Plaintiff v Defendants

2 The defendants, Jarrod Maultby and Laura Stark, neither consented to nor opposed the application to substitute the plaintiff. The defendants did, however, oppose the Court granting leave to the plaintiff to file its PFASOC. In substance the defendants' objections were limited to paragraphs 31, 34 and 36 of the PFASOC.

3 For the reasons that follow, I have decided that I will allow the plaintiff to file the PFASOC subject to:

(a) removing from the particulars to paragraph 31 the section commencing with 'Ongoing loss of sales as follows' and ending with the final word of subparagraph (e);

(b) providing particulars of paragraph 34, the allegation that the representations were made in trade and commerce; and

(c) the plaintiff repleading more precisely the allegation of causation and loss in its Australian Consumer Law claim in paragraph 36.

(a) the summons dated 26 February 2025;

(b) the affidavit of Dhaarshi Sonam Pala affirmed 26 February 2025; and

(c) written submissions filed 24 February 2025.

(a) written submissions filed in support of its summons filed 22 November 2024 seeking orders striking out the plaintiff's amended statement of claim.

6 The plaintiff's PFASOC pleads that Junk Group Trading Pty Ltd ATF Junk Group Discretionary Trust t/as Junk Rubbish Removal (ABN 35 362 475 182) was at all material times a part of a group of companies which operates a rubbish and junk removal business associated with the name JUNK RUBBISH REMOVAL and the domain name junk.com.au. As the name implies, the business provides affordable and convenient junk removal services. It markets its services extensively, including online.

7 The plaintiff pleads that the first defendant and his partner, the second defendant, posted reviews and comments about the business on a number of online platforms. Six such publications are pleaded, which are alleged to have been published between 27 June 2024 and 28 June 2024.

8 In relation to the first two pleaded publications, the plaintiff alleges both publications conveyed the following false meanings:

(a) the costs for the service provided by the business to the first defendant was not disclosed to the first defendant before the service was provided;

(b) that the business operates in an unethical way in that it does not disclose the charges for its services to customers and/or deceives customers; and

(c) that the price information provided by the business before providing its services was dishonest and deceptive.

9 The third pleaded publication was the second plaintiff's purported review of the services provided by the business, posted on TikTok in the form of three separate but sequential videos. The plaintiff pleads that, taken together, the videos convey the following false meanings:

(a) the cost to collect the defendants' waste was advertised by the business to be $39 only;

(b) the defendants' waste left out to collect from the defendants' house was 1 cubic metre of rubbish;

(c) the business and/or Richard Furnari, the owner of the business, made many calls in quick succession to the defendants in a harassing manner; and

(d) the business has a business model of holding mattresses aside to dump on people's property for them to pay to dispose of.

10 The fourth pleaded publication was the second defendant's Google review of the business. The plaintiff alleges the fourth publication contained the following false meanings:

(a) that the business charges more for its services than it discloses in its quotes to customers;

(b) that the business over estimates the cubic metres on collection of rubbish; and

(c) that the business 'rips-off' and scams its customers.

11 The fifth pleaded publication was the first and/or second defendant's review of the business on the TrustPilot website. The plaintiff alleges the fifth publication contains the following false meanings:

(a) that the business charges more than its quotes provided to customers;

(b) that the quotes provided by the business to its customers are incorrect;

(c) that the price for collection of waste from the defendants' house was grossly excessive;

(d) that the business overcharges customers by incorrectly calculating the volume of waste that it picks up from customer's houses; and

(e) that the business 'rips-off' and scams its customers.

12 The sixth pleaded publication was the first and/or second defendant's review of the business posted on productreview.com.au/listings/junkcomau. The plaintiff pleads the sixth publication contains the following false meanings:

(a) that the business provided a quote for $39 to the first and/or second defendant for the removal of rubbish from their house;

(b) that the quote provided by the business to the first and/or second defendant was incorrect;

(c) that the business improperly inflates and increases its calculation of the volume of rubbish collected in order to overcharge customers; and

(d) that the business 'rips-off' and scams its customers.

13 The PFASOC defines the six publications collectively as the Defendants' Publications. Paragraph 29 of the PASOC pleads that the Defendants' Publications were made with malice.

14 Paragraph 30 of the PFASOC pleads that it can be inferred that it was a natural and probable result of the Defendants' Publications that the plaintiff would suffer loss and damage. The defendants' counsel accepted that this aspect of the pleading was intended to address the issue of remoteness.

15 Paragraph 31 of the PFASOC pleads the plaintiff's loss and damage on its injurious falsehood claim. It is in the following terms:

1. As a result of the Defendants' Publications the Plaintiff has suffered loss and damage and loss of business in the form of a decrease of sales immediately following the publication of the material complained about.

