WILLIAMS -v- SMITH [2012] WASC 371 (12 October 2012)

4 On 22 August 2011 I granted the plaintiff leave to amend the writ of summons and the statement of claim in each action to substitute claims for relief for injurious falsehood in substitution for the claims in defamation. In CIV 1026 the plaintiff alleged that Melanie had maliciously made false statements about him to Dr Tan and to Libby. In CIV 1027 of 2011 Mr Williams alleged that Stephanie maliciously made a false statement about him to the plaintiff's mother (Elizabeth), to Libby, to Melanie and to a neighbour and friend of Mr Williams, who I will refer to as Pamela.

5 On 27 September 2011 Melanie and Stephanie each filed a defence in which they denied making the statements attributed to them or that they did so falsely or maliciously. The plaintiff and the defendants each gave discovery. On 31 May 2012 I gave the plaintiff leave to amend the writ and statement of claim in each action. On 1 June 2012 Mr Williams amended the writ and statement of claim in CIV 1026 of 2011 to allege that Melanie made a malicious false statement about him to Dr Tan in addition to the alleged malicious false statements previously pleaded. Mr Williams amended each statement of claim to allege further damage in addition to the damage previously pleaded.

6 The actions came on for a directions hearing on 27 June 2012. I then made orders extending the time for the plaintiff and each of the defendants to file and serve answers or objections to interrogatories previously delivered for their examination. Melanie informed the court that she would like to review the answers provided by Mr Williams to her interrogatories and seek legal advice on whether to apply for a strike out. The matters next came on for directions on 26 July 2012. On that occasion the defendants informed the court that they had received legal advice and on that legal advice they were applying to have the actions struck out and sought leave to make that application. I made directions for the defendants to file and serve a minute of proposed orders and an outline of submissions in support of the defendants' applications for summary dismissal of the action or to strike out the statement of claim and for the plaintiff to file a response to the defendants' application. The matter came on for further hearing on 14 August 2012. On that occasion the plaintiff sought an adjournment for the purpose of considering and responding to the defendants' applications. The defendants' applications were heard on 3 September 2012.

7 Order 16 r 1 of the Rules of the Supreme Court 1971 (WA) (RSC) gives a defendant the right within 21 days after appearance or at any later time by leave of the court to apply to the court for summary judgment and the court may enter judgment for the defendant if, amongst other things, it is satisfied that the action should be disposed of summarily. Order 16 r 1(2) requires an application under O 16 r 1(1) to be supported by an affidavit verifying the facts upon which the application is based. An affidavit in support which satisfies subrule (2) is a condition precedent to the exercise of jurisdiction under this order. The defendants have not filed any affidavit in support and hence the court's jurisdiction under O 16 has not been enlivened.

8 A defendant may apply for an order under O 20 r 19(1)(a) that the court strike out a statement of claim on the ground that it discloses no reasonable cause of action and order the action to be dismissed. Order 20 r 19(3) provides that subject to subrule (4) an application for an order under subrule (1) must be made within 21 days of the service of the pleading to which the application refers. Subrule (4) has been repealed. However, O 3 r 5(1) enables the court, on such terms as it thinks just, to extend the period within which a person is required or authorised by the rules to do any act in any proceedings.

9 The plaintiff and both defendants are selfrepresented and have been since the commencement of the action. The court will approach matters involving litigants in person with a degree of flexibility, bearing in mind that the rules are a means to an end, not an end in themselves. Case management principles should be applied flexibly when dealing with litigants in person who do not have the resources or expertise possessed by legal practitioners and their cases should be managed in a way which accommodates the reasonable requirements of the self represented litigant provided no injustice is visited on other parties: Tobin v Dodd [2004] WASCA 288 [70] (Le Miere J).

Leave to apply out of time to strike out statements of claim

10 Order 20 r 19(3) requires that an application to strike out a pleading must be made within 21 days of the service of the pleading. One purpose of the rule is to ensure that the application is brought promptly so that it may be disposed of at once and the action continued without further interruption. Another purpose is to discourage strike out applications of dubious merit and to require parties to consider pleadings promptly. An extension of time will be given in accordance with the principles of case flow management if it advances the expeditious and fair and just determination of the litigation. The principles enunciated in O 1 r 4A and r 4B require weight to be given to the elimination of delay, the reduction of cost and the efficient disposal of the business of the court, subject to the overriding requirement that there be a fair and just determination of the issues and contentions between the parties.

11 The various considerations identified by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 will bear upon applications for an extension of time. The exercise of the court's discretion to extend time will require an explanation to be given for the delay. In this case the delay has occurred because the defendants were selfrepresented and did not consider that the statement of claim was deficient in the respects now alleged until they obtained legal advice.

