On 31 August 2021 the plaintiff applied for abridgment of time for service of its summons commencing these proceedings and for an early return date and an interim injunction to restrain the defendant from publishing statements concerning the business of the plaintiff or of its directors, employees or agents. The plaintiff intends to file in due course a statement of claim by which it will plead an action against the defendant for damages for injurious falsehood. Although the application before me was initiated ex parte, the defendant's solicitor had been given notice and he appeared to oppose the grant of interlocutory relief. At the conclusion of the hearing on 31 August 2021 I made the following orders:
1. Up to and including 8 September 2021, the defendant is restrained from making any statements concerning the plaintiff's business or that of any of its directors employees servants or agents whether by email or otherwise to any person or organisation within Australia or China
2. Abridge the time for service of the Summons that is to be filed herein to 5pm today 31 August 2021.
3. Order that the Summons and Affidavit of Morris Newton Owen sworn 30 August 2021 may be filed and served upon the defendant by sending those documents by email to the defendant's solicitor, Mr Justin Drew of McGirr &Associates at pfcmcgirr@mcgirrassoc.com.
4. The proceedings are to continue on pleadings and the plaintiff is to file and serve a statement of claim within 28 days of today's date.
5. The defendant is to file a defence by 19 October 2021.
6. The costs of the application today are reserved.
7. Direct that the Summons is to be made returnable before the Duty Judge at 10.00am on 8 September 2021.
These are my reasons having made those orders. The summary of facts that I now set out is taken from an affidavit on information and belief sworn by the plaintiff's solicitor. Email correspondence from the defendant is annexed to the affidavit, bearing dates between February and August 2021. The plaintiff relies upon the emails as proof of injurious falsehoods already published and as evidence from which the Court should infer that, if not restrained, the defendant will likely publish further such statements and cause significant damage to the plaintiff's business. Annexed to the affidavit are two pages of questions that have been put to the plaintiff by a journalist as a result of the defendant having made allegations to media organisations about the plaintiff's business. The two-page document incorporates answers that the plaintiff supplied to the journalist. I have relied upon those answers as stating at least part of the case that the plaintiff will make in these proceedings to establish that the defendant's allegations concerning it are false.
The plaintiff operates an abattoir at Goulburn and exports sheep meat products. Its general manager is Mr Craig Newton. Prior to November 2018 a significant proportion of its production went to China pursuant to an export/import license granted by an authority of the Chinese government. On 1 November 2018 the Chinese authority suspended the plaintiff's license on the ground that the labelling on a box of consigned goods recorded a different production date from that shown on the accompanying health certificate. The licence remained suspended into 2019.
On 14 May 2019, when the suspension had been in place for nearly 6 months, the defendant introduced himself to Mr Newton as a person who could recruit meat workers in China to work in the plaintiff's abattoir. The defendant also said he could help to achieve reinstatement of the plaintiff's China export licence. The defendant's then business partner was Chaoping (Steve) Chu. Mr Chu arranged a meeting in Beijing on 10 October 2019 between himself, Mr Newton and the certification director of the food safety bureau of China's General Customs Administration, Dr Wang Gang. The plaintiff says that the sole purpose and content of the meeting was that Dr Wang Gang was asked to advise what steps could be taken to expedite reinstatement of the licence. The plaintiff says that the defendant was present "as a silent observer" and that he did not then, or later, assist with having the suspension lifted.
On 18 November 2019 an assistant secretary in the Commonwealth Department of Agriculture made representations on behalf of the plaintiff to have the suspension lifted. Two weeks later, on 3 December 2019, the licence was reinstated. Over the 13 months of suspension the plaintiff suffered a downturn in revenue of more than $19 million compared to prior comparable trading periods. The plaintiff says that reinstatement was achieved through the efforts of Mr Newton, other personnel of the plaintiff, the Commonwealth Department of Agriculture, and Mr Chu.
