we see no error in the analysis by the primary judge at [15] and [54]-[57]. In our opinion, the central fact on this issue was the attachment to the email of the eight pairs of photographs with the captions "White Sands 2009 - Seafolly 2010" and "White Sands as seen at RAFW in May - Seafolly September 2010" in the context of the subject line "The most sincere form of flattery?" and the text "is it just us, or has Seafolly taken a little to [sic] much 'inspiration' from White Sands?".
70 The juxtaposition of each pair of the photographs invited the reader to compare the two swimsuit designs in the context of the questions that Ms Madden had posed. The answer to those questions was not far to seek. The primary judge was correct in his findings as to the meanings these publications conveyed. An ordinary reasonable reader would reason in the same way as his Honour found. The basis of that reasoning process was explained by the Privy Council in Jones v Skelton [1963] SR (NSW) 644 at 651 and Lloyd v David Syme & Co Ltd [1986] AC 350 at 363H-364A where publishers had used potentially ambiguous words to avoid saying directly what they were getting at in their publications. Their Lordships said in Jones:
The reader, a jury might conclude, was invited to adopt a suspicious approach and so to be guided to the real explanation of what had taken place - an explanation which the writer … did not care or did not dare to express in direct terms.
71 Considering last the White Sands Facebook posting, Ms Madden submitted that it did not convey any of the three representations found by the primary judge. She submitted that the reasoning that led the primary judge to the contrary conclusion was not developed in the judgment, beyond the passage at [58]. There was a suggestion in that passage that his Honour may have taken into account the contents of the Pedestrian TV article in ascertaining the representations conveyed by the White Sands Facebook page. If so, she argued, the learned trial judge plainly erred. There was no evidence that anyone who had read the White Sands Facebook page had clicked through to and read the Pedestrian TV article. In the absence of evidence, there could be no such presumption. Ms Madden submitted that as none of the representations relied upon by Seafolly was conveyed by the White Sands Facebook page, the primary judge should have dismissed Seafolly's causes of action founded upon that publication.
72 Seafolly submitted that the untrue allegations of plagiarism were published on Ms Madden's White Sands Facebook page and referred to [12] of his Honour's reasons. Seafolly also submitted that the primary judge's reliance on reader responses was not misplaced as the responses were contemporary evidence of what readers of Ms Madden's statements understood by them, as followed from the nature of Ms Madden's dissemination. In oral submissions, Senior Counsel for Seafolly's primary submission was that the Court could look at the publication individually and deduce from it the representations found by the primary judge. Senior Counsel submitted that the bully tactics addressed the question of something that Seafolly had done to Ms Madden. Next he submitted that Ms Madden had republished the allegation of plagiarism and that she also impugned Ms McLaren from Seafolly in correcting Ms Teasey, who had suggested that a photographer came to the White Sands showing. Ms Madden stated that it was not a photographer, but a private showing with a 'buyer' who came with a digital camera and took photos. Ms Madden had posted on the White Sands Facebook page: "As it turned out, that 'buyer' was Julie McLaren from Seafolly …". As a result, Senior Counsel argued Ms Madden had republished the fact that her claim had been published in Pedestrian TV. He contended that the words posted on the Facebook page told the reader that Ms Madden had called Seafolly plagiarists and that plagiarism was a very damning accusation and showed that she had been prepared to make it. Ms Teasey had been following the saga from the day before. It would be naive to think that Ms Madden was not actually communicating, in the way in which the page would be read, that there was an assertion which Ms Madden adopted and published that White Sands had called Seafolly plagiarists and she had to be the source of it.
73 The White Sands Facebook page on the morning of 3 September 2010 initially appeared as depicted in the screenshot below but there was more content on the page because a reader could scroll further down it to read the earlier postings:
74 In our opinion, the central fact on this issue was the juxtaposition of two photographs, one of White Sands swimwear and one of Seafolly swimwear, against the statement (appearing below the invitation to write something) "White Sands Swimwear Calls Seafolly Plagiarists - Fashion News - Pedestrian TV". Added to this was White Sands' correction lower down the page that it was not a photographer who took the photos of the White Sands swimwear but a 'buyer' from Seafolly. We see no error in the analysis by the primary judge. It is true to say that the analysis in [58] and in [59] so far as concerns the White Sands Facebook page is limited but it is sufficient and we take the analysis to reflect the way the case was run at first instance.
75 An ordinary reasonable reader will read a publication as a whole before drawing a conclusion as to the meaning it conveys to him or her. There was no evidence before the primary judge as to how readers of Facebook postings would read them. Here, a continuous string of postings on the White Sands Facebook pages between 1 and 3 September 2010 discussed how Seafolly may have come to offer for sale the swimwear designs in the juxtaposed photographs. It is likely that the ordinary reasonable reader of the postings would not have read just the latest posting.