Damage to business reputation

Ongoing loss of sales as follows:

a) the plaintiff's business main source of trade is from online enquiries and predominantly new, as opposed to repeat, customers who have found the plaintiff's business through online searches;

b) in July 2024, immediately after the appearance of publications complained about in these proceedings, the conversion rate of customers, which records the number of customers engaging with the plaintiff's business online compared to the number of bookings made, fell from 14.4% to 8.9% with the online advertising click rate falling from 7.7% to 5.9%.

c) at the end of May 2024 there were 309 deals lost, at the end of June 2024 the plaintiff's business recorded 357 deals lost, and at the end of July 2024 the plaintiff's business recorded 401 deals lost. By November 2024 this figure had risen to 536 in November 2024 and has declined significantly since then;

d) as a result of the above, there was a decline of weekly revenue of approximately 27 - 30% as a result of the defendants' conduct complained about (representing approximately $25,281 loss in weekly revenue) with a daily drop in revenue immediately after the posting of the publications on Friday 28 July 2024 of 60% representing a decline of $6,566;

e) the plaintiff's business profit margin varies from job to job due to variations in costs of labour and equipment required, and may be as high as 60% of turnover. The true value of the loss of revenue can only be determined after expert evidence has been completed.

The plaintiff will provide further particulars after evidence has been completed.

16 Paragraphs 32 to 35 of the PFASOC plead the plaintiff's Australian Consumer Law claim. Those paragraphs plead as follows:

32. Furthermore, by reason of the publication of:

a) The Defendants' Publications, the First Defendant and/or Second Defendant represented to the public that:

1. the Business does not disclose the charges for its services to customers when it is engaged to provide services and overcharges customers after providing removal services;

2. the pricing information provided by the Business to its customers is dishonest and deceptive;

3. the Business is conducted unethically in that it does not disclose the charges for its services to customers and/or deceives its customers;

b) [By] Publication 4, Publication 5 and Publication 6, the First Defendant and/or Second Defendant represented to the public that:

1. the Business overcharges customers by incorrectly calculating the volume of waste that it picks up from customer's houses; and/or

ii) the Business rips off and scams its customers.

33. Each of the Representations are false in that:

a) the Business discloses the charges for its services to customers when it is engaged to provide services and does not overcharge customers after providing removal services;

b) the pricing information provided by the Business to its customers is honest and not deceptive;

c) the Business is conducted ethically in that it discloses the charges for its services to customers and it does not deceive its customers;

d) the Business does not overcharge customers by incorrectly calculating the volume of waste that it picks up from customers houses; and

e) the Business does not "rip-off" or scam its customers.

1. Each of the Representations were made by the First Defendant and/or Second Defendant in trade or commerce.

2. In the premises of paragraphs 32 to 34 inclusive, the First Defendant and/or Second Defendant has, in trade or commerce in Australia:

   a) engaged, and is continuing to engage, in conduct which is misleading and deceptive, or likely to mislead or deceive, and which in fact has misled and deceived contrary to section 18 of the Australian Consumer Law; and

Particulars

The Plaintiff refers to the matters set out at paragraph 31 above.

Further particulars will be provided after discovery and closer to trial.

b) in connection with the supply of services, made and is continuing to make false and misleading representations contrary to section 29 of the Australian Consumer Law.

17 Paragraph 36 of the PASOC pleads the plaintiff's loss and damage on its Australian Consumer Law claim:

1. In the premises of paragraphs 31 and 35 the plaintiff has suffered and continues to suffer loss and damage.

18 Paragraph 37 of the PFASOC pleads the defendants' liability for the plaintiff's loss and damage.

19 The PFASOC then sets out the relief sought by the plaintiff which includes declarations, a permanent injunction restraining the defendants from continuing to make statements to the effect of the material complained about in the Defendants' Publications and damages.

20 The defendants neither consented to nor opposed the plaintiff's proposed replacement of the current plaintiff. I am satisfied that the plaintiff has provided an evidentiary basis for the replacement and I will grant leave for the plaintiff's proposed amendments to paragraph 1 of the PFASOC.

21 While the defendants neither consented to nor opposed the plaintiff's proposed replacement of the current plaintiff, the defendants did submit that the PFASOC was deficient in three respects.

22 The first issue raised by the defendants was that the PFASOC did not properly or adequately plead causation. The defendants submitted that the terms of the PFASOC do not plead the causal nexus between the parts of the Defendants' Publications alleged to be false or misleading or deceptive and the plaintiff's alleged loss. This defect was said to mean that the defendants are not able to understand the plaintiff's case theory on causation of its unparticularised loss.