12 The plaintiff claims relief for injurious falsehood. That is not a cause of action frequently considered by Australian courts: see Palmer Bruyn & Parker v Parsons [2001] HCA 69; (2001) 208 CLR 388 [99] (Kirby J), although its frequency may have increased since the Uniform Defamation Acts removed a cause of action for defamation by a corporation, other than a not for profit corporation or a corporation employing fewer than 10 persons: Defamation Act 2005 (WA) s 9.

13 The defendants allege that the statement of claim does not disclose a reasonable cause of action for reasons of substance not form. If the defendants' submissions are correct they are fatal for the plaintiff's claims. On a quick perusal of the defendants' submissions I formed the opinion that the defendants' submissions had substance and it may turn out that a full consideration of the matter will disclose that the statement of claim discloses no reasonable cause of action and the plaintiff's claims cannot succeed. If the statement of claim does not disclose a reasonable cause of action then the time and resources of the parties and the court will be saved by disposing of the actions summarily rather than proceeding with further interlocutory steps and a trial. Accordingly, I will give leave to the defendants to apply to strike out the statements of claim.

14 In order to have the pleading of the cause of action in injurious falsehood struck out under O 20 r 19(1)(a) the defendants must demonstrate that the claim is so clearly untenable that it cannot possibly succeed, in accordance with the tests stated in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 130 (Barwick CJ).

15 Mr Williams alleges that Melanie made three false statements on or about 19 June 2007, 24 September 2007 and 27 February 2008. Each statement is alleged to have been published to Dr Tan and Libby at Dr Tan's medical practice. The first statement is that Mr Williams is sexually abusing Libby. The second is that Mr Williams is sexually and physically abusing Libby. The third is to the effect that Mr Williams has neglected or abused Libby. Mr Williams says that each statement was false and published maliciously. Mr Williams pleads that on 21 February 2008, Dr Tan told Mr Williams and his then partner, Ms Graham, that the defendant had made statements to Dr Tan to the effect that Mr Williams is sexually and physically abusing Libby. Mr Williams pleads that by reason of the publications to Dr Tan and Dr Tan telling Mr Williams and Ms Graham of the statements made by Melanie to Dr Tan damage was caused to Mr Williams' relationship with Libby.

16 Mr Williams alleges that on 1 January 2008 outside the front of the home of Elizabeth, Stephanie said to Mr Williams in the presence of Elizabeth, Libby, Melanie and Pamela words to the effect of '[y]ou have molested Libby's vagina and bottom, you are sexually abusing Libby' and thereby published those words to Elizabeth, Libby, Melanie and Pamela. Mr Williams pleads that by reason of the publications by Stephanie complained of, Libby started screaming and crying and stopped letting Mr Williams hug and touch her. Mr Williams says that damage was caused to his relationships with Libby, Elizabeth and Pamela.

17 Mr Williams pleads that by reason of the statements by Melanie and Dr Tan telling Mr Williams and Ms Graham of those statements and by reason of the statement by Stephanie:

1. Mr Williams was caused severe mental anguish giving rise to, or contributing to, a psychiatric condition diagnosed as post traumatic stress disorder which the plaintiff continues to experience; and
2. Mr Williams was incapacitated and unable to work and continues to be unable to work.

In his statement of claim Mr Williams pleaded that by reason of those matters he has suffered actual damage being:

1. the loss in value of companies in which he was a director;
2. the loss in value of his shareholding in those companies; and
3. the loss in value of his salary from Montague Holdings from 2008.

On the hearing of these applications Mr Williams withdrew and abandoned his claim for damages in respect of the loss in value of companies in which he was a director and the loss in value of his shareholding in those companies. Mr Williams stated that at the time of the alleged malicious falsehoods he was engaged by Montagu Holdings under a contract for services and that he suffered a loss of earnings because he was unable to work to provide those services to Montagu Holdings. In each action Mr Williams pleads that that damage was the result which the defendant intended by the publication of the matters complained of or alternatively was the natural and probable result of such publication.

18 The defendants say that the plaintiff's statements of claim do not satisfy the elements for an action for damages for injurious falsehood and accordingly the actions should be summarily dismissed or the statements of claim should be struck out.

19 The history of the tort of injurious falsehood, now generally referred to as the tort of malicious falsehood in England, is described by Hazel Carty in An Analysis of the Economic Torts (2nd ed, 2010) Oxford University Press, pages 200 203. The action was derived from an action on the case for special damage resulting from a falsehood. It protected against falsehoods denigrating the claimant's title to land. In the nineteenth century liability was extended to include impugning the claimant's title to goods slander of goods, and then to disparagement as to quality, involving no denial of title. By 1892, the general principle of the emergent tort was summarised thus by Bowen LJ in Ratcliffe v Evans [1892] 2 QB 524, 527 528:

That an action will lie for written or oral falsehoods, not actionable per se or even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce and where they do produce, actual damage, is established by law. Such an action is not one of libel or slander, but an action on the case for damage wilfully and intentionally done without just cause or excuse, analogous to an action for slander of title. To support it, actual damage must be shown, for it is an action which only lies in respect of such damage as has actually occurred.