76 The context in which Ms Madden, as White Sands, made those postings included the preceding postings, lower down on the same page. The 3 September 2010 postings themselves referred back to White Sands' earlier postings that a reader would be drawn to lower down on the page. The way in which the ordinary reasonable person reads postings on a Facebook page is unlikely to be the same as the careful and analytical way in which he or she would read a document of great significance for him or her. Rather, the postings are of a conversational character involving a series of short or relatively short statements, often reactive to an earlier posting that appears, or can be found by scrolling, lower down on the same web-page.
77 Where a Court is required to find the meaning conveyed by a publication, document or conduct it must consider the characteristics of the addressee. Sometimes the addressee will be a particular individual or individuals whose actual state of mind can be ascertained at the time when he or she perceived the publication, document or conduct. On other occasions, such as here, there will be very many persons in the class of addressees with their own disparate, distinct characteristics so that it is not practicable or possible to analyse individual circumstances. In such cases, the Court must identify the characteristics of the ordinary reasonable person in the class of addressees and assess the issue by reference to how that hypothetical person would have understood the publication, document or conduct. These concepts are explained, as to issues of misleading or deceptive conduct, by Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ in Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 84-85 [100]-[103] and, as to issues of what meaning is conveyed, by Hunt CJ at CL, with whom Mason P and Handley JA agreed in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 165B-167B. Each judgment emphasises the characteristic of reasonableness in the circumstances where the Court is analysing how the hypothetical addressee would have understood the publication or conduct complained of.
78 Here, the 2 and 3 September 2010 postings concerning the Seafolly designs did not appear on the White Sands Facebook page by themselves or out of context. They had been preceded by the earlier postings on the same subject. The ordinary reasonable reader would have read the newest posting in the context of those immediately below them on the same topic. It would be artificial to think that a reasonable reader who viewed either page without any earlier awareness of the preceding postings on the topic of the Seafolly designs would read only the latest posting. Indeed, the conversational style of the postings suggested that the uninformed ordinary reasonable reader would need to familiarise himself or herself with what was currently being discussed. By doing so, he or she would readily have concluded, as did the primary judge (at [59]), that the common feature of the representations complained of by Seafolly was that it had copied, or plagiarised, Ms Madden's designs. Read chronologically, each of the postings complained of reinforced that conclusion. That meaning was conveyed from first to last with each subsequent posting drawing on the earlier.
79 We are not persuaded that the primary judge made the first of the principal errors for which the appellant contends. Not only did the primary judge say, at [62], that it was necessary that each of the three publications had to be examined separately and discrete decisions made, but that is what the primary judge did at [51]-[53], [58] and [54]-[57] respectively and in summary, referring to each of the statements, at [59].
80 We reject the submission that the primary judge erred by considering the publications together as a single course of conduct and by treating the readers of the publications as if they were a single class. We also reject the submission that the primary judge erred in determining what representations were conveyed by each publication by neglecting to take the nature of email and Facebook media into account: in our opinion, the primary judge plainly took into account those matters.
81 His Honour appears to have considered that each of the intention of Ms Madden to convey the representations complained of and the understanding of persons who read what she had published was relevant to ascertaining whether the representations complained of were, in fact, conveyed. In the end, his Honour correctly concluded that the three representations complained of were conveyed by White Sands' and Ms Madden's Facebook postings and that the first two were also conveyed by the 2 September 2010 email (but, as noted above, his Honour erred in finding that the third representation was conveyed by the email).
82 The question of what meaning each publication conveyed in its natural and ordinary meaning to the public or a class of persons is not determined by evidence of persons who may have read, saw or heard it for the purposes of the law of defamation or legislation as to whether conduct is misleading or deceptive or likely to mislead or deceive the public or class. The question of what is the natural and ordinary meaning conveyed by a publication or conduct is ascertained by the Court or jury applying an objective test of what ordinary reasonable readers, listeners, viewers or members of the class would have understood as the meaning. Thus, in Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 506, Brennan J, with whom Gibbs CJ, Stephen, Murphy and Wilson JJ agreed (see too Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460 at 468 [7] per French CJ, Gummow, Kiefel and Bell JJ) explained the role of the judge or jury:
Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation (Byrne v Deane [[1937] 1 KB 818 at p 833], being a standard common to society generally (Miller v David [(1874) LR 9 CP 118]; Myroft v Sleight [(1921) 90 LJKB 883]; Tolley v J.S. Fry & Sons Ltd [[1939] 1 KB 467 at p 479]).