At some time in late 2019 or early 2020 the defendant and Mr Chu ended their business association. The plaintiff did not proceed with the recruitment of Chinese meat workers through the defendant. Instead, during 2020 it used Mr Chu's services in that regard. Mr Chu has alleged that in 2020 and 2021 the defendant published imputations defamatory of him to the effect that he brought Chinese workers into Australia unlawfully. Such imputations of Mr Chu are conveyed by emails sent to the plaintiff and others during 2021, as described below. Mr Chu also alleges defamatory publication in other media. Earlier this year Mr Chu commenced proceedings against the defendant in this Court claiming damages for the alleged defamation.
Mr Newton has provided a statutory declaration sworn on 20 April 2021 for use by Mr Chu in the defamation proceedings. This states that the plaintiff ceased to do business with the defendant as a result of his failure to pay for meat that was processed and sold to him between July and September 2019 and because of "continued empty promises and misinformation" in connection with lifting the licence suspension. I infer that the defendant must have published an imputation that misconduct of Mr Chu caused the plaintiff to end its business relationship with the defendant and that the relevance of Mr Newton's statutory declaration is to disprove that imputation.
From early February to late March 2021 defendant sent to the plaintiff and others a series of emails airing his grievance that the plaintiff had engaged the recruitment services of Mr Chu rather than his own services in that field. On 8 February 2021 the defendant wrote to the plaintiff in the following terms (errors are as in the original text, in this and in all subsequent quotations):
I went all the length to help Southern meets to get back its liscence but you guys turned your back on me without any hesitation. I started a small labour business with [one of the plaintiff's personnel] and treated him like a brother, he has kept me completely in the dark and deals with the people in secrecy I have introduced to him.
The email continued with a threat that the defendant would contact Dr Wang, Dr Bi and a journalist from The Age. As will be seen below, this threat was carried out over subsequent months.
Also on 8 February 2021 the defendant sent an email to Mr Newton and other personnel of the plaintiff asserting the following:
craig promised that he would do the labour business with us […] [Mr Chu] has gone behind my back of me to exclude me from the labour supply.
On 9 March 2021 the defendant emailed a journalist at The Age of Melbourne, with copies to the plaintiff's personnel, claiming that in October 2019 he had treated Mr Newton "with my ultimate hospitality" in Beijing, including "meeting and dining with Dr Wang Gang". He said that his hospitality and assistance was repaid as follows:
[Mr Newton] promised me to work together closely. Then [Mr Newton] turned round shafted me with 0 hesitation.
On 26 March 2021 the defendant wrote to the plaintiff's personnel, with a copy to Dr Wang, in the following terms:
Dr Wang Gang who has kindly assisted Southern meats suspension lifting is formally under investigation by the anticorruption section of the Chinese customs.
This is a strategic mistake made by the management of Southern meats by choosing to work with [Mr Chu] who the management has no knowledge about his business.
From early April 2021 the defendant expanded the list of addressees for his emails, to include the Commonwealth Department of Foreign Affairs and Trade ("DFAT"); the Australian Broadcasting Commission ("ABC"); Nine News; Dr Wang Gang and another Chinese official, Dr Bi. In an email of 1 May 2021 the defendant addressed Dr Bi as the chief director of the food safety bureau of China General Customs, suggesting that Dr Bi has taken over the position that Dr Wang Gang held in 2019.
I will now summarise the emails upon which the plaintiff will found its action for injurious falsehood. As earlier observed, the plaintiff claims that it has already suffered damage to its business as a result of the dissemination of these emails and it says that they evince an intention on the part of the defendant to continue publishing more material in the same vein. All of the emails were addressed or copied to Mr Newton and/or other personnel of the plaintiff. In the summaries below I have identified some of the additional recipients to whom the emails were either addressed or copied:
1. 2 April 2021, copied to Mr D Merrilees of DFAT, The Age, the ABC, Dr Wang Gang. The email asserts that a few weeks earlier had requested the plaintiff to pay fees in respect of 15 Chinese workers. It states that the defendant has since found out that the plaintiff paid the fees to Mr Chu. The email continues:
This is what I call blatant lying. Southern meets has a culture of lying and this is something I am totally concerned […] How can you say you have proper governance on behalf of your stakeholders if you are lying to your supplier and the press? I strongly recommend the Board of Directors to address this lying culture of Southern meats and I will table my further evidence about a lying culture.