Ms Carty says that case law reveals that on the whole this tort protects against a particular form of intentional interference with economic relations and is not limited to situations only involving slander of title or disparagement of goods. Ms Carty says that a plaintiff needs to prove a falsehood, published maliciously, which is calculated to produce and does produce pecuniary damage. Ms Carty says that though any falsehood is encompassed, it must be economic harm that is caused, which requirement has limited the tort usually to 'falsehoods about property, profession, trade or business'.

20 In Palmer Bruyn Gummow J listed the elements of the action:

Thus, generally, it is said that an action for injurious falsehood has four elements: (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 (404).

Kirby J stated his opinion of the elements of the tort (at 425):

(1) That the defendant published matter that was false;

(2) That the falsity concerned the plaintiff or its property;

(3) That such falsity was calculated to induce others not to deal with the plaintiff or was otherwise likely to damage the plaintiff;

(4) That the publication was actuated by malice;

(5) That the publication had the results complained of;

(6) That those results included actual damage to the plaintiff; and

(7) That such damage was either:

(a) The result which the person publishing the false matter intended; or

(b) The natural and probable result of such publication (425).

21 The defendants say that the plaintiff's statements of claim do not satisfy the elements of an action for injurious falsehood on three bases. First, the false statements do not fall within the scope of the tort because they do not concern the plaintiff's goods or business or affect the person of the plaintiff in his business, professional or commercial interests. Second, the defendants say that the actual damage must arise from actions of the third person or persons to whom the false statement was published or republished. Where, as here, the actual damage alleged arises from republication by the third party to the plaintiff that is not actual damage sufficient to establish the tort. Third, actual damage in the form of mental harm arising from the republication to the plaintiff is not actual harm sufficient to give rise to the tort.

22 One difference between the elements as stated separately by Gummow and Kirby JJ in Palmer Bruyn was whether the tort extends beyond statements of or concerning the plaintiff's goods or business. Gleeson CJ noted (at 393) that that matter did not fall for consideration in that case. The Chief Justice referred to his earlier decision in the New South Wales Court of Appeal in Ballina Shire Council v Ringland (1994) 33 NSWLR 680. In that case Gleeson CJ referred to commentators who acknowledged the existence of an action on the case of potentially wider scope than one which depends on disparagement of property or business. In neither Ballina nor Palmer Bruyn was it necessary for the court to determine the width of the tort.

23 In Fleming's The Law of Torts (10th ed) Professor Deakin says that today the tort 'is broad enough to encompass any damaging falsehood which interferes with prospective advantage, even of a noncommercial nature, as when a defendant falsely and maliciously wrote a letter to the plaintiff's fiancée, claiming that she was his own wife with the result that she thereby lost her marriage. The authority referred to is Sheperd v Wakeman [1714] EngR 626; (1662) 82 Eng Rep 982. Professor Morison in 'The New Law of Verbal Injury' (1959) Syd LR 4 (page 7, fn 36) says that Sheperd v Wakeman is not a case of malicious falsehood but an ordinary case of defamation involving an imputation that the plaintiff was endeavouring to negotiate a bigamous marriage. Professor Morison says that the reason why slander of title cases were discussed was that the defendant set up the excuse that he used the words complained of in bona fide assertion of a claim that the plaintiff was his own wife, and the courts' only experience of the defence of a bona fide claim of title was in slander of title actions.

24 In Noye v Robbins [2007] WASC 98 E M Heenan J discussed the width of the tort:

This uncertainty about this scope of the tort was noted by Gleeson CJ in Palmer Bruyn & Parker Pty Ltd v Parsons (supra) at 393, although the issue did not require resolution in that case. It was discussed more comprehensively by Gleeson CJ (then Chief Justice of the New South Wales Supreme Court) in Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 693, but, again, the issue did not require conclusive determination, although the potential overlap of the tort with defamation was fully recognised and accepted. The review of the authorities undertaken by Gleeson CJ in Ballina Shire Council v Ringland (supra) and by leading text writers, Trindade, F and Cane, P The Law of Torts in Australia 3rd ed (1999) at 183 184; Balkin R and Davis, A Law of Torts, 3rd ed (2004); Clerk and Lindsell on Torts, 18th ed (2000) at [23-08]; and McGregor on Damages, 17th ed (2003) at [40-014] [40-019], all independently support the wider thesis for the application of tort espoused by Fleming.