23 The second issue raised by the defendants related to the plaintiff's pleading of loss and damage. The defendants submitted the PFASOC does not clearly plead the malicious falsity alleged to be contained in the Defendants' Publications that is alleged to have caused the plaintiff's loss. The defendants also submitted that the lack of particulars of the plaintiff's alleged loss left the defendants with no facts or circumstances by which the damages may be estimated or calculated. The defendants submitted that given that the plaintiff commenced the proceeding on 31 July 2024, it should be able to provide some estimated quantum of loss to date, even if that loss is ongoing.

24 The defendants' counsel submitted that in an injurious falsehood claim the plaintiff bore the onus of establishing that the publication complained of caused it actual damage, in the form of pecuniary loss.[2] Actual damage can include damage in the form of a general downturn in profits if that is established on the evidence.[3]

25 Counsel submitted the pleading of causation in respect of the Australian Consumer Law claim is deficient in that paragraph 36 of the PFASOC baldly alleges that 'In the premises of paragraphs 31 and 35 [which cross-references paragraphs 32 to 34] the plaintiff has suffered and continues to suffer loss and damage', without expressly alleging causation anywhere.

26 Additionally, counsel said that there are allegations in the Defendants' Publications that are not contended to be false and which provide a compelling alternative cause for the decrease in the plaintiff's sales. These included the reference in Publication 1, 2 and 3 to the plaintiff dumping 26 mattresses on the defendants' driveway; the reference to the plaintiff's appearance on A Current Affair in Publication 6. This was compounded because the plaintiff's PFASOC does not plead the causal effect, or lack of causal effect, of other similar publications that were part of the plaintiff's earlier case but which the plaintiff no longer sues over. This was said to leave the PFASOC completely lacking an identification of the basic circumstances and causal connection between the alleged loss and the Defendants' Publications.

27 In Harmonious Blend Building Corporation Pty Ltd v Keene (No 2) (Harmonious Blend),[4] J Dixon J considered a pleading in which the plaintiff, a building company, claimed loss caused by the defendants' contravention of s 18 of the Australian Consumer Law by engaging in misleading and deceptive conduct in trade or commerce. The relevant conduct concerned two reviews published on the internet. The plaintiff asserted that it was entitled to both general damages for injury to its commercial reputation and for damages for loss of business. I interpose here to note that Junk Group Trading seeks, in this case, to plead loss in the form of both damage to business reputation and ongoing loss of sales.

28 J Dixon J dealt first with the claim for damage to commercial reputation. He noted that it was well settled that when considering the sufficiency of the causal nexus between the impugned conduct and the deception of prospective purchasers in a misleading and deceptive conduct claim concerning damage to commercial reputation, the plaintiff is not required to show reliance on the misrepresentation by a specific member of the public. Such reliance can be inferred.[5] In Harmonious Blend the plaintiff had pleaded reliance in terms very similar to those used in paragraph 30 of the PFASOC of the plaintiff in this proceeding. J Dixon J was prepared to accept, as I am in this case, that it is possible on the face of that pleading for the Court to infer that some potential customers read and were misled by the relevant Defendants' Publications.

29 His Honour then went on to consider a 'difficulty' arising with the link between that inference and the loss claimed. In Harmonious Blend the plaintiff pleaded that in reliance on the relevant publication potential customers did not enter into contracts with the plaintiff or entered into lower value contracts. The particulars to this aspect of the pleading stated that this was to be inferred from the decrease in the number and value of contracts signed in the year the relevant publication was accessible on the internet when compared to other financial years. J Dixon J articulated the difficulty as follows:

The only connection between the drop in the number and value of contracts signed and the publications evident from these particulars is a temporal coincidence. That raises issues of what other causal links between the internet posts and the loss claimed may exist. Significantly, the impugned publications existed alongside other publications of a similarly unflattering nature, which were not the subject of litigation by the plaintiff. These other publications appeared on the 'Product Review' website. Moreover, the inference is contended for from a general review of the plaintiff's accounting records rather than from the evidence of its lost or present customers. Having eschewed that approach, the particulars now fail to contend with the causal potence of the non-actioned publications and the publications that are the responsibility of others. A general inference drawn from transaction and profit trends fails to isolate the causal potency of the particular publication on which each separate cause of action is founded.