It follows that the challenged evidence was not admissible to show the meaning which the hypothetical referees would place upon the words in the book. In Abraham v The Advocate Co Ltd [[1946] 2 WWR 181 at p 182] Lord Goddard, delivering the advice of the Judicial Committee, said that witnesses "cannot be asked what meaning they attached to the words because that is the very question the jury have to decide".
83 In cases dealing with issues under s 52 and its analogues whether conduct is misleading or deceptive or likely to mislead or deceive, the Court in Nike 202 CLR at 85 [103] held that "… where the effect of conduct on a class of persons, such as consumers, was in issue, the section must be 'regarded as contemplating the effect of the conduct on reasonable members of the class'" citing what Gibbs CJ had said Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199. See too Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 304 ALR 186 at 195-198 [46]-[56] per French CJ, Crennan, Bell and Keane JJ. The intention of the publisher of defamatory matter to convey the imputations or meanings complained of can be, however, relevant to the issue of whether the publisher was actuated by express malice in making the publication.
84 It is then necessary to consider whether the primary judge erred in concluding that each of the three publications was not a mere expression or expressions of opinion. To repeat, the general submission on behalf of Ms Madden was that the primary judge erred in identifying the dividing line between fact and opinion in the s 52 jurisprudence.
85 The primary judge referred to articles written by journalists to whom Ms Madden had sent her email of 2 September 2010 and comments by readers of those articles (at [55]-[58]) on which Seafolly relied for its malicious falsehood claim. His Honour found that it was "evident from the terms of those articles … [that] the journalists who prepared them clearly understood the 2 September e-mail to contain allegations of copying, made by Ms Madden, against Seafolly. So too did the readers of the articles". The email was headed "The most sincere form of flattery?" and its text was "Is it just us, or has Seafolly taken a little to [sic] much 'inspiration' from White Sands?" together with the eight sets of captioned photographs. The primary judge was entitled to find that this email conveyed only the first two misleading representations referred to in declarations 1.7 and 1.8. The email invited its recipients to draw those conclusions. However, if the primary judge used the articles written by the journalists and the readers' responses to ascertain what the Facebook postings and email conveyed, he would have been in error. In the end, if his Honour made that error, it was of no consequence because he correctly identified the meanings that were conveyed.
86 Turning to the authorities relied on by Ms Madden, Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 was a s 52 case. At [32] French CJ said:
It is important in considering whether conduct is misleading or deceptive to identify clearly the conduct to be characterised. If the conduct is said to consist of a statement made orally or in writing, the first question to be asked is what kind of statement was made. Was it a statement of historic or present fact made on the basis that its truth was known to its maker? Was it a statement of opinion? That is to say was it a statement of "judgment or belief of something as probable, though not certain or established". (footnotes omitted)
87 Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 considered, relevantly, s 1041H of the Corporations Act 2001 (Cth) concerning misleading or deceptive conduct, or conduct likely to mislead or deceive, in relation to a financial product. The principle relied on by Ms Madden was what Heydon J said at [94]:
At least in the context of this case, whether an agreement is a binding contract involves a question of law - that is, a question of opinion. That is the alternative way in which ASIC's case was put - the way it was put in paras 27(b) and 28(d). It was the way the trial judge approached the case. The ASX announcement was not expressly stated in the language of opinion, but what it said about the CREC agreement being a "binding contract" was identifiable as an opinion. The binding quality of an alleged contract is an inherently controversial matter of professional judgment. It is distinct from the historical facts that negotiation occurred and a written agreement was signed. (footnotes omitted)
88 Ms Madden submitted that whether something amounted to plagiarism inherently involved a question of professional judgment. Much the same as a legal judgment, it was a matter about which reasonable minds could differ. At what point does taking inspiration cross the line into plagiarism? She submitted that an allegation of copying or plagiarism, where it was based upon an evaluation of photographs as it was in the case of the email, must import an element of professional judgment rather than assertion of fact.
89 We reject this submission. In our opinion Ms Madden's statements included statements of historic or present fact. Each such statement was made on the basis that its truth was known to its maker. We note in this respect the following questions and answers in the cross-examination of Ms Madden:
Now, you know that on that page you had made claims of copy - you don't deny that? --- On what page.
On your personal Facebook page? --- Yes.
You have made direct claims of copying? --- Yes.
In any event, Ms Madden being a professional swimwear designer, the allegation of copying was apt to import an element of professional judgment rather than assertion of fact.