The application of the tort to malicious falsehoods which affect the plaintiff's person, in the sense that they reflect adversely upon his or her professional, occupational or commercial standing and interests, also seems to be implicit in the analysis of the tort undertaken by other justices in Palmer, Bruyn & Parker Pty Ltd v Parsons (supra) per Gummow J at 407 (although that point was expressly left open by his Honour), per Hayne J at 437, and per Callinan J at 447.

In these circumstances, I consider that I should approach this case on the basis that an action for damages for injurious falsehood will lie for false statements made maliciously against the plaintiff where the statements, because of their very nature, were likely to, and did, adversely affect the plaintiff in his reputation and standing as a police officer because, if they were true, they would reveal his unfitness to continue as a police officer and lead to his discharge or dismissal from the Police Force [279] - [281].

25 The width of the tort was again referred to by Beech J in Bonney v Ngunytju Tjitji Pirni Aboriginal Corporation [2009] WASC 209 on an application to strike out the statement of claim. The subject matter of the statements relied upon in the statement of claim concerned the plaintiff's performance at work. Beech J was not prepared to strike out the statement of claim on the basis that the subject matter of those statements is outside the scope of the tort of injurious falsehood. His Honour said that would be a matter for argument and resolution at a trial.

26 In Dye v Commonwealth Securities Ltd [2012] FCA 242 the applicant was an employee of Commonwealth Securities Ltd (CommSec). She alleged she had been sexually harassed by two senior bank officers. The causes of action relied upon by the applicant included injurious falsehood. That cause of action was based upon, amongst others, allegedly false statements said to have been made by CommSec to the effect that allegations made by the applicant against the senior bank officers were false. Buchanan J held that the tort of injurious falsehood did not extend to those statements:

In Ballina Shire Council v Ringland (1994) 33 NSWLR 680, Gleeson CJ mentioned (at 693) 'an interesting question as to how far the action for injurious falsehood extends beyond the concepts of business or property'. The issue was mentioned again in Palmer Bruyn but not resolved (see per Gleeson CJ at [1], per Gummow J at [60]). In the present case I would not be prepared to extend the existing categories of actionable loss to accommodate academic commentary which has suggested the limits of injurious falsehood have been set too narrowly and should be expanded in Australia.

Although there are cases where a person, whose profession or business depends upon their personal standing in the community or in the world of business or in their own profession, may claim damages for an injury to their trade or business arising from a maliciously false statement made about them, that is not the present case. Ms Dye was not pursuing a trade or business in the sense contemplated by those cases. She was an employee in a large organisation at a relatively junior level. No property or commercial or business interest of the kind necessary for this tort was pleaded, much less established. Ms Dye sold no product, had no custom to be lost, had no professional practice to be injured and had no business to be damaged. In my view, this cause of action was misconceived from the outset and, for that reason alone, could never succeed. In any event, it fails every other test on the facts [663] [664].

27 The torts of defamation and malicious falsehood have many similarities and in many instances overlap. The essential difference between them is that defamation actions are a means of protecting and vindicating the reputation of the party about whom a false statement was made, whereas injurious falsehood actions are designed to afford a remedy to one whose economic interest was harmed as a result of another's false statement. Fleming (10th ed) says that the law of defamation protects an interest in personal reputation, while injurious falsehood protects an interest in the disposability of one's property, products or business: [30.230]. In Palmer v Bruyn Gummow J said that the tort of injurious falsehood protects proprietary and commercial interests whereas the law of defamation protects personal interests (at [58]).

28 The defendants submit that the statements allegedly made by the defendants do not fall within the tort of injurious falsehood. The alleged statements were not of or concerning that the plaintiff's goods or business and did not affect the person of the plaintiff in his business, professional or commercial interests. In this case the statements allegedly made by Melanie and Stephanie had nothing to do with the plaintiff's property, business or occupation. The alleged statements were statements of the plaintiff's conduct towards Libby. They reflect adversely upon the plaintiff's character but not upon his professional, occupational or commercial standing and interests. It is arguable that the tort of injurious falsehood does not give rise to a cause of action for the statements allegedly made by the defendants.

29 I am not aware of any modern case in which an action for injurious falsehood has been held to lie where the false statement did not reflect adversely upon the plaintiff's professional, occupational or commercial standing and interests. Nevertheless, leading text writers have suggested that the tort may extend to any false statement that adversely reflects upon the plaintiff, his property or business and causes him actual damage. As a general rule a plaintiff is entitled as of right to have his case heard, to have the facts found and then to argue the question of law as it arises before the trial judge upon the facts as found. Furthermore a court should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that it will be found that a course of action will lie. I am not satisfied that the plaintiff's case concerning the scope of the tort is so clearly untenable that it should be summarily dismissed.