1. 11 April 2021, addressed to the Group Chief Executive of the plaintiff's parent entity ("the CEO"), with copies to The Age and the ABC. The email contains the following concerning meat workers recruited from China and employed in the plaintiff's abattoir:
[All] the Chinese workers supplied by [Mr] Chu have used false information in their visa applications without their, the workers, knowledge. None has 3 years of meat works experience in China required by the rules. They are all plucked from the streets and trained a few weeks without any exception. More fraud to be revealed shortly. I sincerely wish you as the CEO of a public company will act to rectify the problem instead of trying to hide it.
1. 27 April 2021, copied to Mr Merrilees of DFAT, The Age and the ABC. The email incorporated a draft of a letter that the defendant said he proposed to write to Dr Bi, including the following (emphasis added):
Southern Meats's Chinese license was previously suspended and later reinstated on the 2nd of December 2019 after the private meeting of Southern meats' manager Craig Newton with Dr Wanggang. As I was involved with the meeting and know all the details, I would like to report to you that lifting of the license's suspension was done in a corrupted and intransparent way under the behind scene manipulation of Australian businessman Steve Chu who has worked with Dr Wanggang in a few other certification power for favors and money transactions.
As a participant of meat export from Australia to China, may I request the food safety bureau of China general Customs to launch an official investigation into this matter? […] This is also important for the anti-corruption campaign led by President Xi now in China.
1. 30 April 2021, addressed primarily to the CEO and also to, amongst others, to Mr D Merrilees of DFAT, The Age, the ABC, Dr Wang Gang:
Dr Wanggang is under investigation in China by the Chinese customs internal discipline agency and Mr Steve Chu is officially under the investigation both by the taxation Department and the boarder force audit team. […] the 13 workers they [ie the plaintiff] have just employed were sent to Australia with fraudulent visa applications which falsely stated that they had 3 years of related work experiences. […] All these workers pay close to 100,000 Aud to the agent to have their visas done and this is totally against the Australian immigration law […].
[…] From an ethical point of view, Mr Craig Newton has also failed miserably for cutting his supplier off in dealing directly with his supplier's supplier with any discussion and consultation.
[…] As I have previously advised that I will send a letter to Honourable Dr Bi general director of Food safety bureau of China general customs to brief him the events related to Southern Meats's license suspension lifting, I am still in the position to do so if there is no letter of apology from Southern meats for the mistreatment of me.
1. 1 May 2021, to Dr Bi with copies to Southern meats personnel, Mr D Merrilees of DFAT, The Age, the ABC and Dr Wang Gang. This email substantially followed the text of the draft that had been sent to the plaintiff on 27 April 2021. The words that have been highlighted in bold in the draft word as quoted at item (3) above were modified in the letter sent to Dr Bi, as follows:
… the lifting of the Southern meats' license's suspension was done in a corrupted and intransparent way under the behind scene manipulation of Australian businessman Steve Chu who has collaborated with Dr Wanggang in a few other certification power for favors and money transactions such as [Establishment] 90 Narasell Pty Ltd and milk powder plant Est 1957 Nutritional Choice Australia Pty Ltd. Southern meats has made a secret deal with Steve Chu to supply Chinese workers to Southern meats Pty Ltd in exchange for his assistance in lifting the license suspension. This deal benefits Steve Chu greatly amount to 6 million RMB.
1. 10 May 2021, to the plaintiff's personnel with copies to Mr Merrilees of DFAT, The Age, the ABC and Dr Wang Gang:
Steve Chu collected 400k Rmb from each your new Chinese workers after getting their visa with fabricated 3 year work experiences.
I will today contact the meatworks union to protest against the fraudulent behaviour of Steve Chu and the lack of due diligence of Southern meats relating to the recruitment of these 13 overseas workers!