Because building contracts are complex, and can be differentiated from widgets, insurance policies or typing courses, the facts of this case can be differentiated from the cases cited by the plaintiff. That said, reliance on conduct of the first defendant as a cause of a drop in the number of building contracts is open on the probabilities from these allegations, in the sense that it is not fanciful. In turn, the court could infer that the plaintiff's commercial reputation had been adversely affected to some extent. The inference to be drawn is a matter for trial and the merits of the claim will be quite a different matter. There may be other equally plausible inferences as to the reasons behind these figures such as the general building industry downturn after the Global Financial Crisis.[6]

30 His Honour noted that the plaintiff only needed to show that the conduct complained of was a cause of the loss, not the only cause. As the plaintiff was relying on an inference said to be available from a downturn in sales, his Honour considered it probable that the defendants might trawl through the plaintiff's records, with expert assistance, to establish at trial that the Court should not infer causation from analysis of trading results. His Honour was concerned that the particulars as expressed invited wide-ranging and broad interlocutory processes, particularly in respect of discovery and expert evidence with the task of determining whether a publication that founded a claim was a cause of a loss of business profits likely mired in uncertain and vague evidence, dependent on the assumptions that an expert was invited to make. The danger for the parties and the Court was that, given the modest quantum of awards of damages for loss of business reputation, the costs of the proceeding could easily become disproportionate to the outcome.

31 Next, J Dixon J turned to the plaintiff's pleading of general damages for loss of business. Unlike in this proceeding, the plaintiff in Harmonious Blend had particularised loss by reference to a decrease in the total value of contracts in the year the publication was available on the internet as well as a decrease in the average total contract price. His Honour noted that proof of actual loss is required when compensation for damage to commercial reputation is claimed under the Australian Consumer Law. While a damaged commercial reputation may be proved, the value of the loss occasioned may not be precisely established on the evidence. Where no actual financial loss is established by evidence, the court remains obliged to assess damages when satisfied that loss has been suffered. In such circumstances the court is required to assess general damages by regard to the nature of the representations or conduct complained of and to the manner and extent of their publication.[7]

32 The plaintiff submitted that the primary purpose of a pleading is to inform the other party of the case that is put against them so that they are not taken by surprise. The task for the Court in deciding whether to grant the plaintiff leave to amend or whether an amendment should not be allowed because it would prejudice, embarrass or delay the fair trial of the proceeding, is to consider the practical justice in all the circumstances of the case before it.

33 The plaintiff's counsel said that the plaintiff's PFASOC clearly put the defendants on notice of the plaintiff's case and so there could be no suggestion that the defendants would be taken by surprise. According to the plaintiff's counsel the issues raised by the defendants were matters that could be raised in their defence and were not properly to be regarded as pleading points.

34 The plaintiff's counsel addressed the defendants' complaint that the PFASOC did not grapple with the impact of the negative but true aspects of the Defendants' Publications nor the impact of the publications and other matters that were negative about the plaintiff but are not the subject of this proceeding. Counsel submitted that was a matter for evidence rather than pleadings and that there were a number of ways in which the evidence will show that specific aspects of the Defendants' Publications had the greatest impact on the plaintiff's business and how it operates.

35 The plaintiff's argued that the particular facts of this case distinguished it from a number of the authorities the defendants relied upon, including Harmonious Blend. In particular, counsel said the plaintiff's business involved a cheap service on a one time basis to customers who mainly identified the plaintiff through online inquiries. It followed that the nature of the Defendants' Publications are more directly linked to sales performance than in cases involving large complex contracts, which may be affected by many different factors.

36 Counsel submitted that it was a matter for expert evidence to distinguish between the impact on business sales of the Defendants' Publications and other disparaging comments being made about the business at the same time as the Defendants' Publications. Counsel argued that this issue did not mean the plaintiff did not have a tenable cause of action and nor did it raise an issue which is frivolous, vexatious or likely to unnecessarily increase the costs of the defendants in responding to the plaintiff's case. Counsel said that the fact there were other publications which are not the subject of the proceeding and truthful aspects to the publications that are the subject of the proceeding did not change the causation. At best it affected the impact and was a matter for evidence.

37 Paragraph 30 of the PFASOC alleges that potential customers contact the plaintiff by finding details of the plaintiff's business from internet searches, which searches would have displayed links to the Defendants' Publications. The plaintiff alleges that it can be inferred that those potential customers of the plaintiff who conducted such a search while deciding whether to engage the plaintiff's business would have accessed and viewed one or more of the Defendants' Publications. I accept that this inference is available on the pleading.