Damage not resulting from actions of persons to whom false statements published

30 The defendants submit that the tort does not extend to a false statement to a third party when the actual damage suffered by the plaintiff results from republication by the third party to the plaintiff himself. It is common ground that actual damage to the plaintiff is an element of the tort. The defendants submit that the actual damage must rise from actions of the third person to whom the false statement was made or from the actions of a fourth person to whom the false statement was republished. Palmer Bruyn allows for the possibility that the natural and probable result of the publication of a false statement about the plaintiff is that the third person to whom the statement was made by the defendant republishes to one or more other people and that the harm alleged to have been suffered by the plaintiff was, in an unbroken chain of causation, the continuation of that natural and probable result (at [118]). However, the defendants submit that insofar as the requirement is publication of the false statement to a third party and actual damage resulting from that publication, it has not been contemplated and is not within the scope of the tort that actual damage may arise from republication by the third party to the plaintiff as effectively is being claimed in these actions.

31 In Palmer Bruyn Gummow J cites Sir John Salmond who draws a distinction between injurious falsehood and deceit:

The wrong of deceit consists, as we have seen, in false statements made to the plaintiff himself whereby he is induced to act to his own loss. The wrong of injurious falsehood, on the other hand, consists in false statements made to other persons concerning the plaintiff whereby he suffers loss through the action of those others. The one consists in misrepresentations made to the plaintiff, the other misrepresentations made concerning him [59].

32 Professor Prosser in 'Injurious Falsehood: The Basis of Liability' (1959) 59 Colum L Rev 425 says that the plaintiff must plead and prove that the defendant communicated the statement to a third person, that the statement is false and:

... in addition, prove that the statement has played a material and substantial part in influencing the conduct of others, and that in consequence he has suffered special damage, which means pecuniary loss (427).

Injurious falsehood consists of a false statement communicated to A which causes pecuniary loss to B because of the action of A (432).

33 The learned author of MacGregor on Damages (18th ed) says at [40011]:

The tort of injurious falsehood, developing through slander of title and slander of goods, makes actionable any false statement made maliciously about the claimant to the third parties with the result that they act so as to cause damage to the claimant

34 In Palmer Bruyn Kirby J identified as one of the elements of the tort:

... that such falsity was calculated to induce others not to deal with the plaintiff or was otherwise likely to damage the plaintiff [114].

Kirby J did not say what the 'otherwise' refers to. There is nothing in his Honour's judgment which suggests anything other than something involving the recipients of the publication.

35 In Bride v KMG Hungerfords (1991) 109 FLR 256 Murray J said at 280:

It can be seen against this review how the plaintiffs' action is framed within the confines of an action for injurious falsehood, and that being the case it is clear that like the action for defamation, but unlike the action for deceit, the imputations are not to be made to or directed towards the plaintiff for his or her reliance in a detrimental way. These are statements made to third persons for their reliance to the detriment of the plaintiff.

36 In CIV 1026 of 2011 the plaintiff claims that the republication to him of the false statement by Dr Tan caused the plaintiff mental harm which in turn resulted in pecuniary damage. In CIV 1027 of 2011 the plaintiff says that the false statement was published to Elizabeth, Libby, Melanie and Pamela in the plaintiff's presence. Strictly speaking it is not the republication of the false statement that caused mental harm to the plaintiff. The plaintiff does not allege that he suffered any loss as a result of the actions of Dr Tan. It is the plaintiff's knowledge of the false statement having been made to Dr Tan which caused the harm. The plaintiff does not allege that he suffered any pecuniary loss as a result of the actions of Elizabeth, Libby, Melanie or Pamela. It is the plaintiff's knowledge of the false statement having been made to him in the presence of those persons which caused him harm.

37 I am not aware of any case where a plaintiff has recovered damages for injurious falsehood where the actual damage suffered by the plaintiff has resulted from the republication to the plaintiff of the false statement by the person to whom the false statement was made by the defendant or from the plaintiff being present when the false statement was made to others.