1. 15 May 2021, addressed to the CEO with copies to Mr Merilees of DFAT, The Age, the ABC, Nine News and Dr Wang Gang:
I want to help you get out of this China license suspension lifting and labour supply mess quickly. Here is what you should and need to do:
Because I have sent indisputable evidence of Craig Newton blatant lying to the public, he needs to resign or being sacked. […]
You must believe that Steve Chu is now officially under the federal government multiple agency highest investigation! It is true! Do you really want to be in bed with such a low person?
1. 28 July 2021, addressed to the CEO with copies to Mr Merrilees of DFAT, the Commonwealth Department of Agriculture, The Age, the ABC, Nine News and Dr Wang Gang:
I have heard evidence by [Mr Chu's] own admittance how your Chinese license was regained and I will send it to Chinese Authorities and the Australian Authorities if you on behalf of Southern meats do not immediately apologise in public to me.
On 20 August 2021 counsel for the plaintiff and for the defendant were engaged in discussions to bring to an end the defendant's campaign of disseminating statements damaging to the plaintiff. While the discussions were taking place the defendant sent to the CEO an email that included the following:
[…] I have been in communication with Mr Guo of Chinese General customs about the Beijing meeting and the events related to the lifting of license suspension. Upon request, I can even give you a copy of conversation recording.
My demand to Southern meats has always been consistent: Craig Newton must apologise to me in writing for his bad behaviour and retract his false statutory statements which has been circulating on social media. I hope you will agree to my demand, otherwise I will go ahead having a meeting with the Chinese Authorities to further disclose the information I have been withholding I am sure Southern meats' Chinese license will not benefit from such disclosures.
The reference in this email to Mr Newton's "statutory statements" appears to be to the statutory declaration that was provided for use by Mr Chu in his defamation proceedings, as referred to at [7] above. The plaintiff is unaware of who, if anyone, has circulated the statutory declaration on any social media.
[2]
The elements of the plaintiff's cause of action for injurious falsehood
In Palmer-Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69; 208 CLR 388 at [52] Gummow J stated the elements of the tort of injurious falsehood in a passage that has been accepted as authoritative ever since and has been frequently cited. It is as follows:
Thus, generally, it is said that an action for injurious falsehood has four elements [citations omitted]: (1) a false statement of or concerning the plaintiff's goods or business; (2) publication of that statement by the defendant to a third person; (3) malice on the part of the defendant; and (4) proof by the plaintiff of actual damage (which may include a general loss of business) suffered as a result of the statement.
The plaintiff bears the onus of proving all of these elements including, notably, falsity under element (1) and malice in element (3).
In the circumstances of this case, in order to determine whether an interlocutory injunction should be granted it is necessary to consider, first, whether the plaintiff has at least an arguable case that the defendant's conduct to date satisfies the first three elements of the tort. The second question is whether there appears a likelihood that, if not restrained, the defendant will continue (1) to make false statements concerning the plaintiff and its business (2) to third parties (3) with malice. The third question is whether it is likely that such further conduct by the defendant will cause actual damage to the plaintiff. Finally it will be necessary to evaluate whether the balance of convenience favours the grant of an interlocutory injunction.
[3]
Evidence of false statements made to third parties with malice, to date
Regarding the defendant's conduct up to the date of the application before me, I am satisfied that the plaintiff has a substantial case to advance on element (1), that statements in his email correspondence concerning the plaintiff's business are false. The plaintiff is in a position to adduce rebuttal evidence that would be capable of satisfying the Court on final hearing that all of the following serious allegations, that may be distilled from the emails, are false:
1. that the plaintiff acted dishonestly in engaging Mr Chu rather than the defendant to recruit Chinese meat workers for its Goulburn abattoir;
2. that the company has a culture of lying, including untruthfulness to the press;
3. that in knowing contravention of Australian law the plaintiff has employed Chinese workers who do not have appropriate training or experience and has sought to conceal this state of affairs;
4. that the plaintiff corruptly secured reinstatement of its Chinese export licence by having Mr Chu confer "favors and money" on Dr Wang Gang;
5. that in exchange for Mr Chu having corruptly procured reinstatement of its licence the plaintiff rewarded him with a contract to bring into Australia Chinese meat workers in contravention of Australian visa requirements.