90 An opinion, generally, is an expression of a point of view based on an identified matter or state of affairs. In the common law of defamation, a defence of fair comment on a matter of public interest could not succeed if the publisher misstated the facts on which the opinion was based: Hunt v Star Newspaper Co Ltd [1908] 2 KB 309 at 319-320 per Fletcher Moulton LJ; Channel Seven Adelaide Pty Ltd v Manock (2007) 232 CLR 245 at 252-253 [4]-[6] per Gleeson CJ, 266 [41], 270 [47] per Gummow, Hayne and Heydon JJ. In essence, the common law defence was concerned to protect the right of persons to express their opinions about facts, such as an event in politics or other aspects of public life, a privileged occasion (such as what was said in a Parliament or a Court), the production of a film or play or the experience of dining at a restaurant. In theory, the common law assumed that either the critic set out, as part of what he or she communicated or referred his or her audience to, or assumed that the audience knew as notorious, a fact and then expressed a view about the fact. By referring to the fact, the critic allowed the audience to consider whether or not they agreed with his or her opinion about it. But, if the critic got the facts in his or her description of them wrong, the common law refused to let him or her defend what he or she said about those "facts" as an opinion.
91 In Thompson v Truth and Sportsman Ltd (1932) 34 SR (NSW) 21 at 24-25 Lord Thankerton, delivering the advice of the Privy Council, cited with approval what Fletcher Moulton LJ had said in Hunt [1908] 2 KB at 319 in rejecting a defence of fair comment and added "… the facts are not truly stated and the necessary foundation for any comment, if separable comment there be, is wanting …". See too Pervan v North Queensland Newspaper Co Ltd (1993) 178 CLR 309 at 322 per Mason CJ, Brennan, Deane, Dawson, Toohey and Gaudron JJ; Manock 232 CLR at 253 [5] per Gleeson CJ, 268 [45] per Gummow, Hayne and Heydon JJ.
92 In the present case, Ms Madden captioned six of the eight Seafolly photographs with incorrect dates of the release of the designs depicted in them. If the dates had been correct, it may have been open to her to argue that what she conveyed about Seafolly was an expression of her opinion. Indeed, Ms Madden's misstatements about the dates of Seafolly's designs going onto the market were part of the misleading nature of her conduct. The dates when Seafolly's designs were marketed were facts, not opinions. Ms Madden got the dates wrong. The dates were critical to her complaint, or on her case, her opinion of plagiarism. Obviously, if she had stated accurately that Seafolly had released its designs before the White Sands comparators, Ms Madden could not have made the assertions that she did. What Bowen CJ, Lockhart and Fitzgerald JJ said of a corporation in Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88 is equally true of an individual, namely:
If a corporation is alleged to have contravened s. 52(1) by making a statement of past or present fact, the corporation's state of mind is immaterial unless the statement involved the state of the corporation's mind. Whether or not s. 52(1) is contravened does not depend upon the corporation's intention or its belief concerning the accuracy of such statement, but upon whether the statement in fact contains or conveys a meaning which is false; that is to say whether the statement contains or conveys a misrepresentation. Most commonly, such a statement will contain or convey a false meaning if what is stated concerning the past or present fact is not accurate; but a statement which is literally true may contain or convey a meaning which is false. (emphasis added)
93 Ms Madden's mistaken belief about when Seafolly's designs were first publicly released cannot justify her then arguing that she was entitled to express an opinion about that false state of affairs. What she wrote was misleading or deceptive because she got the critical facts, from which she drew conclusions, wrong.
94 The primary judge considered that the statements complained of would not have been understood by the class of persons to whom they were addressed as mere expressions of Ms Madden's opinion. Indeed, they were not, for the statements included the critical, but false, dates she used for the comparisons in the juxtaposed photographs. Ms Madden did not put the dates or Ms McLaren's use of her photographs forward as her opinion. She built a house of cards on a false foundation. The falsity of the dates and what Ms McLaren did with her photos having been exposed, the opinions, if that is what they were, were as misleading and deceptive as the false premise with which they were conveyed. The collapse of the cards means that Ms Madden has failed to make good a defence based on expressing an opinion.
95 In our opinion there was no error in the conclusion of the primary judge that in the circumstances the representations were statements of fact and thus constituted misleading or deceptive conduct because the statements were false. We reject the submission that the primary judge mischaracterised Ms Madden's representations as statements of fact rather than statements of opinion.
96 The primary judge's findings as to Ms Madden's state of mind, from [67] and following, were in the alternative and it is not necessary in the present context to consider that issue, being whether the primary judge erred in concluding that, even if the representations were expressions of opinion, they contravened the Trade Practices Act because Ms Madden was reckless in forming them and acted precipitately. However, it will be necessary to consider those findings in dealing with Ms Madden's defamation claim at [118]-[164] below.