38 There is authority that it is or may be arguable that damage caused other than by the impact the publications had on the persons to whom they were made may be sufficient. In James v Faddoul [2007] NSWSC 821 the plaintiffs claimed damages for defamation, breach of confidence and injurious falsehood. The first and second plaintiffs were the shareholders in the third defendant, Blue Spark, which carried on the business of providing training and coaching in the disciplines of neurolinguistic programming, time line therapy, hypnosis and ancient huna. The plaintiffs' causes of action arose from four emails said to have been transmitted by the defendants to which were attached images of the first plaintiff that portrayed her in states of undress and sexually suggestive poses. The first and third emails included the words: 'Is this the face of NLP?' The reference to 'NLP' was claimed to be a reference to neurolinguistic programming which is a training tool used by the plaintiffs. The defendants contended that the entirety of the claim for injurious falsehood should be struck out as the claim was in substance one for hurt feelings with which the tort of injurious falsehood is not concerned. The plaintiff submitted that the claim was not for hurt feelings but a plea in special damage being financial loss to the plaintiffs flowing from the consequences of the defendants' actions. Price J was not persuaded that the plaintiffs were required to plead (and ultimately to prove) that damage was caused by the impact that the emails had on the persons to whom they were sent. His Honour said that what the plaintiff must prove is that the damage was either the result which the person publishing the false statements intended or the natural and probable result of the publication. His Honour was of the opinion that the claim was not for an award of 'parasitic' damages. The particulars of special damage included 'loss of profits from reduced enrolments in seminars and training'. His Honour said that although the financial loss might be said to have arisen from the distress of the first and second plaintiffs, it was a claim capable of being regarded as one for specific money loss and not for injured feelings [17]. His Honour held that in any event it was open to the plaintiff to argue that the plaintiff might recover damages for any injured feelings the falsehood causes:

In any event, the plaintiffs are entitled to have the opportunity at the hearing of their action to argue that damages may be awarded for injured feelings. Whilst in Bride v KMG Hungerfords (1991) 109 FLR 256 Murray J at 281 was of the opinion that no damages are available in respect of nonpecuniary harm or loss said to flow from an injurious falsehood, the issue was not determined in Palmer Bruyn. There is, as the parties have pointed out, authority to the contrary in the United Kingdom: see Joyce v Sengupta (1993) 1 WLR at 347 348 [18].

39 There is considerable force in the defendants' argument that the plaintiff cannot recover damages for injurious falsehood for mental harm resulting in pecuniary loss where the mental harm results from the republication to the plaintiff of a false statement by the person to whom the false statement was published by the defendant. However, I am not satisfied that the plaintiff's case is so clearly untenable that it should be summarily dismissed.

40 The tort of injurious falsehood protects against economic loss. There is no recovery for injury to reputation. That is protected by the tort of defamation. Lord Denning in Fielding v Variety Incorporated [1967] 2 QB 841 asserted that damages for injured feelings were also not available in a claim for malicious falsehood. In Palmer Bruyn Kirby J at [116] referred to the judgment of Lord Denning with apparent approval. Lord Denning's statement of principle was followed by Murray J in Bride v KMG Hungerfords at 280, where his Honour said that damages for mental distress were not available for injurious falsehood. His Honour drew a distinction between deceit and injurious falsehood, stating that in an action for deceit the court may award damages for nonpecuniary loss including for mental distress such as worry and anxiety. His Honour expressed the view that in the case of injurious falsehood noneconomic loss is simply too remote, the purpose of the cause of action being the protection of the plaintiff's economic interests.

41 Damages are not awarded in tort for mental distress standing alone but damages may be awarded for mental distress consequent upon the commission of some other wrong. Such damages are sometimes referred to as 'parasitic damages' because they are awarded only where they can be attached to some recognised wrong. Damages for mental distress consequent upon actual damage may be recoverable in actions for injurious falsehood. In Joyce v Sengupta [1992] EWCA Civ 9; [1993] 1 All ER 897; [1993] 1 WLR 337 Sir Donald Nicholls VC held that injury to feelings alone will not found a cause of action in malicious falsehood (348) but found it unnecessary and undesirable to decide whether damages may be awarded for injury to feelings when it is connected with financial damage inflicted by the falsehood. In Khodaparast v Shad [2000] 1 All ER 545; [2000] 1 WLR 618, 557 558 (Otton LJ) the plaintiff obtained damages not only for the consequent loss of her job as a teacher but also for the anxiety, distress and injury to feelings caused by the false statements. However, it is clear that injury to reputation is not covered by this tort.