Element (2), publication to third parties, appears to be readily provable by the plaintiff in relation to the emails that the defendant has sent to date. With respect to element (3), malice, in AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd [2010] NSWSC 1395 at [31]-[37] Brereton J (as his Honour then was) cited and discussed many of the authorities that have considered what will constitute this element of the tort and how it may be proved by inference. The following is an extract of the essential points of explanation of malice in this context, drawn from Brereton J's judgment but without repeating his Honour's copious citation of the authorities supporting these propositions:
[31] […] While the notion of "malice" in the context of this tort is not easy to define […], it is a question of motive, intention or state of mind and it involves the use of an occasion for some indirect purpose or indirect motive such as to cause injury to another person […]. […]. Its content has been variously described as "an intent to injure another without just cause or excuse" or "some indirect, dishonest or improper motive" […], or "a purpose or motive that is foreign to the occasion and actuates the making of the statement" […]. It involves that the statement was made mala fide or with a lack of good faith. In this context, while a person who acts in good faith is not liable […], malice may exist without an actual intention to injure […].
[32] As motive must often be inferred from what the defendant did or said or knew, malice is commonly proved by inference […]. Malice may be inferred from the "grossness and falsity of the assertions and the cavalier way in which they were expressed" […]. Proof that the defendant knew that a statement was untrue is ordinarily conclusive evidence that its publication was actuated by an improper motive […]. On the other hand, mere lack of affirmative belief in truth is insufficient of itself to establish malice […]. But malice can be inferred not only where the false publication was made with knowledge of its falsity, but also where it was made with reckless indifference as to whether it was true or false […].
In relation to at least some of the allegations made by the defendant to date, the evidence that could satisfy the Court on final hearing of falsehood would, alone, be capable of also establishing that the defendant knew the statements were false or that he made them with reckless indifference as to their truth or falsity. That is inherent in the nature of those allegations listed at [18] above that concern matters about which it is highly unlikely the defendant would have had any basis for a mistaken but honest and reasonable belief in the truth of what he wrote. Deliberately or recklessly false statements indicate malice.
A finding of malice would also be supported by the repeated expression of grievance about the plaintiff not having engaged the defendant's services to recruit Chinese labour. The whole course of dissemination of derogatory statements about the plaintiff was preceded by the defendant's strong protest concerning the plaintiff dealing with Mr Chu: see [8]-[11] above. During the sequence of damaging statements to third parties, on 14 April 2021 the defendant wrote to Mr Newton and other personnel of the plaintiff as follows:
I need an written apology from Southern meats for lying and directly dealing with my supplier [ie Mr Chu] and full reimbursement for my cost both for recruiting the workers and my relentless efforts to help you lift the suspension.
Complaint about the plaintiff having employed Mr Chu for work that the defendant thinks should gone to him recurred in the emails of 30 April and 1 May 2021 (see items (4) and (5) at [13] above). His demand for an apology in relation to this was reiterated on 28 July and 20 August 2021 (see 13 and [14] above). This recurrent theme reveals that the defendant's allegations about dishonesty in business, about corruption in securing the license renewal and about unlawful importation of Chinese labour have not been made with any genuine intent of exposing breaches of the law but for the indirect purpose of wreaking revenge for a lost business transaction and applying pressure to secure an apology or other recompense. In accordance with the principles identified by Brereton J, if this inference should be drawn by the Court on final hearing it would constitute malice par excellence.
[4]
Likelihood of publication of further injurious falsehoods
The second email of 8 February 2021, to which I have referred at [9] above, contains an assertion of corruption in relation to the reinstatement of the plaintiff's China export licence. I have not reproduced that part of the email because it was not published to a third party. However, Mr Newton showed it to the company's solicitor, who then wrote to the defendant on 11 February 2021 in the following terms:
I have been provided with both your emails and copies of your telephone text messages which have been sent to [Mr Newton and the CEO]. Not only are they untruthful they are both threatening and defamatory.
My instructions are that there is absolutely no truth in the allegations made by you. Furthermore if those allegations are repeated to anyone else and especially involving press, radio or TV they will defame our client.