38 As currently pleaded the particulars of ongoing loss of sales at paragraph 31 imply a direct relationship between the fall in the conversion rate of customers who found the plaintiff's business online (and consequential decline in business revenue) and the Defendants' Publications. As in Harmonious Blend, the plaintiff relies on a temporal coincidence. The particulars state that online enquiries are the plaintiff's 'main' source of business. They appear to use the May or possibly June figures for 'deals lost' as the base line for calculating losses consequential to the Defendants' Publications which were published on 27 and 28 June 2024. It is unlikely that all of the extra deals lost in June were the result of publications made in the very final days of that month. This means that on the particulars provided the plaintiff was likely already losing an increasing number of deals before the Defendants' Publications. Further, the particulars simply ignore significant material facts, including the other publications that are no longer the subject of the claim, that work against the plaintiff's loss theory.

39 The particulars of ongoing loss of sales do not have regard to financial considerations by which a company's reputation is ordinarily assessed and which it is to be expected a properly instructed expert will consider. While I accept that the plaintiff's business model is dissimilar to that of a building company, the broad assumptions contained in the plaintiff's particulars of loss are unlikely to be adopted by an expert accountant. The fact that the plaintiff's business is perhaps not subject to as many variables as a more complex business does not mean that it is sufficient to simply allege a purely temporal connection in loss of sales without any regard for other obvious possible contributing factors. In my view the Court and the defendant is entitled to a precise pleading of the plaintiff's case on causation and loss so that the issues in dispute are clearly identified. It is not sufficient to say that these are matters for expert and other evidence. How the defendant will choose to assemble its expert and other evidence will necessarily depend on the pleading. As was noted in Harmonious Blend, discord between the particulars and principled expert assessment would be productive of delay and unreasonable cost in the trial of the claims, which would offend the overarching purpose of civil litigation.

40 I am satisfied that the particulars of loss of sales as currently pleaded in paragraph 31 are likely to prejudice, embarrass or delay a fair trial of the proceeding.

41 It follows that to the extent that paragraph 36 invokes paragraph 31 it too is deficient.

42 The third issue raised by the defendants was that paragraph 34 of the PFASOC failed to plead how the defendants' alleged representations were made 'in trade or commerce' as required to sustain the plaintiff's Australian Consumer Law claim. While the defendants conceded that whether the defendants' representations were made in trade or commerce was a mixed question of fact and law that would be determined at trial, they submitted it was still necessary for the plaintiff to plead the material facts and particulars underpinning this aspect of its allegation. As currently pleaded, the plaintiff has merely asserted a legal conclusion.

43 In response the plaintiff submitted that the issue of whether the defendants' representations were made in trade and commerce is a question to be determined at trial and not on an application to amend the pleadings. The authorities suggest the words 'in trade or commerce' in the context of the Australian Consumer Law and its antecedents have given a wide meaning and include any activity associated with a business contract involving a commercial organisation and its customers.[8] In Thunder Studios Inc (California) v Kazal (No 12),[9] Rares J found that disparaging comments about a service provider on a website designed for that purpose were made in trade or commerce because the comments were designed to encourage others not to do business or invest in projects with the service provider. This aspect of Rares J's judgment was upheld on appeal.[10]

44 Whether the plaintiff is able to establish that the defendants' representations were made 'in trade or commerce' as that phrase is understood in the Australian Consumer Law is a matter for the trial. What the plaintiff must do, however, is plead how it says the representations were made in trade or commerce. Paragraph 34 of the PFASOC merely pleads a legal conclusion without setting out the particulars the plaintiff intends to rely upon to reach that conclusion. It does not put the defendants on notice of the case they are to meet.

45 For the above reasons I will grant the plaintiff leave to file a FASOC substantially in the form of the PFASOC subject to the following changes:

(a) removal of the particulars to paragraph 31 commencing with 'Ongoing loss of sales as follows' and ending with the final word of subparagraph (e);

(b) provision of particulars of paragraph 34, the allegation that the representations were made in trade and commerce;

(c) the plaintiff repleading more precisely the allegation of causation and loss in its Australian Consumer Law claim in paragraph 36.

46 I request the parties confer on the terms of orders giving effect to this ruling, the issue of costs and any consequential directions that may now be required. If the parties are not able to reach agreement on these issues within 14 days of the date of this judgment, the proceeding will be relisted for oral submissions.

[1] Competition and Consumer Act 2010 (Cth) sch 2 (Australian Consumer Law).

[2] Palmer Bruyn & Partners Pty Ltd v Parsons (2001) 208 CLR 388, 432 [136] (Kirby J).

[4] [2015] VSC 276.

[8] Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594, 601, 610-611.

[9] [2022] FCA 110, [296].

[10] Kazal v Thunder Studios Inc (California) [2023] FCAFC 174; (2023) 416 ALR 24, [354] (Wheelahan J).