42 In this case the plaintiff claims damages not only for injury to his feelings but for suffering a psychiatric condition diagnosed as posttraumatic stress disorder. There is a distinction between psychiatric illness and purely mental distress. Though damages are not awarded in tort for mental distress standing alone, in some tort actions a plaintiff may recover damages for some recognisable psychiatric injury or illness resulting from the infliction of traumatic shock rather than mere mental or emotional distress such as grief, sorrow, distress, worry, anxiety, disappointment, anger, outrage and the like. However, in an action for injurious falsehood the plaintiff must prove not only that he has suffered an injury for which compensation may be made. The plaintiff must prove that he has suffered actual pecuniary loss. McGregor on Damages (18th ed) describes the distinction:

The object of an award of damages is to give the claimant compensation for the damage, loss or injury he has suffered. The heads or elements of damage recognised as such by the law are divisible into two main groups: pecuniary and nonpecuniary loss. The former comprises all financial and material loss incurred, such as loss of business profits or expenses of medical treatment. The latter comprises all losses which do not represent an inroad upon a person's financial or material assets, such as physical pain or injury to feelings. The former, being a money loss, is capable of being arithmetically calculated in money, even though the calculation must sometimes be a rough one where there are difficulties of proof. The latter, however, is not so calculable. Money is not awarded as a replacement for other money, but as a substitute for that which is generally more important than money: it is the best that a court can do. (footnotes omitted)

43 The plaintiff pleads not only that he has suffered post traumatic stress disorder but that he has suffered loss of earnings as a result of that condition. Loss of earnings is actual damage. The basis of the decision in James v Faddoul appears to have been that the distress caused to the plaintiff by the defendants' malicious false statement caused the plaintiff to be less active in the business and the business declined. Price J held that the claim for injurious falsehood should not be struck out on the ground that the plaintiffs had failed to plead actual damage.

44 I conclude that the defendants have not demonstrated that the entirety of the claim for injurious falsehood should be struck out. The claim that loss of earnings as a consequence of post traumatic stress disorder is actual damage is not so clearly untenable that the claim should be summarily dismissed.

45 The plaintiff must establish a causal relationship between the making of the false statement and the damage of which the plaintiff complains. In Palmer Bruyn Gleeson CJ said (at [14]) that the falsehood must cause harm of a kind which is intended, or, of a kind which is the natural and probable consequence of the making of the false statements and added:

It is not the case that the respondent, having set out to make trouble of some kind for the appellant, and (let it be assumed), having made false statements for that purpose, is now liable for all harm to the appellant that followed in the events that ensued.

Gummow J held that an action in injurious falsehood requires either that the defendant intended to cause the harm or that the harm be the natural and probable result of the publication of the false statement (at [73]). His Honour explained that where the damage that was caused was different in kind or extent from that which was found to be intended by the defendant, the defendant will only be liable for the consequences which actually resulted if the damage was the direct and natural result of the publication of the falsehood.

46 In each action the plaintiff claims to have suffered the same actual damage. The plaintiff claims to have suffered actual damage in the form of loss in value of his salary from Montagu Holdings. In the course of the hearing the plaintiff explained that he was engaged by Montagu Holdings under a contract for services, that he was unable to provide any services because of his post traumatic stress disorder and as a result he suffered a loss of earnings from Montagu Holdings.

47 The plaintiff pleads that the damage pleaded was the result which the defendants intended by their false statements. If these allegations are made out then that would satisfy the requirement that the plaintiff prove that the false statement caused him pecuniary damage.

48 On an application to strike out a statement of claim under RSC O 20 r 19(1)(a), no evidence is admissible and since it is only the pleading itself which is being examined, the court is required to assume that each and every one of the facts pleaded is true and will be capable of proof at the trial, unless they are manifestly incapable of proof. The court's function on this application is simply to decide whether, on the assumed facts, the plaintiff would be bound to fail in establishing that the allegedly false statements caused him actual damage. The plaintiff's claim is not so clearly untenable that it should be summarily dismissed.

49 I have found that the plaintiff's actions should not be summarily dismissed. However, there are a number of aspects of the statements of claim that require separate consideration.

50 A statement of claim must contain material facts, being the facts necessary for the purpose of formulating a complete cause of action, and it is not sufficient simply to plead a conclusion drawn from unstated facts: McKellar v Container Terminal Management Services Ltd [1999] FCA 1101; (1999) 165 ALR 409 [23] (Weinberg J). The statement of claim must allege that the actual damage suffered by the plaintiff and that it was suffered by reason of the defendants' false statements. Material facts must be pleaded which show the required causal link between the false statements and the damage to the plaintiff. Not all conclusionary pleadings will be struck out. Whether a pleading ought to be struck out will depend upon whether the facts have been pleaded at too great a level or generality or at too high a level of abstraction: HECEC Australia Pty Ltd v HydroElectric Corp [1999] FCA 822; Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees' Association (WA) (1987) 13 FCR 413.

51 In the course of the hearing of this application the plaintiff stated that he intended to plead that Melanie and Stephanie each intended when making the false statements to affect his relationships with his daughter, mother and mother's neighbour, to damage his position in the Family Court proceedings and to cause him loss of earnings from Montagu Holdings.