Accordingly if you publish any such information to any person or any such organisation then action will immediately be taken against you in relation to such matters. Our client will seek every remedy possible under the law including but not limited to damages for all losses suffered and in addition that you pay the cost of any action required.
The solicitor's email went on to request undertakings to cease and desist from these allegations, with a threat to seek an injunction if no undertaking should be forthcoming. As seen from the subsequent course of emails through to late July 2021 the defendant has responded with a deluge of allegations published to third parties. The negotiation that was underway when the email of 20 August 2021 was sent was directed towards achieving an end to these damaging statements without recourse to litigation. The defendant has demonstrated his intransigence in the 20 August email.
If there is any substance to the defendant's complaint about not being engaged by the plaintiff to provide labour recruitment services, it would have been open to him long ago to seek redress according to law in the courts of this State. Instead the defendant has published a stream of damaging statements in the media and directly to the authorities to which the plaintiff is answerable, in Australia and China. In doing so he has avoided the constraint of having to substantiate his allegations and the plaintiff has not been able to defend itself under the proper protection of legal procedure. It would be self-evident to the defendant that his publication of serious allegations in those circumstances would have the potential to cause the plaintiff and its people grave damage. If he did not otherwise realise that, it was brought home to him by the solicitor's email of 11 February 2021. The persistence of the defendant's conduct since then and the escalating extravagance of his allegations satisfy me that unless restrained he will continue.
[5]
Likelihood of damage to the plaintiff from further injurious falsehoods
Reference has already been made to the diminution in revenue sustained by the plaintiff during the period of suspension of its licence to import meat products into China. The defendant's allegations that the plaintiff secured reinstatement corruptly are calculated to place in jeopardy the plaintiff's relations with Chinese authorities. I consider there is a very substantial risk that the making of further statements by the defendant in the same vein may cause substantial damage to the plaintiff.
[6]
Balance of convenience
The grant of an interlocutory injunction to restrain publication of injurious falsehoods is not subject to the inhibition that applies when such an injunction is sought in relation to anticipated defamation: Palmer-Bruyn and Parker Pty Ltd v Parsons at [58] (Gummow J). Having made the above findings concerning likelihood of further publication and of consequent damage, the question is one of the balance of convenience.
Against the significant risk that, if not restrained, the defendant will continue to publish allegations about the plaintiff and that such allegations will cause damage, there is no factor of importance to be balanced in favour of allowing the defendant to take his course. I have referred to the very strong appearance that the past and likely future statements have been and will be directed to securing redress for loss of the recruitment business. The defendant is free to submit his claim in that regard to the courts, for determination according to law. He suffers no recognisable loss by being restrained from pressuring the plaintiff through the media and by purporting to raise issues of integrity with authorities.
I have no concern that the interlocutory injunction will have the effect of terminating bona fide reporting to authorities of unlawful or suspicious conduct. It is clear that the defendant's allegations have reached Departments of the Commonwealth government, as well as Drs Wang and Bi in China. The allegations have been repeated by the defendant, baldly, over several months without accompanying substantiation. If the authorities who have received the emails find that anything in them warrants investigation, they are already on notice. It cannot be said that the Court's interlocutory injunction is capable of causing a suppression.
In determining the balance of convenience in favour of granting an interlocutory injunction I have taken into account that an award of damages against the defendant, after final hearing in relation to the publication of any further injurious statements, may prove to be an inadequate remedy because the defendant is a bankrupt. A sequestration order was made against him in the Federal Circuit Court of Australia on 26 August 2021. The act of bankruptcy is recorded as having occurred on 26 November 2020. This consideration is not decisive and I would grant an injunction regardless of the bankruptcy.
[7]
Conclusion
For the above reasons I am satisfied that the defendant should be restrained from making any further such publication for one week, until the first return of the plaintiff's summons on 8 September 2021. On that date, in light of any additional evidence from the plaintiff that may be filed in the meantime and any affidavit that the defendant may provide, the duty judge will be able to determine whether the injunction should continue until final hearing of the plaintiff's claim or be discharged.
[8]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 03 September 2021