52 The conclusionary pleadings that the pleaded damage was the result which the defendants intended by the publications complained of or was the natural and probable result of those publications must be considered in light of the facts pleaded in the statement of claim. In CIV 1026 the plaintiff pleads that Melanie made the false statements complained of maliciously. In particulars of malice the plaintiff says that he and Melanie were engaged in Family Court proceedings in which custody of Libby was in issue. The plaintiff pleads that Melanie published the matters complained of knowing that Libby would hear them and did so in an attempt to damage the plaintiff's relationship with Libby and thereby his position in the Family Court proceedings. The plaintiff further says that Melanie published the matters complained of to Dr Tan in an attempt to damage the plaintiff's position in the Family Court proceedings. In CIV 1027 of 2011 the plaintiff pleads, as particulars of malice, that in making the alleged false statement Stephanie was actuated by the dominant motive of damaging the plaintiff and his relationship with his daughter, his mother and his mother's neighbour. The plaintiff pleads that Stephanie published the false statement in an attempt to damage the plaintiff's relationship with Libby and thereby his position in the Family Court proceedings.

53 The conclusionary pleading that Melanie and Stephanie intended the plaintiff to lose salary from Montagu Holdings is arguably inconsistent with the plea that Melanie published the matters complained of in an attempt to damage the plaintiff's relationship with Libby and his position in the Family Court proceedings and the plea that Stephanie published the matters complained of with the dominant motive of damaging the plaintiff's relationship with his daughter, his mother and his mother's neighbour and in an attempt to damage the plaintiff's relationship with Libby and thereby his position in the Family Court proceedings.

54 RSC O 20 r 13(1)(b) provides, in effect, that where a plaintiff alleges any condition of the mind of any person, except knowledge, particulars of the facts on which the party relies must be pleaded. The allegation that each of the defendants intended to cause the plaintiff to suffer loss of earnings is an allegation of a condition of the mind. The plaintiff must include in his statement of claim particulars of the facts on which he relies to establish that intention. The plaintiff must also plead any facts which he relies upon to establish that his loss of earnings was the natural and probable result of the false statements made by the defendants to Dr Tan.

55 The statement of claim does not contain material facts which enable it to be concluded that the defendants intended that the plaintiff should lose earnings from Montagu Holdings or that that is a natural and probable result of the false statements made by the defendants to the persons to whom they were made. None of the persons to whom the statements were made are pleaded to have had any connection with the plaintiff's employment or Montagu Holdings or its business. The false statements concerned the plaintiff's conduct towards Libby and had nothing to do with his employment or Montagu Holdings. The false statements were not spoken of the plaintiff in the way of his employment or occupation or of him as an employee of, or contractor to, Montagu Holdings. The persons to whom the false statements were made were not customers of, or related to, or had any capacity to influence Montagu Holdings. The plaintiff must plead all of the facts and matters that he will rely upon to establish that the defendants intended that he should lose earnings from Montagu Holdings or that that is a natural and probably result of the false statements made by them. That includes any facts or circumstances from which the plaintiff says the requisite intent or effect is to be inferred.

56 It is not pleaded that either of the defendants knew that the plaintiff was engaged by Montagu Holdings. It is not even pleaded that at the time the allegedly false statements were made the plaintiff was employed by, or contracted to, Montagu Holdings. It is not pleaded when the plaintiff ceased providing services to Montagu Holdings.

57 Paragraph 14 of the statement of claim in CIV 1026 of 2011 and [10] in the statement of claim in CIV 1027 of 2011 must be struck out on the ground that they fail to state the material facts giving rise to the plaintiff's claim.

58 Subparagraphs 14.1 and 14.2 of the statement of claim in CIV 1026 of 2011 and 10.1 and 10.2 of the statement of claim in CIV 1027 of 2011 should be struck out on the grounds that the plaintiff no longer pursues those claims.

59 The plaintiff should be given leave to amend his statement of claim. He should, if he can, plead the material facts which he relies on to establish, or from which it is to be inferred, that each of the defendants intended to cause him loss of earnings from Montagu Holdings or that that was the natural and probable result of their allegedly false statements.

60 In the course of the hearing the plaintiff asserted, in effect, that the defendants were responsible for the republication of the allegedly false statements by Dr Tan to the plaintiff and his partner because Dr Tan was under a duty to make that republication. If the plaintiff wishes to assert those matters at trial then they must be pleaded in the statement of claim.

61 In the course of the hearing the plaintiff referred to other matters which are not pleaded in the statement of claim. For example, the plaintiff made reference to the Department of Community Protection. The plaintiff will not be entitled at trial to refer to any such matters that are not set out in the statement of claim.

62 It is not appropriate to give the plaintiff leave to amend his statements of claim in any way he sees fit. I will direct that if the plaintiff wishes to amend his statement of claim he should file and serve a minute of proposed amended statement of claim.